##### Table of Contents


















10-K




x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934






o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934









(Exact name of registrant as specified in its charter)


|                                                                                                     |  |                                     
|---------------------------------------------------------------------------------------------------- |  | ------------------------------------
|Maryland                                                                                             |  | 36-4151656                          
|(State or other jurisdiction of incorporation or
    organization)                                   |  | (I.R.S. Employer Identification No.)
|Two North Riverside Plaza,
    Suite 2100, Chicago, Illinois(Address of principal executive offices) |  | 60606(Zip Code)                     

Registrants telephone number, including area
code (312) 466-3300




|                                                                       |  |                                          
|---------------------------------------------------------------------- |  | -----------------------------------------
|Title of each class                                                    |  | Name of each exchange on which registered
|                                                                       |  |                                          
|Common Shares of Beneficial Interest,
    $.01 par value per share     |  | New York Stock Exchange                  
|5.25% Series B Convertible,
    Cumulative Redeemable Preferred Shares |  | New York Stock Exchange                  
|7.75% Series G Cumulative Redeemable
    Preferred Shares              |  | New York Stock Exchange                  





x o


o x


x o


S-K 10-K 10-K. o


12b-2




|                           |                      |                        
|-------------------------- | -------------------- | -----------------------
|Large accelerated filer  x | Accelerated filer  o | Non-accelerated filer o

12b-2 o x






DOCUMENTS INCORPORATED BY REFERENCE












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##### 










EQUITY OFFICE PROPERTIES TRUST


TABLE OF CONTENTS


|                                                                        |  |                                                                                                                       |  |      |     | 
|----------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                        |  |                                                                                                                       |  | Page |    
|                                                                        |  |                                                                                                                       |  |      |    
|PART I.                                                                
|Item 1.                                                                 |  | Business                                                                                                              |  |      | 3   | 
|Item 1A.                                                                |  | Risk Factors                                                                                                          |  |      | 10  | 
|Item 1B.                                                                |  | Unresolved Staff Comments                                                                                             |  |      | 24  | 
|Item 2.                                                                 |  | Properties                                                                                                            |  |      | 25  | 
|Item 3.                                                                 |  | Legal Proceedings                                                                                                     |  |      | 30  | 
|Item 4.                                                                 |  | Submission of Matters to a Vote of Security
    Holders                                                               |  |      | 30  | 
|PART II.                                                               
|Item 5.                                                                 |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of  Equity
    Securities |  |      | 31  | 
|Item 6.                                                                 |  | Selected Financial Data                                                                                               |  |      | 32  | 
|Item 7.                                                                 |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                             |  |      | 34  | 
|Item 7A.                                                                |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                        |  |      | 67  | 
|Item 8.                                                                 |  | Financial Statements and Supplementary
    Data                                                                       |  |      | 68  | 
|Item 9.                                                                 |  | Changes in and Disagreements With
    Accountants on Accounting and Financial Disclosure                              |  |      | 131 | 
|Item 9A.                                                                |  | Controls and Procedures                                                                                               |  |      | 131 | 
|Item 9B.                                                                |  | Other Information                                                                                                     |  |      | 131 | 
|PART III.                                                              
|Item 10.                                                                |  | Directors and Executive Officers of the
    Registrant                                                                |  |      | 132 | 
|Item 11.                                                                |  | Executive Compensation                                                                                                |  |      | 132 | 
|Item 12.                                                                |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder  Matters                   |  |      | 132 | 
|Item 13.                                                                |  | Certain Relationships and Related
    Transactions                                                                    |  |      | 132 | 
|Item 14.                                                                |  | Principal Accounting Fees and Services                                                                                |  |      | 132 | 
|PART IV.                                                               
|Item 15.                                                                |  | Exhibits and Financial Statement
    Schedules                                                                        |  |      | 133 | 
|Form of Non-Qualified Share Option Agreement for Employees             
|Form of Particpant Summary and Restricted Share Agreement for Employees
|Statement of Earnings to Fixed Charges                                 
|Consent of Independent Registered Public Accounting Firm               
|Certifications of CEO Pursuant to Rule 13a-14(a)/15d-14(a)             
|Certifications of CFO Pursuant to Rule 13a-14(a)/15d-14(a)             
|Certifications of CEO and CFO Pursuant to Section 906                  
|1997 Non-Qualified Employee Share Purchase Plan Financial Statements   



2



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##### Table of Contents






PART I







|        |          
|------- | ---------
|Item 1. | Business.

EQUITY OFFICE


10-K












































Office Properties




3



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##### Table of Contents



10-K


|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |            |            |  |  |            |             | 
|----------------------------- | ----- | --------- | --- | ---------------------- | ----------- |  | -------------------------- | ----------- |  | -------- | ----------- | ----------- |  | ----------- | ---------- | ---------- |  |  | ---------- | ----------- | 
|                              |       |           |     | Total Office Portfolio |             |  | Effective Office Portfolio |            
|                              |       |           |     |                        |             |  |                            |            
|                              |       | Number of |     |                        | Occupied    |  |                            |             |  | Occupied |             |             | 
|                              |       | Buildings |     |                        | Square Feet |  |                            | Square Feet |  |          | Square Feet |             |  | Square Feet |           
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Wholly-Owned Properties       |       |           | 562 |                        |             |  | 77,309,801                 |             |  |          | 85,927,640  |             |  |             | 77,309,801 |            |  |  | 85,927,640 |            
|Consolidated Joint Ventures   |       |           | 22  |                        |             |  | 10,585,857                 |             |  |          | 11,143,588  |             |  |             | 9,529,373  |            |  |  | 9,983,557  |            
|Unconsolidated Joint Ventures |       |           | 38  |                        |             |  | 12,990,416                 |             |  |          | 14,437,825  |             |  |             | 5,146,371  |            |  |  | 5,797,094  |            
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|                              | Total |           |     | 622                    |             |  |                            | 100,886,074 |  |          |             | 111,509,053 |  |             |            | 91,985,545 |  |  |            | 101,708,291 | 
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Percent Occupied              |       |           |     |                        |             |  | 90.5                       | %           |  |          |             |             |  |             | 90.4       | %          |  |  |            |            
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Percent Leased                |       |           |     |                        |             |  | 91.8                       | %           |  |          |             |             |  |             | 91.9       | %          |  |  |            |            
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           

BUSINESS STRATEGY








| |   |                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | concentrating capital in our core markets where we believe we
    can best position ourselves to maximize value and generate
    long-term attractive returns;
|
| |  | increasing occupancy by leasing vacant space and retaining
    tenants on economically attractive terms; and                                                  
|
| |  | achieving economies of scale over time.                                                                                                                       

ACQUISITION, DISPOSITION AND DEVELOPMENT ACTIVITY




|     |       |                            |         |          |              |   |         |         | 
|---- | ----- | -------------------------- | ------- | -------- | ------------ | - | ------- | ------- | 
|     |       | Effective Office Portfolio |        
|     |       |                            |        
|Year |       | Acquisitions               |         |          | Dispositions |  
|     |       |                            |         |          |              |  
|     |       | (Dollars in millions)      |        
|2005 |       | $                          | 1,442.2 |          |              | $ | 2,736.5 |        
|2004 |       |                            | 952.0   |          |              |   | 684.2   |        
|2003 |       |                            | 227.8   |          |              |   | 1,529.6 |        
|2002 |       |                            | 171.1   |          |              |   | 508.3   |        
|2001 |       |                            | 7,237.7 |          |              |   | 541.2   |        
|     |       |                            |         |          |              |  
|     | Total |                            | $       | 10,030.8 |              |   | $       | 5,999.8 | 
|     |       |                            |         |          |              |  



4



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Acquisitions








| |   |                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an attractive going-in yield, as well as the potential to
    increase operating income over time by increasing revenues and
    occupancy;                                                     
|
| |  | the propertys location in one of our core markets;                                                                                                                                             
|
| |  | the attractiveness of the property to existing and potential
    tenants;                                                                                                                       
|
| |  | the likelihood and relative attractiveness of competitive supply;                                                                                                                               
|
| |  | the anticipated demand for space in the local market;                                                                                                                                           
|
| |  | the creditworthiness and diversity of risk of the tenants
    occupying the property;                                                                                                           
|
| |  | the physical condition of the property, including the amount of
    funds required for maintenance and physical upgrades needed in
    order to establish or sustain market competitiveness; and
|
| |  | the cost structure of the property.                                                                                                                                                             

Dispositions








| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | our estimate of the future returns on the asset being sold;                                                                                   
|
| |  | whether the property is strategically located within a market or
    whether the market is one of our core markets;                           
|
| |  | our ability to sell the property at an attractive price;                                                                                      
|
| |  | our ability to recycle capital into core markets and other
    activities consistent with our business strategy;                              
|
| |  | the tax consequences of the disposition and whether it can be
    structured as a tax-deferred exchange;                                      
|
| |  | tenant composition and lease rollover for the property;                                                                                       
|
| |  | general economic conditions and outlook, including job growth in
    the local market; and                                                    
|
| |  | the general quality of the asset, including its physical
    condition and the amount of capital required to maintain its
    competitiveness.

Developments




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| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | our assessment of the returns from such development;                                                        
|
| |  | the extent of lease-up
    risk in the context of the demand/supply characteristics of the
    local market;
|
| |  | the ability to minimize construction risks; and                                                             
|
| |  | the quality of local development partners, if applicable.                                                   

FINANCING POLICIES






DIVIDEND POLICY




SEGMENTS




COMPETITION




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ENVIRONMENTAL EXPOSURE




FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS




EMPLOYEES AND EXECUTIVE OFFICERS




Executive Officers of the Registrant






|                      |  |     |    |  |              |                                                                        
|--------------------- |  | --- | -- |  | ------------ | -----------------------------------------------------------------------
|Name                  |  | Age |    |  | Offices Held
|                      |  |     |    |  |             
|Richard D. Kincaid    |  |     | 44 |  |              | President and Chief Executive Officer                                  
|Debra L. Ferruzzi     |  |     | 45 |  |              | Executive Vice President  Corporate Strategy                          
|Jeffrey L. Johnson    |  |     | 46 |  |              | Executive Vice President and Chief Investment Officer                  
|Lawrence J. Krema     |  |     | 45 |  |              | Executive Vice President  Human Resources and
    Communications      
|Peyton H. Owen, Jr.   |  |     | 48 |  |              | Executive Vice President and Chief Operating Officer                   
|Stanley M. Stevens    |  |     | 57 |  |              | Executive Vice President, Chief Legal Counsel and Secretary            
|Marsha C. Williams    |  |     | 54 |  |              | Executive Vice President and Chief Financial Officer                   
|Robert J. Winter, Jr. |  |     | 60 |  |              | Executive Vice President  Development and Joint
    Venture Management

7



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##### Table of Contents





Richard D. Kincaid




| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Executive Vice President from March 1997 until November 2002;                                                                                                        
|
| |  | Chief Operating Officer from September 2001 until November 2002;                                                                                                     
|
| |  | Chief Financial Officer from March 1997 until August 2002;                                                                                                           
|
| |  | Senior Vice President from October 1996 until March 1997;                                                                                                            
|
| |  | Senior Vice President and Chief Financial Officer of Equity
    Office Holdings, L.L.C., a predecessor of ours, from July 1995
    until October 1997;               
|
| |  | Senior Vice President of Equity Group Investments, Inc., an
    owner and financier of real estate and corporate investments,
    from February 1995 until July 1995;
|
| |  | Senior Vice President of The Yarmouth Group, a real estate
    investment company in New York, New York, from August 1994
    until February 1995; and               
|
| |  | Senior Vice President  Finance of Equity Group
    Investments, Inc. from December 1993 until July 1994.                                                            

Debra L. Ferruzzi




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Senior Vice President  Corporate Strategy from June
    2003 until September 2005;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Senior Vice President and Executive Advisor from June 1998 until
    May 2003; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Senior Vice President, Capital Markets Group, of Equity Group
    Investments, Inc., a private investment company, until May 1998
    (in this capacity, Ms. Ferruzzi was responsible for
    securing financing for Equity Group Investments private
    real estate holdings, including office, retail and residential
    assets, and was responsible for securing lines of credit for
    Manufactured Home Communities, Inc. and Equity Residential
    Properties Trust, real estate investment trusts), as well as
    other positions beginning in June 1982.

Jeffrey L. Johnson




| |   |                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Managing Partner and owner of Lakeshore Holdings, LLC, a private
    equity firm focusing on real estate investment founded by
    Mr. Johnson in conjunction with Lehman Brothers Holdings
    Inc., a global financial services firm, from December 2002 until
    May 2003 (in this capacity, Mr. Johnson was responsible for
    all aspects of the business);

8



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Managing Director of Lehman Brothers Holdings Inc. from March
    2000 until November 2002 (in this capacity, Mr. Johnson was
    a founding partner and co-head of domestic investments for
    Lehman Brothers first real estate private equity group and
    was instrumental in helping raise the companys
    $1.6 billion fund and developing the investment strategy
    for the fund, built the investment team and implemented its
    investment process);
|
| |  | Chief Investment Officer of Equity Office from March 1998 until
    June 1999; and                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Senior Vice President  Investments of Equity Office
    from March 1997 until June 1999.                                                                                                                                                                                                                                                                                                                                                                             

Lawrence J. Krema




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Senior Vice President  Human Resources from March
    2001 until November 2002; and                                                                                                                                                                                                                                                                                                                             
|
| |  | Vice President of NEC Technologies, Inc., a supplier of
    presentation systems, computing and related technologies for the
    North American market, from April 1995 until October 2000 (in
    this capacity, Mr. Krema managed the human resources
    division of the company in North America and was responsible for
    corporate services, which included real estate, travel and
    office services).

Peyton H. Owen, Jr.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Chief Operating Officer  Americas Region of Jones
    Lang LaSalle, a global provider of integrated real estate and
    investment management services, from April 1999 until October
    2003 (in this capacity, Mr. Owen oversaw 5,500 people in
    100 markets in the United States, Canada and Mexico; Investor
    Services, which included leasing and property management;
    Corporate Solutions, which included tenant representation,
    facility management and project management; and Capital Markets;
    and implemented standardized processes, new technologies and
    compliance measurements, and consolidated the organizational
    structure); and
|
| |  | Executive Vice President and Chief Operating Officer 
    Leasing and Management of LaSalle Partners, predecessor of Jones
    Lang LaSalle, from January 1996 until April 1999 (in this
    capacity, Mr. Owen oversaw the leasing and management
    activities for a
    200-million-square-foot
    investment property portfolio, restructured leasing and
    management across 20 markets and led due diligence and
    integration in various corporate acquisitions).                                                                                                                                                                                              

Stanley M. Stevens


Marsha C. Williams




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Chief Administrative Officer of Crate and Barrel, a national
    Chicago-based retailer of home furnishings and accessories
    (Crate and Barrel is the trade name of Euromarket Designs Inc.,
    which is an indirect majority-owned subsidiary of Otto, formerly
    Otto Versand GmbH & Co., a German mail-order company),
    from May 1998 until August 2002 (in this capacity,
    Ms. Williams participated in the planning and execution of
    Crate and Barrels growth strategy and managed its finance,
    accounting, information technology, warehousing, distribution
    and logistics, loss prevention, strategic planning, direct
    marketing operations and purchasing departments); and
|
| |  | Vice President of Amoco Corporation, a worldwide energy and
    chemical company, from December 1997 until April 1998 and
    Treasurer of Amoco Corporation from October 1993 until April
    1998, as well as other capacities and positions from November
    1989 until October 1993.                                                                                                                                                                                                                                                                                                                                                                                                                       

9



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Robert J. Winter, Jr.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Executive Vice President  Development and Portfolio
    Management from November 2002 until February 2005;                                                                                                                                                                                                                                                                                                          
|
| |  | Senior Vice President  Development from June 2002
    until November 2002;                                                                                                                                                                                                                                                                                                                                          
|
| |  | Senior Vice President  Development Investments from
    July 2001 until June 2002;                                                                                                                                                                                                                                                                                                                                  
|
| |  | President and Chief Executive Officer of Amli Commercial
    Properties Trust, a private real estate investment trust with
    office and industrial properties in the suburban Chicago market,
    from August 1998 until July 2001 (in this capacity,
    Mr. Winter was responsible for all aspects of the
    companys business, including the development, management
    and ownership of its properties); and
|
| |  | President and Chief Executive Officer of Amli Commercial
    Properties, LLC, a limited liability company and predecessor of
    Amli Commercial Properties Trust, from November 1996 until July
    1998 (in this capacity, along with developing the business,
    Mr. Winter was responsible for forming Amli Commercial
    Properties Trust).                                                                   






|         |              
|-------- | -------------
|Item 1A. | Risk Factors.

Forward-Looking Statements


10-K




Risk Factors






| |                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Improvements in our market conditions have not yet offset the
    impact of prior declines in rent and in overall activity in our
    markets as well as increases in our expenses and other adverse
    factors





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| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our long term leases cause our operating results to lag
    improving market conditions; our geographic diversity may cause
    our operating results to be less favorable than operating
    results in the strongest markets





| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | In order to continue to pay distributions to our common
    shareholders at anticipated levels, we must borrow funds or sell
    assets





| |                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We were a net seller of real estate in 2005, which will
    further reduce our income from continuing operations and funds
    from operations. Future disposition activity may also result in
    gains or losses on sales of real estate and impairment
    charges



11



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| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Our performance and share value are subject to risks
    associated with the real estate industry





| |   |                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Downturns in national, regional and local economic conditions
    and the level of white-collar employment in markets where our
    properties are located;                                                                                                                                                                                                      
|
| |  | Unfavorable capital market conditions which could affect our
    ability to complete any property dispositions or acquisitions on
    a timely basis or on economically attractive terms;                                                                                                                                                                        
|
| |  | Local conditions such as an oversupply of office properties,
    including space available by sublease, or a reduction in demand
    for high-rise and other office properties;                                                                                                                                                                                  
|
| |  | The relative attractiveness of our properties to tenants;                                                                                                                                                                                                                                                                                                        
|
| |  | The extent of competition from other available office properties;                                                                                                                                                                                                                                                                                                
|
| |  | Changes in market rental rates, particularly as our buildings
    age, and our ability to fund repair and maintenance costs;                                                                                                                                                                                                                                     
|
| |  | Our ability to fund the increased cost of tenant improvements
    and other costs required to lease or re-lease space;                                                                                                                                                                                                                                           
|
| |  | Our ability to collect rent and expense reimbursements from
    tenants;                                                                                                                                                                                                                                                                                         
|
| |  | Our ability to complete and lease current and future
    developments on schedule and in accordance with budget; and                                                                                                                                                                                                                                             
|
| |  | The cost and availability of adequate insurance (including
    coverage for catastrophic events such as earthquakes, hurricanes
    and terrorist acts).                                                                                                                                                                                                         
|
| |  | Increases in utility, security and other operating costs,
    including real estate taxes, that may increase over time as
    markets stabilize or otherwise be subject to macroeconomic
    factors, and that are not necessarily reduced when circumstances
    such as local market factors and competition cause a reduction
    in income from the property.



| |                                                    
| | ---------------------------------------------------
| | Our properties face significant leasing competition





| |                                                                               
| | ------------------------------------------------------------------------------
| | We face potential adverse effects from tenant bankruptcies or
    insolvencies



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| |                                                 
| | ------------------------------------------------
| | New acquisitions may fail to perform as expected





| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Contingent or unknown liabilities acquired in acquisitions,
    mergers or similar transactions could require us to make
    substantial payments





| |   |                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | liabilities for
    clean-up or remediation
    of environmental conditions;                                                                                               
|
| |  | claims of tenants, vendors or other persons dealing with the
    former owners of the properties;                                                                          
|
| |  | liabilities incurred in the ordinary course of business; and                                                                                                               
|
| |  | claims for indemnification by general partners, directors,
    officers and others indemnified by us in the context of a merger
    or the former owners of the properties.



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Competition for acquisitions or disposition of properties
    could adversely affect us





| |                                                                               
| | ------------------------------------------------------------------------------
| | Our investment in property development may be more costly
    than anticipated





| |   |                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may incur construction costs for a development project which
    exceed our original estimates due to increased material, labor
    or other costs; this, in turn, could make completion of the
    project uneconomical because we may not be able to increase
    rents to compensate for the increase in construction costs;
|
| |  | we may be unable to obtain, or face delays in obtaining,
    required zoning, land-use, building, occupancy, and other
    governmental permits and authorizations, which could result in
    increased costs and could require us to abandon our activities
    entirely with respect to a project;                              
|
| |  | we may abandon development opportunities after we begin to
    explore them and as a result we may fail to recover expenses
    already incurred;                                                                                                                                                                                 
|
| |  | we may expend funds on and devote management time to projects
    which we do not complete;                                                                                                                                                                                                                                       
|
| |  | we may be unable to complete construction and leasing of a
    property on schedule, resulting in increased debt service
    expense and construction or renovation costs;                                                                                                                                                        

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| |   |                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may lease developed properties at below expected rental
    rates; and                                                                                                                                           
|
| |  | occupancy rates and rents at newly completed properties may
    fluctuate depending on a number of factors, including market and
    economic conditions, and may result in our investment not being
    profitable.



| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Because real estate investments are illiquid, we may not be
    able to sell properties when appropriate





| |                                                       
| | ------------------------------------------------------
| | Various factors limit our ability to dispose of assets





| |                                                   
| | --------------------------------------------------
| | Certain perils could adversely affect our business



14



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| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | Some potential losses, including losses arising from
    earthquakes and terrorist acts, may not be covered by
    insurance



|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                          
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Type of Insurance Coverage                   |  | Equity Office Loss Exposure/Deductible                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | Third-Party Coverage Limitation          
|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                          
|Property damage and business interruption(a) |  | $50 million per occurrence and $75 million annual
    aggregate exposure (which includes amounts paid for earthquake
    loss), plus $1 million per occurrence deductible                                                                                                                                                                                                                                                                                                                                        |  | $1.0 billion per occurrence(c)           
|Earthquake(a)(b)                             |  | $75 million per occurrence and annual aggregate exposure
    (which includes amounts paid for property damage and business
    interruption loss), plus $1 million per occurrence
    deductible                                                                                                                                                                                                                                                                                                                 |  | $325 million in the aggregate per year(c)
|Acts of terrorism(d)                         |  | $4.9 million per occurrence deductible (plus 10% of the
    remainder of each and every loss with a maximum per occurrence
    exposure of $37.4 million which includes the
    $4.9 million deductible); however, TRIEA provides that if
    the aggregate industry loss as a result of any such foreign
    terrorism occurrence is less than $50 million
    ($100 million in 2007), we are responsible for 100% of such
    loss. Our intent is to insure such amounts in excess of
    $50 million in 2007. |  | $825 million per occurrence(e)           






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We retain up to $75 million annual aggregate loss
    throughout the portfolio. In the event of a loss in excess of
    the per occurrence or annual aggregate amount, the third-party
    insurance carriers would be obligated to cover the losses up to
    the stated coverage amounts in the table above.                                                                                                                                                                                                                    
|   
|(b) |  | The amount of the third party insurance relating to earthquakes
    is based on maximum probable loss studies performed by
    independent third parties. The maximum annual aggregate payment
    amount for earthquake loss is $325 million, inclusive of
    our loss exposure of $75 million plus $1 million per
    occurrence deductible. There can be no assurance that the actual
    losses suffered in the event of an earthquake would not exceed
    the amount of such insurance coverage.                           
|   
|(c) |  | These amounts include our loss exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(d) |  | This coverage includes nuclear, chemical and biological events
    under the Terrorism Risk Insurance Act of 2002
    (TRIA). This coverage does not apply to non-TRIA
    events (which are terrorism events that are not committed by a
    foreigner or a foreign country). We maintain separate insurance
    with a $325 million annual aggregate limit subject to a
    deductible of $1 million for non-TRIA events. This separate
    coverage for non-TRIA events excludes nuclear, biological and
    chemical events.
|   
|    |  | TRIA established the Terrorism Risk Insurance Program
    (TRIP) to mandate that insurance carriers offer
    insurance covering physical damage from terrorist incidents
    certified by the U.S. government as foreign terrorist acts.
    Under TRIP, the federal government shares in the risk of loss
    associated with                                                                                                                                                                                                 

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | certain future terrorist acts. TRIA was extended for two years
    under the Terrorism Risk Insurance Extension Act
    (TRIEA), which established new requirements and
    expires on December 31, 2007. TRIEA created a new program
    trigger for any certified act of terrorism occurring after
    March 31, 2006 that prohibits payment of federal
    compensation unless the aggregate industry insured losses
    resulting from that act of terrorism exceed $50 million for
    2006 and $100 million for 2007. The trigger for federal
    reimbursement through March 31, 2006 is $5 million,
    rather than $50 million. The full interim guidelines
    established by the U.S. Treasury Department explaining
    these and other new requirements are available at
    www.treas.gov/trip. There can be no assurance that TRIEA will be
    further extended. Should such legislation not be extended, the
    premiums and scope of coverages for this program could be
    adversely affected.
|   
|(e) |  | This amount is in excess of our deductible amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  









| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | Increases in taxes and regulatory compliance costs, including
    compliance with the Americans with Disabilities Act, may reduce
    our net income







16



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| |                                                      
| | -----------------------------------------------------
| | Environmental problems are possible and can be costly





| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the owner or operator may have to pay a governmental entity or
    third parties for property damage and for investigation and
    clean-up costs incurred
    by these parties in connection with the contamination;
|
| |  | environmental laws typically impose
    clean-up responsibility
    and liability without regard to whether the owner or operator
    knew about or caused the presence of the contaminants;                         
|
| |  | even if more than one person may have been responsible for the
    contamination, each person covered by the environmental laws may
    be held responsible for all of the
    clean-up costs
    incurred; and      
|
| |  | third parties, such as neighboring property owners, may sue the
    owner or operator of a site for damages and costs resulting from
    environmental contamination emanating or migrating from that
    site.      





| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | properly manage and maintain the asbestos;                                                                                                                
|
| |  | notify and/or train those who may come into contact with
    asbestos, such as tenants, visitors and employees; and                                       
|
| |  | undertake special precautions, including removal or other
    abatement, if asbestos would be disturbed during renovation or
    demolition of a building.







| |                                                                                                    
| | ---------------------------------------------------------------------------------------------------
| | We may not control the decisions of joint ventures or
    partnerships in which we have an interest





| |   |                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the possibility that our co-venturers or partners might at any
    time have economic or other business interests or goals that are
    inconsistent with our business interests or goals;                                                             
|
| |  | the possibility that our co-venturers or partners may be in a
    position to take action contrary to our instructions or requests
    or contrary to our policies or objectives (including actions
    that may be inconsistent with our REIT status);
|
| |  | the possibility that our co-venturers or partners may have
    different objectives from us regarding the appropriate timing
    and pricing of any sale or refinancing of properties; and                                                             
|
| |  | the possibility that our co-venturers or partners might become
    bankrupt or insolvent.                                                                                                                                                              



17



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| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | Scheduled debt payments could adversely affect us, including
    as a result of refinancing risk and foreclosure risk





| |   |                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may need to dispose of one or more of our properties upon
    disadvantageous terms;                                                                                                                                                     
|
| |  | if we mortgage property to secure payment of indebtedness and
    are unable to meet mortgage payments, the mortgagee could
    foreclose upon such property or appoint a receiver to receive an
    assignment of our rents and leases; and
|
| |  | foreclosures upon mortgaged property could create taxable income
    without accompanying cash proceeds and, therefore, hinder our
    ability to meet the REIT distribution requirements of the
    Internal Revenue Code.                 





| |                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------
| | We are obligated to comply with financial covenants in our
    debt agreements that could restrict our range of operating
    activities





18



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| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Our leverage could limit our ability to obtain additional
    financing and have other adverse effects







| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | Rising interest rates or a downgrade in credit ratings could
    adversely affect our cash flow







| |                                       
| | --------------------------------------
| | Our hedging arrangements involve risks





| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | In order to maintain our REIT status, we may need to borrow
    funds on a short-term basis during unfavorable market
    conditions



19



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| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Provisions of Maryland law and our declaration of trust and
    bylaws could inhibit changes in control





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Removal of trustees  Under our declaration of
    trust, subject to the rights of one or more classes or series of
    preferred shares to elect one or more trustees, a trustee may be
    removed at any time, but only with cause, at a meeting of the
    shareholders by the affirmative vote of the holders of not less
    than a majority of the shares then outstanding and entitled to
    vote generally in the election of trustees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Unsolicited takeover provisions of Maryland
    law  Maryland law provides protection for
    Maryland REITs against unsolicited takeovers by protecting the
    board of trustees with regard to actions taken in a takeover
    context. Maryland law provides that the duties of trustees will
    not require them to (a) accept, recommend or respond to any
    proposal by a person seeking to acquire control,
    (b) authorize the REIT to redeem any rights under, modify
    or render inapplicable a shareholder rights plan, (c) make
    a determination under the Maryland Business Combination Act or
    the Maryland Control Share Acquisition Act, or (d) act or
    fail to act solely because of the effect the act or failure to
    act may have on an acquisition or potential acquisition of
    control or the amount or type of consideration that may be
    offered or paid to shareholders in an acquisition. Maryland law
    also establishes a presumption that an act of a trustee
    satisfies the required standard of care. In addition, an act of
    a trustee relating to or affecting an acquisition or a potential
    acquisition of control is not subject under Maryland law to a
    higher duty or greater scrutiny than is applied to any other act
    of a trustee. Maryland law also provides that the duty of a
    trustee is only enforceable by the REIT or in the right of the
    REIT. A shareholder suit to enforce the duty of a trustee,
    therefore, can only be brought by or in the right of Equity
    Office.
|
| |  | Call of special meetings of shareholders  Our
    bylaws provide that special meetings of shareholders may be
    called only by the chairman of the board, the president,
    one-third of the trustees or by the holders of shares entitled
    to cast not less than a majority of all the votes entitled to be
    cast at the meeting. This provision limits the ability of
    shareholders to call special meetings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Advance notice provisions for shareholder nominations and
    shareholder new business proposals  Our bylaws
    require advance written notice for shareholders to nominate a
    trustee or bring other business before a meeting of
    shareholders. This provision limits the ability of shareholders
    to make nominations for trustees or introduce other proposals
    that are not timely received for consideration at a meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Board authority to issue preferred shares without shareholder
    approval  Our board of trustees is authorized to
    issue preferred shares having a preference as to dividends or
    liquidation over the common shares without shareholder approval.
    The issuance of preferred shares could adversely affect the
    voting power of the holders of our common shares and could be
    used to discourage, delay or prevent a change in control of
    Equity Office.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Two-thirds shareholder vote required to approve many
    amendments to our declaration of trust  Under
    Maryland law and our declaration of trust, the trustees, by a
    two-thirds vote, may at any time amend the declaration of trust
    solely to enable Equity Office to qualify as a REIT under the
    Internal Revenue Code or as a real estate investment trust under
    Maryland law, without action by Equity Office                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

20



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | shareholders. Our board of trustees also may amend the
    declaration of trust to set the terms of one or more series of
    preferred shares without action by holders of Equity Office
    common shares. Other amendments to the declaration of trust must
    first be declared advisable by our board of trustees and
    thereafter must be approved by shareholders by the affirmative
    vote of not less than two-thirds of all votes entitled to be
    cast, or, in the case of amendments to the declaration of trust
    in connection with mergers and other specified business
    combinations or that involve an increase or decrease in the
    number of authorized common shares or preferred shares, not less
    than a majority of all votes entitled to be cast. The two-thirds
    shareholder vote requirement for many amendments to our
    declaration of trust may make amendments to our declaration of
    trust that shareholders believe desirable more difficult to
    effect.                               
|
| |  | Exclusive authority of board to amend bylaws, except for
    specified amendments  Our bylaws provide that the
    power to amend, repeal or adopt new bylaws is vested exclusively
    with the board of trustees, except that any amendments by the
    board of trustees to the bylaw provisions relating to meetings
    of shareholders, the size of the board, and the requirement that
    at least two-thirds of the trustees must be persons who are not
    executive officers of Equity Office or persons affiliated with
    Mr. Zell or his affiliates are subject to the approval of
    shareholders by vote of a majority of the votes cast. These
    provisions may make more difficult bylaw amendments that
    shareholders may believe are desirable.                                                                                                                                                                                                                                                                       
|
| |  | Business combination with interested
    shareholders  The Maryland Business Combination
    Act provides that, unless exempted, a Maryland REIT may not
    engage in business combinations, including mergers, dispositions
    of 10% or more of its assets, issuances of shares and other
    specified transactions, with an interested
    shareholder or its affiliates, for five years after the
    most recent date on which the interested shareholder became an
    interested shareholder and thereafter unless specified criteria
    are met. Our board of trustees has elected by resolution to
    exempt from the provisions of the Maryland Business Combination
    Act any business combination with any person. Our board of
    trustees may, however, repeal this election in whole or in part
    at any time and cause us to become subject to these provisions
    in the future, except with respect to a securityholder who
    became an interested shareholder in connection with our
    formation in July 1997.
|
| |  | Other constituencies  Maryland law expressly
    codifies the authority of a Maryland REIT to include in its
    charter a provision that allows the board of trustees to
    consider the effect of a potential acquisition of control on
    shareholders, employees, suppliers, customers, creditors and
    communities in which offices or other establishments of the
    trust are located. Our declaration of trust does not include a
    provision of this type. Maryland law also provides, however,
    that the inclusion or omission of this type of provision in the
    declaration of trust of a Maryland REIT does not create an
    inference concerning factors that may be considered by the board
    of trustees regarding a potential acquisition of control. This
    law may allow the board of trustees to reject an acquisition
    proposal even though the proposal was in the best interests of
    our shareholders.                                                                                              



| |                                                     
| | ----------------------------------------------------
| | We have share ownership limits for REIT tax purposes



21



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non-U.S.




| |                                  
| | ---------------------------------
| | We are dependent on key personnel





| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | Changes in market conditions could adversely affect the
    market value of our securities





| |   |                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the extent of investor interest in us;                                                                                                                                                                                                                
|
| |  | the general reputation of REITs and the attractiveness of our
    equity securities (including anticipated levels of distribution)
    in comparison to other equity securities, including securities
    issued by other real estate-based companies;
|
| |  | our financial performance, credit rating and the perceived
    attractiveness of our portfolio of assets; and                                                                                                                                         
|
| |  | general stock and bond market conditions.                                                                                                                                                                                                             





| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Market interest rates may have an effect on the value of our
    debt and equity securities





| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | The number of shares available for future sale could
    adversely affect the market value of our securities



22



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##### Table of Contents







| |                                                                      
| | ---------------------------------------------------------------------
| | We are dependent on external sources of capital for future
    growth





| |                                                                                  
| | ---------------------------------------------------------------------------------
| | If we fail to qualify as a REIT, our shareholders would be
    adversely affected







| |                  
| | -----------------
| | We pay some taxes



23



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| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | We may be subject to adverse legislative or regulatory tax
    changes that could reduce the market price of our common
    shares



Tax Consequences


8-K





Item 1B.     Unresolved Staff
Comments.




24



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##### Table of Contents








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



Office Property Statistics




|        |       |           |  |                        |             |                        |     |               |                            |  |             |  |  |             |                  |   |             |  |      |              |  |  |             |  |  |  |       |   |  |  |      |   |  |  |       |  
|------- | ----- | --------- |  | ---------------------- | ----------- | ---------------------- | --- | ------------- | -------------------------- |  | ----------- |  |  | ----------- | ---------------- | - | ----------- |  | ---- | ------------ |  |  | ----------- |  |  |  | ----- | - |  |  | ---- | - |  |  | ----- | -
|        |       |           |  |                        |             | Total Office Portfolio |     |               | Effective Office Portfolio | 
|        |       |           |  |                        |             |                        |     |               |                            | 
|        |       |           |  |                        |             |                        |     | Percentage of |                            |  |             |  |  |             | Percentage of    |   |             | 
|        |       |           |  |                        |             |                        |     | Total Office  |                            |  |             |  |  |             | Effective Office |   |             |  |      | Percent of   | 
|        |       |           |  |                        |             |                        |     | Portfolio     |                            |  |             |  |  |             | Portfolio        |   |             |  |      | Property Net | 
|        |       | Number of |  |                        | Rentable    |                        |     | Rentable      |                            |  | Percent     |  |  | Rentable    |                  |   | Rentable    |  |      | Percent      |  |  | Operating   | 
|Markets |       | Buildings |  |                        | Square Feet |                        |     | Square Feet   |                            |  | Occupied    |  |  | Square Feet |                  |   | Square Feet |  |      | Occupied     |  |  | Income(a)   | 
|        |       |           |  |                        |             |                        |     |               |                            |  |             |  |  |             |                  |   |             |  |      |              |  |  |             | 
|        | 1     |           |  | Boston                 |             |                        | 52  |               |                            |  | 12,680,201  |  |  |             | 11.4             | % |             |  | 91.3 | %            |  |  | 11,606,811  |  |  |  | 11.4  | % |  |  | 91.9 | % |  |  | 14.0  | %
|        | 2     |           |  | San Francisco          |             |                        | 89  |               |                            |  | 10,232,402  |  |  |             | 9.2              | % |             |  | 87.2 | %            |  |  | 9,424,616   |  |  |  | 9.3   | % |  |  | 87.7 | % |  |  | 10.9  | %
|        | 3     |           |  | Los Angeles            |             |                        | 48  |               |                            |  | 8,410,339   |  |  |             | 7.5              | % |             |  | 93.7 | %            |  |  | 7,280,010   |  |  |  | 7.2   | % |  |  | 93.3 | % |  |  | 9.5   | %
|        | 4     |           |  | New York               |             |                        | 7   |               |                            |  | 5,367,110   |  |  |             | 4.8              | % |             |  | 96.1 | %            |  |  | 5,361,421   |  |  |  | 5.3   | % |  |  | 96.1 | % |  |  | 8.9   | %
|        | 5     |           |  | San Jose               |             |                        | 81  |               |                            |  | 6,485,614   |  |  |             | 5.8              | % |             |  | 85.1 | %            |  |  | 6,485,614   |  |  |  | 6.4   | % |  |  | 85.1 | % |  |  | 8.8   | %
|        | 6     |           |  | Seattle                |             |                        | 54  |               |                            |  | 9,989,686   |  |  |             | 9.0              | % |             |  | 92.7 | %            |  |  | 8,776,587   |  |  |  | 8.6   | % |  |  | 93.2 | % |  |  | 7.6   | %
|        | 7     |           |  | Washington, D.C.       |             |                        | 28  |               |                            |  | 6,619,080   |  |  |             | 5.9              | % |             |  | 94.2 | %            |  |  | 6,096,783   |  |  |  | 6.0   | % |  |  | 93.8 | % |  |  | 7.6   | %
|        | 8     |           |  | Chicago                |             |                        | 33  |               |                            |  | 11,700,945  |  |  |             | 10.5             | % |             |  | 89.8 | %            |  |  | 10,442,233  |  |  |  | 10.3  | % |  |  | 89.9 | % |  |  | 6.9   | %
|        | 9     |           |  | Atlanta                |             |                        | 40  |               |                            |  | 7,733,425   |  |  |             | 6.9              | % |             |  | 85.6 | %            |  |  | 7,028,021   |  |  |  | 6.9   | % |  |  | 84.5 | % |  |  | 4.6   | %
|        | 10    |           |  | Orange County          |             |                        | 32  |               |                            |  | 6,034,128   |  |  |             | 5.4              | % |             |  | 94.1 | %            |  |  | 6,034,128   |  |  |  | 5.9   | % |  |  | 94.1 | % |  |  | 4.5   | %
|        | 11    |           |  | Portland               |             |                        | 45  |               |                            |  | 4,164,536   |  |  |             | 3.7              | % |             |  | 91.9 | %            |  |  | 4,164,536   |  |  |  | 4.1   | % |  |  | 91.9 | % |  |  | 2.8   | %
|        | 12    |           |  | Denver                 |             |                        | 15  |               |                            |  | 4,553,765   |  |  |             | 4.1              | % |             |  | 89.6 | %            |  |  | 4,553,765   |  |  |  | 4.5   | % |  |  | 89.6 | % |  |  | 2.4   | %
|        | 13    |           |  | Sacramento             |             |                        | 37  |               |                            |  | 2,612,655   |  |  |             | 2.3              | % |             |  | 94.1 | %            |  |  | 2,410,265   |  |  |  | 2.4   | % |  |  | 93.8 | % |  |  | 2.0   | %
|        | 14    |           |  | Stamford               |             |                        | 7   |               |                            |  | 1,654,296   |  |  |             | 1.5              | % |             |  | 92.7 | %            |  |  | 1,654,296   |  |  |  | 1.6   | % |  |  | 92.7 | % |  |  | 1.9   | %
|        | 15    |           |  | Oakland/ East Bay      |             |                        | 12  |               |                            |  | 2,606,341   |  |  |             | 2.3              | % |             |  | 92.9 | %            |  |  | 2,330,856   |  |  |  | 2.3   | % |  |  | 92.2 | % |  |  | 1.9   | %
|        | 16    |           |  | Austin                 |             |                        | 15  |               |                            |  | 2,856,424   |  |  |             | 2.6              | % |             |  | 80.3 | %            |  |  | 2,856,424   |  |  |  | 2.8   | % |  |  | 80.3 | % |  |  | 1.9   | %
|        | 17    |           |  | San Diego              |             |                        | 17  |               |                            |  | 2,365,977   |  |  |             | 2.1              | % |             |  | 87.3 | %            |  |  | 1,874,702   |  |  |  | 1.8   | % |  |  | 86.0 | % |  |  | 1.7   | %
|        | 18-22 |           |  | All others             |             |                        | 10  |               |                            |  | 5,442,129   |  |  |             | 4.9              | % |             |  | 89.0 | %            |  |  | 3,327,223   |  |  |  | 3.3   | % |  |  | 88.0 | % |  |  | 2.2   | %
|        |       |           |  |                        |             |                        |     |               |                            |  |             |  |  |             |                  |   |             |  |      |              |  |  |             |  |  |  |      
|        |       |           |  | Total/Weighted Average |             |                        | 622 |               |                            |  | 111,509,053 |  |  |             | 100.0            | % |             |  | 90.5 | %            |  |  | 101,708,291 |  |  |  | 100.0 | % |  |  | 90.4 | % |  |  | 100.0 | %
|        |       |           |  |                        |             |                        |     |               |                            |  |             |  |  |             |                  |   |             |  |      |              |  |  |             |  |  |  |      






|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Property Net Operating Income represents fourth quarter 2005
    property net operating income from continuing operations (see
    Item 8  Note 19) for wholly-owned
    properties and our share of consolidated and unconsolidated
    joint ventures owned and in service as of December 31, 2005.

Total Office Portfolio Lease Expiration Schedule




25



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Total Office Portfolio Lease Expiration Schedule (a)


December 31, 2005


|                                            |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |   |  |   |         |   |  |   |           |   |  |   |            |  
|------------------------------------------- |  | ----------------------------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | - |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | ------- | - |  | ---- | --------- | - | ---- | - | --------- | ------------- |  | - | ------- | - |  | - | ------- | - |  | - | --------- | - |  | - | ---------- | -
|                                            |  | Year of Expiration                                    |           |   |     
|                                            |  |                                                       |           |   |     
|                                            |  | 2006(b)                                               |           |   | 2007 |   |           | 2008 |  |   | 2009      |   |  | 2010 |           |   | 2011 |   |           | 2012 |  |   | 2013    |   |  | 2014 |           |   | 2015 |   |           | Thereafter(f) |  |   | Totals  |  
|                                            |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |  
|                                            |  | (Dollars in thousands except per square foot amounts) |          
|Boston                                      |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |   |  |   |         |   |  |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 901,117   |   |      |   | 1,173,913 |      |  |   | 1,593,288 |   |  |      | 1,328,450 |   |      |   | 1,557,965 |      |  |   | 454,243 |   |  |      | 1,095,733 |   |      |   | 1,425,253 |               |  |   | 727,593 |   |  |   | 272,129 |   |  |   | 1,045,935 |   |  |   | 11,575,619 |  
|% Square Feet(d)                            |  |                                                       | 7.1       | % |      |   | 9.3       | %    |  |   | 12.6      | % |  |      | 10.5      | % |      |   | 12.3      | %    |  |   | 3.6     | % |  |      | 8.6       | % |      |   | 11.2      | %             |  |   | 5.7     | % |  |   | 2.1     | % |  |   | 8.2       | % |  |   | 91.3       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 26,598    |   |      | $ | 49,148    |      |  | $ | 57,753    |   |  | $    | 49,655    |   |      | $ | 59,448    |      |  | $ | 18,622  |   |  | $    | 45,837    |   |      | $ | 59,454    |               |  | $ | 26,310  |   |  | $ | 9,057   |   |  | $ | 41,630    |   |  | $ | 443,512    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 29.52     |   |      | $ | 41.87     |      |  | $ | 36.25     |   |  | $    | 37.38     |   |      | $ | 38.16     |      |  | $ | 41.00   |   |  | $    | 41.83     |   |      | $ | 41.71     |               |  | $ | 36.16   |   |  | $ | 33.28   |   |  | $ | 39.80     |   |  | $ | 38.31      |  
|                                           
|San Francisco                               |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |   |  |   |         |   |  |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 1,124,597 |   |      |   | 1,278,854 |      |  |   | 1,411,339 |   |  |      | 913,602   |   |      |   | 1,864,124 |      |  |   | 792,332 |   |  |      | 432,610   |   |      |   | 378,371   |               |  |   | 223,717 |   |  |   | 296,682 |   |  |   | 210,420   |   |  |   | 8,926,648  |  
|% Square Feet(d)                            |  |                                                       | 11.0      | % |      |   | 12.5      | %    |  |   | 13.8      | % |  |      | 8.9       | % |      |   | 18.2      | %    |  |   | 7.7     | % |  |      | 4.2       | % |      |   | 3.7       | %             |  |   | 2.2     | % |  |   | 2.9     | % |  |   | 2.1       | % |  |   | 87.2       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 46,398    |   |      | $ | 43,899    |      |  | $ | 52,739    |   |  | $    | 29,202    |   |      | $ | 74,656    |      |  | $ | 29,972  |   |  | $    | 11,847    |   |      | $ | 11,611    |               |  | $ | 5,828   |   |  | $ | 8,863   |   |  | $ | 13,429    |   |  | $ | 328,444    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 41.26     |   |      | $ | 34.33     |      |  | $ | 37.37     |   |  | $    | 31.96     |   |      | $ | 40.05     |      |  | $ | 37.83   |   |  | $    | 27.38     |   |      | $ | 30.69     |               |  | $ | 26.05   |   |  | $ | 29.87   |   |  | $ | 63.82     |   |  | $ | 36.79      |  
|                                           
|Los Angeles                                 |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |   |  |   |         |   |  |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 977,496   |   |      |   | 1,247,266 |      |  |   | 710,237   |   |  |      | 777,186   |   |      |   | 1,032,915 |      |  |   | 592,383 |   |  |      | 709,563   |   |      |   | 536,497   |               |  |   | 358,284 |   |  |   | 665,656 |   |  |   | 276,498   |   |  |   | 7,883,981  |  
|% Square Feet(d)                            |  |                                                       | 11.6      | % |      |   | 14.8      | %    |  |   | 8.4       | % |  |      | 9.2       | % |      |   | 12.3      | %    |  |   | 7.0     | % |  |      | 8.4       | % |      |   | 6.4       | %             |  |   | 4.3     | % |  |   | 7.9     | % |  |   | 3.3       | % |  |   | 93.7       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 35,414    |   |      | $ | 40,802    |      |  | $ | 21,910    |   |  | $    | 21,590    |   |      | $ | 31,617    |      |  | $ | 23,136  |   |  | $    | 23,476    |   |      | $ | 18,110    |               |  | $ | 12,621  |   |  | $ | 20,973  |   |  | $ | 8,473     |   |  | $ | 258,122    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 36.23     |   |      | $ | 32.71     |      |  | $ | 30.85     |   |  | $    | 27.78     |   |      | $ | 30.61     |      |  | $ | 39.06   |   |  | $    | 33.09     |   |      | $ | 33.76     |               |  | $ | 35.23   |   |  | $ | 31.51   |   |  | $ | 30.64     |   |  | $ | 32.74      |  
|                                           
|New York                                    |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |   |  |   |         |   |  |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 151,627   |   |      |   | 179,343   |      |  |   | 189,327   |   |  |      | 1,261,182 |   |      |   | 322,130   |      |  |   | 437,637 |   |  |      | 476,698   |   |      |   | 445,167   |               |  |   | 114,544 |   |  |   | 84,009  |   |  |   | 1,493,740 |   |  |   | 5,155,404  |  
|% Square Feet(d)                            |  |                                                       | 2.8       | % |      |   | 3.3       | %    |  |   | 3.5       | % |  |      | 23.5      | % |      |   | 6.0       | %    |  |   | 8.2     | % |  |      | 8.9       | % |      |   | 8.3       | %             |  |   | 2.1     | % |  |   | 1.6     | % |  |   | 27.8      | % |  |   | 96.1       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 9,096     |   |      | $ | 9,199     |      |  | $ | 7,732     |   |  | $    | 74,582    |   |      | $ | 14,910    |      |  | $ | 23,841  |   |  | $    | 21,225    |   |      | $ | 24,120    |               |  | $ | 6,953   |   |  | $ | 5,950   |   |  | $ | 73,703    |   |  | $ | 271,311    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 59.99     |   |      | $ | 51.29     |      |  | $ | 40.84     |   |  | $    | 59.14     |   |      | $ | 46.29     |      |  | $ | 54.48   |   |  | $    | 44.53     |   |      | $ | 54.18     |               |  | $ | 60.70   |   |  | $ | 70.83   |   |  | $ | 49.34     |   |  | $ | 52.63      |  
|                                           
|San Jose                                    |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |           |   |      |   |           |               |  |   |         |   |  |   |         |   |  |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 710,862   |   |      |   | 775,129   |      |  |   | 534,178   |   |  |      | 497,635   |   |      |   | 962,887   |      |  |   | 742,373 |   |  |      | 488,279   |   |      |   | 129,475   |               |  |   | 331,712 |   |  |   | 193,645 |   |  |   | 154,992   |   |  |   | 5,521,167  |  
|% Square Feet(d)                            |  |                                                       | 11.0      | % |      |   | 12.0      | %    |  |   | 8.2       | % |  |      | 7.7       | % |      |   | 14.8      | %    |  |   | 11.4    | % |  |      | 7.5       | % |      |   | 2.0       | %             |  |   | 5.1     | % |  |   | 3.0     | % |  |   | 2.4       | % |  |   | 85.1       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 23,881    |   |      | $ | 25,482    |      |  | $ | 12,935    |   |  | $    | 14,081    |   |      | $ | 36,835    |      |  | $ | 42,932  |   |  | $    | 32,566    |   |      | $ | 4,079     |               |  | $ | 6,512   |   |  | $ | 6,558   |   |  | $ | 4,245     |   |  | $ | 210,106    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 33.59     |   |      | $ | 32.87     |      |  | $ | 24.21     |   |  | $    | 28.30     |   |      | $ | 38.25     |      |  | $ | 57.83   |   |  | $    | 66.70     |   |      | $ | 31.50     |               |  | $ | 19.63   |   |  | $ | 33.87   |   |  | $ | 27.39     |   |  | $ | 38.05      |  

26



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##### Table of Contents





|                                                     |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |           |   |  |   |         |   |  |   |            |  
|---------------------------------------------------- |  | ----------------------------------------------------- | --------- | - | ---- | - | ------- | ---- |  | - | --------- | - |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | ------- | - |  | ---- | ------- | - | ---- | - | ------- | ------------- |  | - | ------- | - |  | - | --------- | - |  | - | ------- | - |  | - | ---------- | -
|Total Office Portfolio Lease Expiration Schedule (a) | 
|December 31, 2005  (Continued)                      | 
|                                                     |  | Year of Expiration                                    |           |   |     
|                                                     |  |                                                       |           |   |     
|                                                     |  | 2006(b)                                               |           |   | 2007 |   |         | 2008 |  |   | 2009      |   |  | 2010 |           |   | 2011 |   |           | 2012 |  |   | 2013    |   |  | 2014 |         |   | 2015 |   |         | Thereafter(f) |  |   | Totals  |  
|                                                     |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |  
|                                                     |  | (Dollars in thousands except per square foot amounts) |          
|Seattle                                              |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |           |   |  |   |         |   |  |   |            |  
|Square Feet(c)                                       |  |                                                       | 981,173   |   |      |   | 936,770 |      |  |   | 1,237,815 |   |  |      | 1,396,313 |   |      |   | 1,446,993 |      |  |   | 561,694 |   |  |      | 509,514 |   |      |   | 574,545 |               |  |   | 429,886 |   |  |   | 520,697   |   |  |   | 665,318 |   |  |   | 9,260,718  |  
|% Square Feet(d)                                     |  |                                                       | 9.8       | % |      |   | 9.4     | %    |  |   | 12.4      | % |  |      | 14.0      | % |      |   | 14.5      | %    |  |   | 5.6     | % |  |      | 5.1     | % |      |   | 5.8     | %             |  |   | 4.3     | % |  |   | 5.2       | % |  |   | 6.7     | % |  |   | 92.7       | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 26,725    |   |      | $ | 25,230  |      |  | $ | 30,996    |   |  | $    | 33,838    |   |      | $ | 38,314    |      |  | $ | 13,364  |   |  | $    | 14,119  |   |      | $ | 14,936  |               |  | $ | 9,408   |   |  | $ | 10,445    |   |  | $ | 17,161  |   |  | $ | 234,536    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 27.24     |   |      | $ | 26.93   |      |  | $ | 25.04     |   |  | $    | 24.23     |   |      | $ | 26.48     |      |  | $ | 23.79   |   |  | $    | 27.71   |   |      | $ | 26.00   |               |  | $ | 21.88   |   |  | $ | 20.06     |   |  | $ | 25.79   |   |  | $ | 25.33      |  
|                                                    
|Washington, D.C.                                     |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |           |   |  |   |         |   |  |   |            |  
|Square Feet(c)                                       |  |                                                       | 489,312   |   |      |   | 808,707 |      |  |   | 933,734   |   |  |      | 662,220   |   |      |   | 445,135   |      |  |   | 810,318 |   |  |      | 359,189 |   |      |   | 250,325 |               |  |   | 672,696 |   |  |   | 556,174   |   |  |   | 247,631 |   |  |   | 6,235,441  |  
|% Square Feet(d)                                     |  |                                                       | 7.4       | % |      |   | 12.2    | %    |  |   | 14.1      | % |  |      | 10.0      | % |      |   | 6.7       | %    |  |   | 12.2    | % |  |      | 5.4     | % |      |   | 3.8     | %             |  |   | 10.2    | % |  |   | 8.4       | % |  |   | 3.7     | % |  |   | 94.2       | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 15,364    |   |      | $ | 23,249  |      |  | $ | 31,946    |   |  | $    | 20,944    |   |      | $ | 17,630    |      |  | $ | 26,803  |   |  | $    | 11,390  |   |      | $ | 8,967   |               |  | $ | 23,226  |   |  | $ | 20,837    |   |  | $ | 9,630   |   |  | $ | 209,986    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 31.40     |   |      | $ | 28.75   |      |  | $ | 34.21     |   |  | $    | 31.63     |   |      | $ | 39.61     |      |  | $ | 33.08   |   |  | $    | 31.71   |   |      | $ | 35.82   |               |  | $ | 34.53   |   |  | $ | 37.46     |   |  | $ | 38.89   |   |  | $ | 33.68      |  
|                                                    
|Chicago                                              |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |           |   |  |   |         |   |  |   |            |  
|Square Feet(c)                                       |  |                                                       | 1,525,507 |   |      |   | 929,832 |      |  |   | 1,394,482 |   |  |      | 983,602   |   |      |   | 1,242,517 |      |  |   | 624,781 |   |  |      | 738,544 |   |      |   | 534,629 |               |  |   | 538,670 |   |  |   | 1,321,163 |   |  |   | 673,270 |   |  |   | 10,506,997 |  
|% Square Feet(d)                                     |  |                                                       | 13.0      | % |      |   | 7.9     | %    |  |   | 11.9      | % |  |      | 8.4       | % |      |   | 10.6      | %    |  |   | 5.3     | % |  |      | 6.3     | % |      |   | 4.6     | %             |  |   | 4.6     | % |  |   | 11.3      | % |  |   | 5.8     | % |  |   | 89.8       | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 41,845    |   |      | $ | 23,826  |      |  | $ | 41,391    |   |  | $    | 28,751    |   |      | $ | 32,878    |      |  | $ | 15,988  |   |  | $    | 20,553  |   |      | $ | 14,590  |               |  | $ | 13,900  |   |  | $ | 34,067    |   |  | $ | 13,880  |   |  | $ | 281,669    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 27.43     |   |      | $ | 25.62   |      |  | $ | 29.68     |   |  | $    | 29.23     |   |      | $ | 26.46     |      |  | $ | 25.59   |   |  | $    | 27.83   |   |      | $ | 27.29   |               |  | $ | 25.80   |   |  | $ | 25.79     |   |  | $ | 20.62   |   |  | $ | 26.81      |  
|                                                    
|Atlanta                                              |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |           |   |  |   |         |   |  |   |            |  
|Square Feet(c)                                       |  |                                                       | 1,322,323 |   |      |   | 693,987 |      |  |   | 699,975   |   |  |      | 779,051   |   |      |   | 1,397,137 |      |  |   | 456,169 |   |  |      | 210,650 |   |      |   | 272,422 |               |  |   | 338,366 |   |  |   | 181,853   |   |  |   | 266,959 |   |  |   | 6,618,892  |  
|% Square Feet(d)                                     |  |                                                       | 17.1      | % |      |   | 9.0     | %    |  |   | 9.1       | % |  |      | 10.1      | % |      |   | 18.1      | %    |  |   | 5.9     | % |  |      | 2.7     | % |      |   | 3.5     | %             |  |   | 4.4     | % |  |   | 2.4       | % |  |   | 3.5     | % |  |   | 85.6       | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 37,172    |   |      | $ | 15,576  |      |  | $ | 13,998    |   |  | $    | 22,102    |   |      | $ | 36,313    |      |  | $ | 9,809   |   |  | $    | 3,847   |   |      | $ | 5,729   |               |  | $ | 6,338   |   |  | $ | 3,516     |   |  | $ | 5,171   |   |  | $ | 159,571    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 28.11     |   |      | $ | 22.44   |      |  | $ | 20.00     |   |  | $    | 28.37     |   |      | $ | 25.99     |      |  | $ | 21.50   |   |  | $    | 18.26   |   |      | $ | 21.03   |               |  | $ | 18.73   |   |  | $ | 19.33     |   |  | $ | 19.37   |   |  | $ | 24.11      |  
|                                                    
|Orange County                                        |  |                                                       |           |   |      |   |         |      |  |   |           |   |  |      |           |   |      |   |           |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |           |   |  |   |         |   |  |   |            |  
|Square Feet(c)                                       |  |                                                       | 970,209   |   |      |   | 983,647 |      |  |   | 1,548,406 |   |  |      | 573,502   |   |      |   | 677,621   |      |  |   | 432,283 |   |  |      | 248,030 |   |      |   | 170,745 |               |  |   | 6,536   |   |  |   | 21,146    |   |  |   | 46,707  |   |  |   | 5,678,832  |  
|% Square Feet(d)                                     |  |                                                       | 16.1      | % |      |   | 16.3    | %    |  |   | 25.7      | % |  |      | 9.5       | % |      |   | 11.2      | %    |  |   | 7.2     | % |  |      | 4.1     | % |      |   | 2.8     | %             |  |   | 0.1     | % |  |   | 0.4       | % |  |   | 0.8     | % |  |   | 94.1       | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 26,241    |   |      | $ | 25,114  |      |  | $ | 36,531    |   |  | $    | 14,523    |   |      | $ | 16,182    |      |  | $ | 9,797   |   |  | $    | 6,519   |   |      | $ | 4,068   |               |  | $ | 165     |   |  | $ | 520       |   |  | $ | 444     |   |  | $ | 140,104    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 27.05     |   |      | $ | 25.53   |      |  | $ | 23.59     |   |  | $    | 25.32     |   |      | $ | 23.88     |      |  | $ | 22.66   |   |  | $    | 26.28   |   |      | $ | 23.83   |               |  | $ | 25.24   |   |  | $ | 24.59     |   |  | $ | 9.51    |   |  | $ | 24.67      |  

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##### Table of Contents





|                                                     |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |        |   |  |   |         |   |  |   |           |  
|---------------------------------------------------- |  | ----------------------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - | ---- | - | ------- | ------------- |  | - | ------- | - |  | - | ------ | - |  | - | ------- | - |  | - | --------- | -
|Total Office Portfolio Lease Expiration Schedule (a) | 
|December 31, 2005  (Continued)                      | 
|                                                     |  | Year of Expiration                                    |         |   |     
|                                                     |  |                                                       |         |   |     
|                                                     |  | 2006(b)                                               |         |   | 2007 |   |         | 2008 |  |   | 2009    |   |  | 2010 |         |   | 2011 |   |         | 2012 |  |   | 2013    |   |  | 2014 |         |   | 2015 |   |         | Thereafter(f) |  |   | Totals  |  
|                                                     |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |  
|                                                     |  | (Dollars in thousands except per square foot amounts) |        
|Portland                                             |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |        |   |  |   |         |   |  |   |           |  
|Square Feet(c)                                       |  |                                                       | 491,417 |   |      |   | 606,095 |      |  |   | 430,980 |   |  |      | 604,117 |   |      |   | 802,776 |      |  |   | 344,599 |   |  |      | 113,042 |   |      |   | 58,517  |               |  |   | 62,113  |   |  |   | 61,688 |   |  |   | 251,496 |   |  |   | 3,826,840 |  
|% Square Feet(d)                                     |  |                                                       | 11.8    | % |      |   | 14.6    | %    |  |   | 10.3    | % |  |      | 14.5    | % |      |   | 19.3    | %    |  |   | 8.3     | % |  |      | 2.7     | % |      |   | 1.4     | %             |  |   | 1.5     | % |  |   | 1.5    | % |  |   | 6.0     | % |  |   | 91.9      | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 11,551  |   |      | $ | 14,734  |      |  | $ | 9,265   |   |  | $    | 12,755  |   |      | $ | 15,348  |      |  | $ | 7,971   |   |  | $    | 2,333   |   |      | $ | 1,491   |               |  | $ | 1,559   |   |  | $ | 1,295  |   |  | $ | 4,335   |   |  | $ | 82,637    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 23.51   |   |      | $ | 24.31   |      |  | $ | 21.50   |   |  | $    | 21.11   |   |      | $ | 19.12   |      |  | $ | 23.13   |   |  | $    | 20.64   |   |      | $ | 25.48   |               |  | $ | 25.10   |   |  | $ | 20.99  |   |  | $ | 17.24   |   |  | $ | 21.59     |  
|                                                    
|Denver                                               |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |        |   |  |   |         |   |  |   |           |  
|Square Feet(c)                                       |  |                                                       | 587,911 |   |      |   | 607,280 |      |  |   | 607,624 |   |  |      | 688,442 |   |      |   | 402,051 |      |  |   | 292,518 |   |  |      | 419,764 |   |      |   | 77,953  |               |  |   | 221,986 |   |  |   | 56,783 |   |  |   | 116,053 |   |  |   | 4,078,365 |  
|% Square Feet(d)                                     |  |                                                       | 12.9    | % |      |   | 13.3    | %    |  |   | 13.3    | % |  |      | 15.1    | % |      |   | 8.8     | %    |  |   | 6.4     | % |  |      | 9.2     | % |      |   | 1.7     | %             |  |   | 4.9     | % |  |   | 1.2    | % |  |   | 2.5     | % |  |   | 89.6      | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 12,341  |   |      | $ | 11,617  |      |  | $ | 11,222  |   |  | $    | 15,681  |   |      | $ | 7,685   |      |  | $ | 5,158   |   |  | $    | 7,191   |   |      | $ | 1,472   |               |  | $ | 5,112   |   |  | $ | 677    |   |  | $ | 1,437   |   |  | $ | 79,593    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 20.99   |   |      | $ | 19.13   |      |  | $ | 18.47   |   |  | $    | 22.78   |   |      | $ | 19.11   |      |  | $ | 17.63   |   |  | $    | 17.13   |   |      | $ | 18.88   |               |  | $ | 23.03   |   |  | $ | 11.92  |   |  | $ | 12.38   |   |  | $ | 19.52     |  
|                                                    
|Sacramento                                           |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |        |   |  |   |         |   |  |   |           |  
|Square Feet(c)                                       |  |                                                       | 385,987 |   |      |   | 534,481 |      |  |   | 314,406 |   |  |      | 539,010 |   |      |   | 253,083 |      |  |   | 164,180 |   |  |      | 120,112 |   |      |   | 25,835  |               |  |   | 26,448  |   |  |   | 24,719 |   |  |   | 71,170  |   |  |   | 2,459,431 |  
|% Square Feet(d)                                     |  |                                                       | 14.8    | % |      |   | 20.5    | %    |  |   | 12.0    | % |  |      | 20.6    | % |      |   | 9.7     | %    |  |   | 6.3     | % |  |      | 4.6     | % |      |   | 1.0     | %             |  |   | 1.0     | % |  |   | 0.9    | % |  |   | 2.7     | % |  |   | 94.1      | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 10,117  |   |      | $ | 14,814  |      |  | $ | 8,006   |   |  | $    | 13,752  |   |      | $ | 6,956   |      |  | $ | 4,583   |   |  | $    | 3,605   |   |      | $ | 720     |               |  | $ | 678     |   |  | $ | 789    |   |  | $ | 770     |   |  | $ | 64,790    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 26.21   |   |      | $ | 27.72   |      |  | $ | 25.46   |   |  | $    | 25.51   |   |      | $ | 27.49   |      |  | $ | 27.91   |   |  | $    | 30.01   |   |      | $ | 27.87   |               |  | $ | 25.64   |   |  | $ | 31.92  |   |  | $ | 10.82   |   |  | $ | 26.34     |  
|                                                    
|Stamford                                             |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |        |   |  |   |         |   |  |   |           |  
|Square Feet(c)                                       |  |                                                       | 347,699 |   |      |   | 127,956 |      |  |   | 208,819 |   |  |      | 204,543 |   |      |   | 202,322 |      |  |   | 248,198 |   |  |      | 103,236 |   |      |   | 33,318  |               |  |   | 44,765  |   |  |   |       |   |  |   | 12,916  |   |  |   | 1,533,772 |  
|% Square Feet(d)                                     |  |                                                       | 21.0    | % |      |   | 7.7     | %    |  |   | 12.6    | % |  |      | 12.4    | % |      |   | 12.2    | %    |  |   | 15.0    | % |  |      | 6.2     | % |      |   | 2.0     | %             |  |   | 2.7     | % |  |   | 0.0    | % |  |   | 0.8     | % |  |   | 92.7      | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 11,020  |   |      | $ | 4,717   |      |  | $ | 7,148   |   |  | $    | 6,962   |   |      | $ | 6,830   |      |  | $ | 8,485   |   |  | $    | 3,379   |   |      | $ | 1,011   |               |  | $ | 1,368   |   |  | $ | 0      |   |  | $ | 0       |   |  | $ | 50,920    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 31.69   |   |      | $ | 36.86   |      |  | $ | 34.23   |   |  | $    | 34.04   |   |      | $ | 33.76   |      |  | $ | 34.19   |   |  | $    | 32.73   |   |      | $ | 30.34   |               |  | $ | 30.56   |   |  | $ | 0.00   |   |  | $ | 0.00    |   |  | $ | 33.20     |  
|                                                    
|Oakland/East Bay                                     |  |                                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |      |         |   |      |   |         |               |  |   |         |   |  |   |        |   |  |   |         |   |  |   |           |  
|Square Feet(c)                                       |  |                                                       | 388,484 |   |      |   | 291,343 |      |  |   | 475,527 |   |  |      | 381,256 |   |      |   | 310,442 |      |  |   | 143,047 |   |  |      | 24,073  |   |      |   | 368,749 |               |  |   | 13,500  |   |  |   | 7,066  |   |  |   | 18,390  |   |  |   | 2,421,877 |  
|% Square Feet(d)                                     |  |                                                       | 14.9    | % |      |   | 11.2    | %    |  |   | 18.2    | % |  |      | 14.6    | % |      |   | 11.9    | %    |  |   | 5.5     | % |  |      | 0.9     | % |      |   | 14.1    | %             |  |   | 0.5     | % |  |   | 0.3    | % |  |   | 0.7     | % |  |   | 92.9      | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 13,303  |   |      | $ | 8,824   |      |  | $ | 12,670  |   |  | $    | 9,142   |   |      | $ | 7,998   |      |  | $ | 4,995   |   |  | $    | 678     |   |      | $ | 12,509  |               |  | $ | 348     |   |  | $ | 137    |   |  | $ | 0       |   |  | $ | 70,604    |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 34.24   |   |      | $ | 30.29   |      |  | $ | 26.64   |   |  | $    | 23.98   |   |      | $ | 25.76   |      |  | $ | 34.92   |   |  | $    | 28.16   |   |      | $ | 33.92   |               |  | $ | 25.78   |   |  | $ | 19.39  |   |  | $ | 0.00    |   |  | $ | 29.15     |  

28



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|                                                     |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |           |   |  |      |           |   |      |   |           |               |  |   |           |   |  |   |           |   |  |   |           |   |  |   |             |  
|---------------------------------------------------- |  | ----------------------------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | --------- | - |  | ---- | --------- | - | ---- | - | --------- | ------------- |  | - | --------- | - |  | - | --------- | - |  | - | --------- | - |  | - | ----------- | -
|Total Office Portfolio Lease Expiration Schedule (a) | 
|December 31, 2005  (Continued)                      | 
|                                                     |  | Year of Expiration                                    |            |   |     
|                                                     |  |                                                       |            |   |     
|                                                     |  | 2006(b)                                               |            |   | 2007 |   |            | 2008 |  |   | 2009       |   |  | 2010 |            |   | 2011 |   |            | 2012 |  |   | 2013      |   |  | 2014 |           |   | 2015 |   |           | Thereafter(f) |  |   | Totals    |  
|                                                     |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |           |   |  |      |           |   |      |   |           |               |  |   |           |  
|                                                     |  | (Dollars in thousands except per square foot amounts) |           
|Austin                                               |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |           |   |  |      |           |   |      |   |           |               |  |   |           |   |  |   |           |   |  |   |           |   |  |   |             |  
|Square Feet(c)                                       |  |                                                       | 197,469    |   |      |   | 215,161    |      |  |   | 299,114    |   |  |      | 140,055    |   |      |   | 317,998    |      |  |   | 137,610   |   |  |      | 326,644   |   |      |   | 90,726    |               |  |   | 218,298   |   |  |   | 144,419   |   |  |   | 206,614   |   |  |   | 2,294,108   |  
|% Square Feet(d)                                     |  |                                                       | 6.9        | % |      |   | 7.5        | %    |  |   | 10.5       | % |  |      | 4.9        | % |      |   | 11.1       | %    |  |   | 4.8       | % |  |      | 11.4      | % |      |   | 3.2       | %             |  |   | 7.6       | % |  |   | 5.1       | % |  |   | 7.2       | % |  |   | 80.3        | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 4,716      |   |      | $ | 5,363      |      |  | $ | 7,473      |   |  | $    | 3,256      |   |      | $ | 6,455      |      |  | $ | 3,410     |   |  | $    | 9,456     |   |      | $ | 1,859     |               |  | $ | 5,797     |   |  | $ | 2,790     |   |  | $ | 5,673     |   |  | $ | 56,248      |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 23.88      |   |      | $ | 24.93      |      |  | $ | 24.98      |   |  | $    | 23.25      |   |      | $ | 20.30      |      |  | $ | 24.78     |   |  | $    | 28.95     |   |      | $ | 20.49     |               |  | $ | 26.56     |   |  | $ | 19.32     |   |  | $ | 27.46     |   |  | $ | 24.52       |  
|                                                    
|San Diego                                            |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |           |   |  |      |           |   |      |   |           |               |  |   |           |   |  |   |           |   |  |   |           |   |  |   |             |  
|Square Feet(c)                                       |  |                                                       | 376,184    |   |      |   | 155,157    |      |  |   | 251,580    |   |  |      | 479,250    |   |      |   | 421,652    |      |  |   | 186,827   |   |  |      | 16,431    |   |      |   |          |               |  |   | 10,052    |   |  |   | 130,647   |   |  |   | 36,602    |   |  |   | 2,064,382   |  
|% Square Feet(d)                                     |  |                                                       | 15.9       | % |      |   | 6.6        | %    |  |   | 10.6       | % |  |      | 20.3       | % |      |   | 17.8       | %    |  |   | 7.9       | % |  |      | 0.7       | % |      |   | 0.0       | %             |  |   | 0.4       | % |  |   | 5.5       | % |  |   | 1.5       | % |  |   | 87.3        | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 13,373     |   |      | $ | 5,063      |      |  | $ | 8,551      |   |  | $    | 12,726     |   |      | $ | 12,500     |      |  | $ | 5,934     |   |  | $    | 519       |   |      | $ | 0         |               |  | $ | 382       |   |  | $ | 3,398     |   |  | $ | 192       |   |  | $ | 62,638      |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 35.55      |   |      | $ | 32.63      |      |  | $ | 33.99      |   |  | $    | 26.55      |   |      | $ | 29.65      |      |  | $ | 31.76     |   |  | $    | 31.59     |   |      | $ | 0.00      |               |  | $ | 38.00     |   |  | $ | 26.01     |   |  | $ | 5.25      |   |  | $ | 30.34       |  
|                                                    
|All Others                                           |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |           |   |  |      |           |   |      |   |           |               |  |   |           |   |  |   |           |   |  |   |           |   |  |   |             |  
|Square Feet(c)                                       |  |                                                       | 968,887    |   |      |   | 378,800    |      |  |   | 931,323    |   |  |      | 710,996    |   |      |   | 451,404    |      |  |   | 147,109   |   |  |      | 246,438   |   |      |   | 77,833    |               |  |   | 141,857   |   |  |   | 163,503   |   |  |   | 625,450   |   |  |   | 4,843,600   |  
|% Square Feet(d)                                     |  |                                                       | 17.8       | % |      |   | 7.0        | %    |  |   | 17.1       | % |  |      | 13.1       | % |      |   | 8.3        | %    |  |   | 2.7       | % |  |      | 4.5       | % |      |   | 1.4       | %             |  |   | 2.6       | % |  |   | 3.0       | % |  |   | 11.5      | % |  |   | 89.0        | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 15,456     |   |      | $ | 7,814      |      |  | $ | 19,701     |   |  | $    | 17,327     |   |      | $ | 10,362     |      |  | $ | 3,790     |   |  | $    | 6,070     |   |      | $ | 1,791     |               |  | $ | 3,573     |   |  | $ | 3,623     |   |  | $ | 18,531    |   |  | $ | 108,038     |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 15.95      |   |      | $ | 20.63      |      |  | $ | 21.15      |   |  | $    | 24.37      |   |      | $ | 22.96      |      |  | $ | 25.76     |   |  | $    | 24.63     |   |      | $ | 23.01     |               |  | $ | 25.19     |   |  | $ | 22.16     |   |  | $ | 29.63     |   |  | $ | 22.31       |  
|                                                    
|Total Portfolio                                      |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |      |  |   |           |   |  |      |           |   |      |   |           |               |  |   |           |   |  |   |           |   |  |   |           |   |  |   |             |  
|Square Feet(c)                                       |  |                                                       | 12,898,261 |   |      |   | 11,923,721 |      |  |   | 13,772,154 |   |  |      | 12,920,412 |   |      |   | 14,111,152 |      |  |   | 7,568,301 |   |  |      | 6,638,550 |   |      |   | 5,450,360 |               |  |   | 4,481,023 |   |  |   | 4,701,979 |   |  |   | 6,420,161 |   |  |   | 100,886,074 |  
|% Square Feet(d)                                     |  |                                                       | 11.6       | % |      |   | 10.7       | %    |  |   | 12.4       | % |  |      | 11.6       | % |      |   | 12.7       | %    |  |   | 6.8       | % |  |      | 6.0       | % |      |   | 4.9       | %             |  |   | 4.0       | % |  |   | 4.2       | % |  |   | 5.8       | % |  |   | 90.5        | %
|Annualized Rent for occupied square feet(e)          |  | $                                                     | 380,611    |   |      | $ | 354,471    |      |  | $ | 391,967    |   |  | $    | 400,869    |   |      | $ | 432,917    |      |  | $ | 258,590   |   |  | $    | 224,610   |   |      | $ | 186,517   |               |  | $ | 130,078   |   |  | $ | 133,495   |   |  | $ | 218,705   |   |  | $ | 3,112,830   |  
|Annualized Rent per occupied square foot(e)          |  | $                                                     | 29.51      |   |      | $ | 29.73      |      |  | $ | 28.46      |   |  | $    | 31.03      |   |      | $ | 30.68      |      |  | $ | 34.17     |   |  | $    | 33.83     |   |      | $ | 34.22     |               |  | $ | 29.03     |   |  | $ | 28.39     |   |  | $ | 34.07     |   |  | $ | 30.85       |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Based on the contractual termination date of the lease without
    regard to any early lease termination and/or renewal options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(b) |  | 640,783 square feet expiring in 2006 is from month to month
    leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(c) |  | Represents occupied square feet of expiring leases as of the
    reporting date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(d) |  | Represents occupied square feet of expiring leases in the market
    divided by the markets total building square feet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(e) |  | Annualized rent is the monthly contractual rent as of the
    reporting date under existing leases in which occupancy has
    commenced as of the reporting date multiplied by 12 months
    (Annualized Rent). If the current rent payable is $0
    (as a result of rent abatements), then the first monthly rent
    payment due under the existing lease is used to calculate
    annualized rent. The contractual rent amounts include total base
    rent and estimated expense reimbursements from tenants as of the
    reporting date before any adjustments for rent abatements and
    contractual increases or decreases in rent subsequent to
    December 31, 2005. Total rent abatements for leases in
    which occupancy has commenced as of the reporting date for the
    period from January 1, 2006 to December 31, 2006 are
    approximately $30.8 million. We believe Annualized Rent is
    a useful measure because this information can be used for
    comparison to current market rents as published by various third
    party sources.
|   
|(f) |  | EOP management offices and owner-building use space totaling
    796,991 square feet is included in square feet, however,
    the rent per square foot is $0.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

29



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##### Table of Contents






Item 3.     Legal
Proceedings.







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




30



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##### Table of Contents






PART II







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



|     |  |         |        |  |      |   |       |     |  |   |       |  |  |               |       |  |  |   |      | 
|---- |  | ------- | ------ |  | ---- | - | ----- | --- |  | - | ----- |  |  | ------------- | ----- |  |  | - | ---- | 
|Year |  | Quarter |        |  | High |   |       | Low |  |   | Close |  |  | Distributions |      
|     |  |         |        |  |      |   |       |     |  |   |       |  |  |               |      
|2005 |  |         | Fourth |  |      | $ | 33.17 |     |  | $ | 28.20 |  |  | $             | 30.33 |  |  | $ | 0.50 | 
|     |  |         | Third  |  |      | $ | 35.79 |     |  | $ | 31.31 |  |  | $             | 32.71 |  |  | $ | 0.50 | 
|     |  |         | Second |  |      | $ | 34.39 |     |  | $ | 30.00 |  |  | $             | 33.10 |  |  | $ | 0.50 | 
|     |  |         | First  |  |      | $ | 31.17 |     |  | $ | 27.45 |  |  | $             | 30.13 |  |  | $ | 0.50 | 
|2004 |  |         | Fourth |  |      | $ | 29.86 |     |  | $ | 27.11 |  |  | $             | 29.12 |  |  | $ | 0.50 | 
|     |  |         | Third  |  |      | $ | 28.95 |     |  | $ | 25.71 |  |  | $             | 27.25 |  |  | $ | 0.50 | 
|     |  |         | Second |  |      | $ | 29.20 |     |  | $ | 23.90 |  |  | $             | 27.20 |  |  | $ | 0.50 | 
|     |  |         | First  |  |      | $ | 30.39 |     |  | $ | 27.81 |  |  | $             | 28.89 |  |  | $ | 0.50 | 



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Recent Sales of Unregistered Securities; Use of Proceeds
    from Registered Securities



|                |                     |                     |            |            |                   |                     |       |                 |                  |  |                 |            |  |   |             |  | 
|--------------- | ------------------- | ------------------- | ---------- | ---------- | ----------------- | ------------------- | ----- | --------------- | ---------------- |  | --------------- | ---------- |  | - | ----------- |  | 
|                |                     |                     |            |            |                   | Total Number of     |       |                 | Dollar Value of  | 
|                |                     |                     |            |            |                   | Shares Purchased    |       |                 | Shares that May  | 
|                |                     |                     |            |            |                   | as Part of Publicly |       |                 | Yet be Purchased | 
|                |                     | Total Number of     |            |            | Average Price     |                     |       | Announced Plans |                  |  | Under the Plans |           
|Period          |                     | Shares Purchased(a) |            |            | Paid per Share(a) |                     |       | or Programs(a)  |                  |  | or Programs(b)  |           
|                |                     |                     |            |            |                   |                     |       |                 |                  |  |                 |           
|October 1 - 31  |                     |                     | 2,364,195  |            |                   | $                   | 32.48 |                 |                  |  | 2,364,195       |            |  | $ | 330,819,258 | 
|November 1 - 30 |                     |                     | 14,101,100 |            |                   |                     | 29.84 |                 |                  |  | 14,101,100      |            |  | $ | 410,916,424 | 
|December 1 - 31 |                     |                     | 11,541,208 |            |                   |                     | 30.77 |                 |                  |  | 11,541,208      |            |  | $ | 557,348,995 | 
|                |                     |                     |            |            |                   |                     |       |                 |                  |  |                 |           
|                | Fourth quarter 2005 |                     |            | 28,006,503 |                   |                     | $     | 30.45           |                  |  |                 | 28,006,503 |  |   |             |  | 
|                |                     |                     |            |            |                   |                     |       |                 |                  |  |                 |           






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Of the Common Shares repurchased during the fourth quarter of
    2005, 27,953,100 represent Common Shares repurchased under our
    open market repurchase program and 26,338 represent Common
    Shares repurchased under our SERP. In addition, 17,064 represent
    Common Shares repurchased in the open market to fund Common
    Shares purchased under our 1997 Employee Share Purchase Plan and
    8,869 represent Common Shares repurchased in the open market to
    fund fees paid in Common Shares to each of our nonemployee
    trustees, except Mr. Zell. The remaining 1,132 Common
    Shares repurchased represent Common Shares surrendered to Equity
    Office to satisfy tax withholding obligations in connection with
    the vesting of restricted stock.
|   
|(b) |  | This dollar value relates to the $2.1 billion open market
    repurchase program only. The number of Common Shares that may
    yet be repurchased in the open market to fund shares purchased
    under our                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

31



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| |  |                                                                                                                                                   
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 1997 Employee Share Purchase Plan, as amended, was 1,358,224 at
    October 31, 2005 and November 30, 2005 and 1,341,160
    at December 31, 2005.





| |                                                                       
| | ----------------------------------------------------------------------
| | Securities Authorized for Issuance Under Equity
    Compensation Plans






Item 6.     Selected Financial
Data.




|                                                                                                           |  |                                                  |           |   |      |   |           |      |  |   |           |   |  |         |           |  |  |   |           |  
|---------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------ | --------- | - | ---- | - | --------- | ---- |  | - | --------- | - |  | ------- | --------- |  |  | - | --------- | -
|                                                                                                           |  | For the years ended December 31,                 |          
|                                                                                                           |  |                                                  |          
|                                                                                                           |  | 2005                                             |           |   | 2004 |   |           | 2003 |  |   | 2002      |   |  | 2001(a) |          
|                                                                                                           |  |                                                  |           |   |      |   |           |      |  |   |           |   |  |         |          
|                                                                                                           |  | (Dollars in thousands, except per share amounts) |          
|Selected Financial Data:                                                                                   |  |                                                  |           |   |      |   |           |      |  |   |           |   |  |         |           |  |  |   |           |  
|Total revenues                                                                                             |  | $                                                | 3,000,589 |   |      | $ | 2,874,032 |      |  | $ | 2,825,820 |   |  | $       | 2,889,715 |  |  | $ | 2,585,550 |  
|Income from early lease terminations(b)                                                                    |  | $                                                | 80,028    |   |      | $ | 58,689    |      |  | $ | 68,408    |   |  | $       | 151,969   |  |  | $ | 41,230    |  
|Property net operating income from continuing operations(c)                                                |  | $                                                | 1,801,538 |   |      | $ | 1,802,422 |      |  | $ | 1,816,361 |   |  | $       | 1,856,352 |  |  | $ | 1,683,060 |  
|Income from continuing operations                                                                          |  | $                                                | 203,894   |   |      | $ | 253,811   |      |  | $ | 430,603   |   |  | $       | 442,539   |  |  | $ | 399,713   |  
|Net gain on sales of real estate and provision for loss on
    assets held for sale(d)                     |  | $                                                | 21,026    |   |      | $ | 27,160    |      |  | $ | 168,126   |   |  | $       | 18,354    |  |  | $ | 81,662    |  
|Impairment(b)                                                                                              |  | $                                                | (219,003  | ) |      | $ | (229,170  | )    |  | $ | (7,500    | ) |  | $       |          |  |  | $ | (135,220  | )
|Cumulative effect of a change in accounting principle                                                      |  | $                                                |          |   |      | $ | (33,697   | )    |  | $ |          |   |  | $       |          |  |  | $ | (1,142    | )
|Net income                                                                                                 |  | $                                                | 42,939    |   |      | $ | 137,307   |      |  | $ | 655,062   |   |  | $       | 770,215   |  |  | $ | 618,182   |  
|Net income available to common shareholders                                                                |  | $                                                | 8,136     |   |      | $ | 98,214    |      |  | $ | 603,190   |   |  | $       | 707,642   |  |  | $ | 563,796   |  
|Funds from Operations available to common shareholders plus
    assumed conversions(e)                     |  | $                                                | 608,330   |   |      | $ | 931,687   |      |  | $ | 1,289,547 |   |  | $       | 1,520,268 |  |  | $ | 1,190,174 |  
|Income from continuing operations per share  diluted                                                      |  | $                                                | 0.38      |   |      | $ | 0.50      |      |  | $ | 1.00      |   |  | $       | 1.00      |  |  | $ | 1.02      |  
|Cumulative effect of a change in accounting principle per
    share  diluted                              |  | $                                                |          |   |      | $ | (0.07     | )    |  | $ |          |   |  | $       |          |  |  | $ |          |  
|Net income available to common shareholders per
    share  diluted                                        |  | $                                                | 0.02      |   |      | $ | 0.24      |      |  | $ | 1.50      |   |  | $       | 1.70      |  |  | $ | 1.55      |  
|Funds from Operations available to common shareholders plus
    assumed conversions per share  diluted(e) |  | $                                                | 1.35      |   |      | $ | 2.07      |      |  | $ | 2.80      |   |  | $       | 3.18      |  |  | $ | 2.83      |  
|Cash distributions declared per Common Share                                                               |  | $                                                | 2.00      |   |      | $ | 2.00      |      |  | $ | 2.00      |   |  | $       | 2.00      |  |  | $ | 1.90      |  

32



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|                                                  |                                                         |                                                  |            |       |      |   |            |       |   |   |            |       |   |         |            |       |   |   |            |       |  
|------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------------ | ---------- | ----- | ---- | - | ---------- | ----- | - | - | ---------- | ----- | - | ------- | ---------- | ----- | - | - | ---------- | ----- | -
|                                                  |                                                         | For the years ended December 31,                 |           
|                                                  |                                                         |                                                  |           
|                                                  |                                                         | 2005                                             |            |       | 2004 |   |            | 2003  |   |   | 2002       |       |   | 2001(a) |           
|                                                  |                                                         |                                                  |            |       |      |   |            |       |   |   |            |       |   |         |           
|                                                  |                                                         | (Dollars in thousands, except per share amounts) |           
|Balance Sheet Data (at end of year):              |                                                         |                                                  |            |       |      |   |            |       |   |   |            |       |   |         |            |       |   |   |            |      
|Total assets                                      |                                                         | $                                                | 22,973,553 |       |      | $ | 24,671,539 |       |   | $ | 24,189,010 |       |   | $       | 25,246,783 |       |   | $ | 25,808,422 |      
|Mortgage debt net of any discounts and premiums   |                                                         | $                                                | 2,164,198  |       |      | $ | 2,609,067  |       |   | $ | 2,315,889  |       |   | $       | 2,507,890  |       |   | $ | 2,650,338  |      
|Unsecured notes net of any premiums and discounts |                                                         | $                                                | 9,032,620  |       |      | $ | 9,652,392  |       |   | $ | 8,828,912  |       |   | $       | 9,057,651  |       |   | $ | 9,093,987  |      
|Lines of credit                                   |                                                         | $                                                | 1,631,000  |       |      | $ | 548,000    |       |   | $ | 334,000    |       |   | $       | 205,700    |       |   | $ | 244,300    |      
|Mandatorily Redeemable Preferred Shares           |                                                         | $                                                | 299,497    |       |      | $ | 299,500    |       |   | $ | 299,500    |       |   | $       | 299,500    |       |   | $ | 299,500    |      
|Other Data (at end of year):                      |                                                         |                                                  |            |       |      |   |            |       |   |   |            |       |   |         |            |       |   |   |            |      
|Effective Office Portfolio:                       |                                                         |                                                  |            |       |      |   |            |       |   |   |            |       |   |         |            |       |   |   |            |      
|                                                  | Number of office properties                             |                                                  |            | 622   |      |   |            | 698   |   |   |            | 684   |   |         |            | 734   |   |   |            | 774   |  
|                                                  | Rentable square feet of office properties (in millions) |                                                  |            | 101.7 |      |   |            | 115.3 |   |   |            | 113.6 |   |         |            | 119.6 |   |   |            | 122.0 |  
|                                                  | Occupancy of office properties                          |                                                  |            | 90.4  | %    |   |            | 87.5  | % |   |            | 85.9  | % |         |            | 88.4  | % |   |            | 91.6  | %






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | On July 2, 2001, we completed our acquisition by merger of
    Spieker Properties, Inc. (Spieker) at a cost of
    $7.2 billion. As a result, we acquired 391 office
    properties containing 28.3 million square feet and 98
    industrial properties containing 10.1 million square feet.                                                                                                                 
|   
|(b) |  | These amounts include continuing and discontinued operations and
    also include our share of unconsolidated joint ventures.                                                                                                                                                                                                                                                                                   
|   
|(c) |  | These amounts represent property operating revenues (which
    include rental revenues, tenant reimbursements, parking and
    other operating revenues) less property operating expenses
    (which include real estate taxes, insurance, repairs and
    maintenance and property operating expense). See
    Item 8  Note 19 on why we present property
    net operating income from continuing operations.
|   
|(d) |  | These amounts include continuing and discontinued operations
    after allocations to minority interest partners and also include
    our share of unconsolidated joint ventures.                                                                                                                                                                                                                               
|   
|(e) |  | Refer to Item 7 for information regarding why we present
    funds from operations and for a reconciliation of this non-GAAP
    financial measure to net income.                                                                                                                                                                                                                                               

33



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

Overview




I.     Executive Summary


A description of our business as well as key factors and
trends that affect our business.


II.     Results of Operations


Period-to


III.     Liquidity and Capital
Resources




| |                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A discussion of our liquidity and capital resources,
    including distributions to our shareholders and unitholders,
    contractual obligations, debt financing, market risk, equity
    securities, capital improvements, tenant improvements and
    leasing costs, developments, cash flows and additional items for
    2005.

IV.     Critical Accounting Policies
and Estimates




| |                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------
| | A review of the critical accounting policies and estimates
    that affect the financial statements and impact of new
    accounting standards.

V.     Funds From Operations




| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | A reconciliation of this non-GAAP financial measure to net
    income, the most directly comparable GAAP measure.

I.     Executive Summary


10-K








































34



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| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | the economic environment;                                                 
|
| |  | our investment activity and our use of the proceeds from
    dispositions;
|
| |  | our liquidity and capital resources; and                                  
|
| |  | our operating and leasing results.                                        



| |                     
| | --------------------
| | Economic Environment









| |                    
| | -------------------
| | Investment Activity



35



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| |                                
| | -------------------------------
| | Liquidity and Capital Resources





| |                              
| | -----------------------------
| | Operating and Leasing Results



| |                           
| | --------------------------
| | Operating Results for 2005



36



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##### Table of Contents







| |                
| | ---------------
| | Leasing Results



| |          
| | ---------
| | Occupancy





| |                         
| | ------------------------
| | Early Lease Terminations





| |             
| | ------------
| | Rental Rates





| |                                      
| | -------------------------------------
| | Tenant Improvements and Leasing Costs



37



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| |                                                                        
| | -----------------------------------------------------------------------
| | Trends in Occupancy and Rental Rates for the Total Office
    Portfolio



|                                                 |                                                                                                                                                  |                                                                |  |            |        |    |  |            |        |    |  |            |        |   
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------- |  | ---------- | ------ | -- |  | ---------- | ------ | -- |  | ---------- | ------ | --
|                                                 |                                                                                                                                                  | For the years ended December 31,                               | 
|                                                 |                                                                                                                                                  |                                                                | 
|                                                 |                                                                                                                                                  | 2005                                                           |  |            | 2004   |    |  | 2003       |       
|                                                 |                                                                                                                                                  |                                                                |  |            |        |    |  |            |       
|Office Property Data for Total Office Portfolio: |                                                                                                                                                  |                                                                |  |            |        |    |  |            |        |    |  |           
|                                                 | Occupancy at end of year                                                                                                                         |                                                                |  | 90.5       | %      |    |  | 87.7       | %      |    |  | 86.3       | %     
|                                                 | Gross square footage for tenants whose lease term commenced
    during the year                                                                  |                                                                |  | 21,219,691 |        |    |  | 22,015,441 |        |    |  | 22,684,488 |       
|                                                 | Weighted average annual rent per square foot for tenants whose
    lease term commenced during the year:                                         |                                                                |  |            |        |    |  |            |        |    |  |            |       
|                                                 |                                                                                                                                                  | GAAP basis(a,b)                                                |  |            | $26.60 |    |  |            | $24.10 |    |  |            | $25.68 |   
|                                                 |                                                                                                                                                  | Cash basis(b,c)                                                |  |            | $25.55 |    |  |            | $23.38 |    |  |            | $24.86 |   
|                                                 | Gross square footage for expiring and terminated leases during
    the year                                                                      |                                                                |  | 19,235,670 |        |    |  | 20,381,369 |        |    |  | 23,976,592 |       
|                                                 | Weighted average annual rent per square foot for expiring and
    terminated leases during the year:                                             |                                                                |  |            |        |    |  |            |        |    |  |            |       
|                                                 |                                                                                                                                                  | GAAP basis(a)                                                  |  |            | $29.01 |    |  |            | $27.14 |    |  |            | $28.14 |   
|                                                 |                                                                                                                                                  | Cash basis(c)                                                  |  |            | $29.88 |    |  |            | $27.94 |    |  |            | $28.55 |   
|                                                 | Change in weighted average annual rent per square foot between
    expiring and terminated leases and leases that commenced during
    the year: |                                                                |  |            |        |    |  |            |        |    |  |            |       
|                                                 |                                                                                                                                                  | GAAP basis  change in annual rent per square foot             |  |            | $(2.41 | )  |  |            | $(3.04 | )  |  |            | $(2.46 | ) 
|                                                 |                                                                                                                                                  | GAAP basis  percent change in annual rent per square
    foot |  |            | (8.3   | )% |  |            | (11.2  | )% |  |            | (8.7   | )%
|                                                 |                                                                                                                                                  | Cash basis  change in annual rent per square foot             |  |            | $(4.33 | )  |  |            | $(4.56 | )  |  |            | $(3.69 | ) 
|                                                 |                                                                                                                                                  | Cash basis  percent change in annual rent per square
    foot |  |            | (14.5  | )% |  |            | (16.3  | )% |  |            | (12.9  | )%






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Based on the average annual base rent per square foot over the
    lease term and current estimated tenant reimbursements, if any.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(b) |  | Weighted average annual rent per square foot for new leases for
    tenants whose lease term commenced during the period may lag the
    market because leasing decisions typically are made one month to
    12 or more months prior to taking occupancy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(c) |  | Based on the monthly contractual rent when the lease commenced,
    expired or terminated multiplied by 12 months. For new and
    renewal leases, if the monthly contractual rent when the lease
    commenced is $0 (as a result of rent abatements), then the
    rental rate represents the first monthly rent payment due
    multiplied by 12 months (Annualized Cash Rent).
    The contractual rent amounts include total base rent and
    estimated expense reimbursements from tenants before any
    adjustments for rent abatements and contractual increases or
    decreases in rent. We believe Annualized Cash Rent is a useful
    measure because this information can be used for comparison to
    current market rents as published by various third party sources.

II.     Results of Operations


Period-to


period-to period-to


38



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|                        |                   |                                    |  |             |                        |   |  |                            |             |   |  |             |             |  
|----------------------- | ----------------- | ---------------------------------- |  | ----------- | ---------------------- | - |  | -------------------------- | ----------- | - |  | ----------- | ----------- | -
|                        |                   |                                    |  | Square Feet |                       
|                        |                   |                                    |  |             |                       
|                        |                   | Buildings                          |  |             | Total Office Portfolio |   |  | Effective Office Portfolio |            
|                        |                   |                                    |  |             |                        |   |  |                            |            
|Properties owned as of: |                   |                                    |  |             |                        |   |  |                            |             |   |  |            
|                        | December 31, 2002 |                                    |  | 734         |                        |   |  | 125,725,399                |             |   |  | 119,625,725 |            
|                        |                   | Acquisitions                       |  |             | 2                      |   |  |                            | 829,293     |   |  |             | 923,879     |  
|                        |                   | Developments placed in service     |  |             | 5                      |   |  |                            | 1,218,215   |   |  |             | 989,307     |  
|                        |                   | Dispositions                       |  |             | (53                    | ) |  |                            | (5,182,707  | ) |  |             | (7,543,381  | )
|                        |                   | Properties taken out of service(a) |  |             | (4                     | ) |  |                            | (450,548    | ) |  |             | (450,548    | )
|                        |                   | Building remeasurements            |  |             |                       |   |  |                            | 115,273     |   |  |             | 96,135      |  
|                        |                   |                                    |  |             |                        |   |  |                            |            
|                        | December 31, 2003 |                                    |  | 684         |                        |   |  | 122,254,925                |             |   |  | 113,641,117 |            
|                        |                   | Consolidation of SunAmerica Center |  |             | 1                      |   |  |                            | 780,063     |   |  |             | 524,772     |  
|                        |                   | Acquisitions                       |  |             | 27                     |   |  |                            | 3,315,232   |   |  |             | 3,104,028   |  
|                        |                   | Developments placed in service     |  |             | 2                      |   |  |                            | 298,689     |   |  |             | 298,689     |  
|                        |                   | Dispositions                       |  |             | (5                     | ) |  |                            | (567,765    | ) |  |             | (1,922,755  | )
|                        |                   | Properties taken out of service(a) |  |             | (11                    | ) |  |                            | (469,771    | ) |  |             | (469,771    | )
|                        |                   | Building remeasurements            |  |             |                       |   |  |                            | 101,872     |   |  |             | 103,663     |  
|                        |                   |                                    |  |             |                        |   |  |                            |            
|                        | December 31, 2004 |                                    |  | 698         |                        |   |  | 125,713,245                |             |   |  | 115,279,743 |            
|                        |                   | Acquisitions                       |  |             | 55                     |   |  |                            | 3,959,956   |   |  |             | 3,959,956   |  
|                        |                   | Developments placed in service     |  |             | 1                      |   |  |                            | 115,340     |   |  |             | 115,340     |  
|                        |                   | Dispositions                       |  |             | (131                   | ) |  |                            | (18,275,376 | ) |  |             | (17,644,205 | )
|                        |                   | Properties taken out of service(a) |  |             | (1                     | ) |  |                            | (61,825     | ) |  |             | (61,825     | )
|                        |                   | Building remeasurements            |  |             |                       |   |  |                            | 57,713      |   |  |             | 59,282      |  
|                        |                   |                                    |  |             |                        |   |  |                            |            
|                        | December 31, 2005 |                                    |  | 622         |                        |   |  | 111,509,053                |             |   |  | 101,708,291 |            
|                        |                   |                                    |  |             |                        |   |  |                            |            






|    |  |                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Properties taken out of service represent office properties we
    are no longer attempting to lease and may be sold in the future
    or redeveloped.



39



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##### Table of Contents



Comparison of the year ended December 31, 2005 to the
year ended December 31, 2004




|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |           |           |           |          |         |          |          |       |        |      |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ---------------------------- | ---------------- | ----------------------- | -------------------- | ------- | ------- | --------- | ----------------------- | --------- | -------- | ------- | -------- | -------- | ----- | ------ | ----- | ----- | ------- | --------- | --------- | ------- | ------- | --------- | --------- | --------- | -------- | ------- | -------- | -------- | ----- | ------ | ---- | ----- | -
|                                                                                                                                                                |                                                | Total Company                |                  |                         | Same Store Portfolio |        
|                                                                                                                                                                |                                                |                              |                  |                         |                      |        
|                                                                                                                                                                |                                                |                              |                  | Change                  |                      |         |         |           | Change                  |          
|                                                                                                                                                                |                                                |                              |                  | Favorable/(Unfavorable) |                      |         |         |           | Favorable/(Unfavorable) |          
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |          
|                                                                                                                                                                |                                                | 2005                         |                  |                         | 2004                 |         |         | Amount    |                         |           | %        |         |          | 2005     |       |        | 2004  |       |         | Amount    |           |         | %       |          
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|                                                                                                                                                                |                                                | (Dollars in thousands)       |                 
|Revenues:                                                                                                                                                       |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |           |           |           |          |         |          |          |       |       
|                                                                                                                                                                | Property operating revenues                    |                              | $                | 2,982,849               |                      |         | $       | 2,859,806 |                         |           | $        | 123,043 |          |          |       | 4.3    | %     |       | $       | 2,686,357 |           |         | $       | 2,670,325 |           |           | $        | 16,032  |          |          |       | 0.6    | %   
|                                                                                                                                                                | Fee income                                     |                              |                  | 17,740                  |                      |         |         | 14,226    |                         |           |          | 3,514   |          |          |       | 24.7   |       |       |         |          |           |         |         |          |           |           |          |        |          |          |       |       |     
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|                                                                                                                                                                |                                                | Total revenues               |                  |                         | 3,000,589            |         |         |           | 2,874,032               |           |          |         | 126,557  |          |       |        | 4.4   |       |         |           | 2,686,357 |         |         |           | 2,670,325 |           |          |         | 16,032   |          |       |        | 0.6  |      
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Expenses:                                                                                                                                                       |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |           |           |           |          |         |          |          |       |       
|                                                                                                                                                                | Depreciation and amortization                  |                              |                  | 749,765                 |                      |         |         | 687,702   |                         |           |          | (62,063 | )        |          |       | (9.0   | )     |       |         | 662,331   |           |         |         | 633,236   |           |           |          | (29,095 | )        |          |       | (4.6   | )   
|                                                                                                                                                                | Real estate taxes                              |                              |                  | 339,006                 |                      |         |         | 324,481   |                         |           |          | (14,525 | )        |          |       | (4.5   | )     |       |         | 292,987   |           |         |         | 294,605   |           |           |          | 1,618   |          |          |       | 0.5    |     
|                                                                                                                                                                | Insurance                                      |                              |                  | 59,567                  |                      |         |         | 29,521    |                         |           |          | (30,046 | )        |          |       | (101.8 | )     |       |         | 56,241    |           |         |         | 27,163    |           |           |          | (29,078 | )        |          |       | (107.1 | )   
|                                                                                                                                                                | Repairs and maintenance                        |                              |                  | 340,904                 |                      |         |         | 312,928   |                         |           |          | (27,976 | )        |          |       | (8.9   | )     |       |         | 315,192   |           |         |         | 291,207   |           |           |          | (23,985 | )        |          |       | (8.2   | )   
|                                                                                                                                                                | Property operating                             |                              |                  | 441,834                 |                      |         |         | 390,454   |                         |           |          | (51,380 | )        |          |       | (13.2  | )     |       |         | 410,568   |           |         |         | 371,836   |           |           |          | (38,732 | )        |          |       | (10.4  | )   
|                                                                                                                                                                | Ground rent                                    |                              |                  | 22,517                  |                      |         |         | 20,912    |                         |           |          | (1,605  | )        |          |       | (7.7   | )     |       |         | 21,620    |           |         |         | 20,623    |           |           |          | (997    | )        |          |       | (4.8   | )   
|                                                                                                                                                                | Corporate general and administrative(a)        |                              |                  | 66,536                  |                      |         |         | 52,242    |                         |           |          | (14,294 | )        |          |       | (27.4  | )     |       |         |          |           |         |         |          |           |           |          |        |          |          |       |       |     
|                                                                                                                                                                | Impairment                                     |                              |                  | 65,738                  |                      |         |         | 38,534    |                         |           |          | (27,204 | )        |          |       | (70.6  | )     |       |         | 44,294    |           |         |         | 14,705    |           |           |          | (29,589 | )        |          |       | (201.2 | )   
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|                                                                                                                                                                |                                                | Total expenses               |                  |                         | 2,085,867            |         |         |           | 1,856,774               |           |          |         | (229,093 | )        |       |        | (12.3 | )     |         |           | 1,803,233 |         |         |           | 1,653,375 |           |          |         | (149,858 | )        |       |        | (9.1 | )    
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|                                                                                                                                                                |                                                |                              | Operating income |                         |                      | 914,722 |         |           |                         | 1,017,258 |          |         |          | (102,536 | )     |        |       | (10.1 | )       |           |           | 883,124 |         |           |           | 1,016,950 |          |         |          | (133,826 | )     |        |      | (13.2 | )
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Other income (expense):                                                                                                                                         |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |           |           |           |          |         |          |          |       |       
|                                                                                                                                                                | Interest and dividend income                   |                              |                  | 15,896                  |                      |         |         | 8,041     |                         |           |          | 7,855   |          |          |       | 97.7   |       |       |         | 5,005     |           |         |         | 3,132     |           |           |          | 1,873   |          |          |       | 59.8   |     
|                                                                                                                                                                | Realized gain on sale of marketable securities |                              |                  | 157                     |                      |         |         | 28,976    |                         |           |          | (28,819 | )        |          |       | (99.5  | )     |       |         |          |           |         |         |          |           |           |          |        |          |          |       |       |     
|                                                                                                                                                                | Interest expense(b)                            |                              |                  | (831,725                | )                    |         |         | (848,677  | )                       |           |          | 16,952  |          |          |       | 2.0    |       |       |         | (149,451  | )         |         |         | (176,595  | )         |           |          | 27,144  |          |          |       | 15.4   |     
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|                                                                                                                                                                |                                                | Total other income (expense) |                  |                         | (815,672             | )       |         |           | (811,660                | )         |          |         | (4,012   | )        |       |        | (0.5  | )     |         |           | (144,446  | )       |         |           | (173,463  | )         |          |         | 29,017   |          |       |        | 16.7 |      
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate |                                                |                              | 99,050           |                         |                      |         | 205,598 |           |                         |           | (106,548 | )       |          |          | (51.8 | )      |       |       | 738,678 |           |           |         | 843,487 |           |           |           | (104,809 | )       |          |          | (12.4 | )     
|Income taxes                                                                                                                                                    |                                                |                              | 272              |                         |                      |         | (1,981  | )         |                         |           | 2,253    |         |          |          | 113.7 |        |       |       | (373    | )         |           |         | (325    | )         |           |           | (48      | )       |          |          | (14.8 | )     
|Minority interests:                                                                                                                                             |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |           |           |           |          |         |          |          |       |       
|                                                                                                                                                                | EOP Partnership                                |                              |                  | (907                    | )                    |         |         | (11,747   | )                       |           |          | 10,840  |          |          |       | 92.3   |       |       |         |          |           |         |         |          |           |           |          |        |          |          |       |       |     
|                                                                                                                                                                | Partially owned properties                     |                              |                  | (9,825                  | )                    |         |         | (10,264   | )                       |           |          | 439     |          |          |       | 4.3    |       |       |         | (9,825    | )         |         |         | (10,263   | )         |           |          | 438     |          |          |       | 4.3    |     
|Income from investments in unconsolidated joint ventures                                                                                                        |                                                |                              | 68,996           |                         |                      |         | 50,304  |           |                         |           | 18,692   |         |          |          | 37.2  |        |       |       | 32,674  |           |           |         | 39,827  |           |           |           | (7,153   | )       |          |          | (18.0 | )     
|Gain on sales of real estate                                                                                                                                    |                                                |                              | 46,308           |                         |                      |         | 21,901  |           |                         |           | 24,407   |         |          |          | 111.4 |        |       |       |        |           |           |         |        |           |           |           |         |         |          |          |      |       
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Income from continuing operations                                                                                                                               |                                                |                              | 203,894          |                         |                      |         | 253,811 |           |                         |           | (49,917  | )       |          |          | (19.7 | )      |       |       | 761,154 |           |           |         | 872,726 |           |           |           | (111,572 | )       |          |          | (12.8 | )     
|Discontinued operations                                                                                                                                         |                                                |                              | (160,955         | )                       |                      |         | (82,807 | )         |                         |           | (78,148  | )       |          |          | (94.4 | )      |       |       |        |           |           |         |        |           |           |           |         |         |          |          |      |       
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Income before cumulative effect of a change in accounting
    principle                                                                                         |                                                |                              | 42,939           |                         |                      |         | 171,004 |           |                         |           | (128,065 | )       |          |          | (74.9 | )      |       |       |        |           |           |         |        |           |           |           |         |         |          |          |      |       
|Cumulative effect of a change in accounting principle                                                                                                           |                                                |                              |                 |                         |                      |         | (33,697 | )         |                         |           | 33,697   |         |          |          | 100.0 |        |       |       |        |           |           |         |        |           |           |           |         |         |          |          |      |       
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Net income                                                                                                                                                      |                                                | $                            | 42,939           |                         |                      | $       | 137,307 |           |                         | $         | (94,368  | )       |          |          | (68.7 | )%     |       | $     | 761,154 |           |           | $       | 872,726 |           |           | $         | (111,572 | )       |          |          | (12.8 | )%    
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          
|Selected Items from Continuing Operations:                                                                                                                      |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |           |           |           |          |         |          |          |       |       
|                                                                                                                                                                | Property net operating income(c)               |                              | $                | 1,801,538               |                      |         | $       | 1,802,422 |                         |           | $        | (884    | )        |          |       | (0.0   | )%    |       | $       | 1,611,369 |           |         | $       | 1,685,514 |           |           | $        | (74,145 | )        |          |       | (4.4   | )%  
|                                                                                                                                                                |                                                |                              |                  |                         |                      |         |         |           |                         |           |          |         |          |          |       |        |       |       |         |           |           |         |         |          

40



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##### Table of Contents



|                                     |  |                        |        |                         |                      |   |        |        |                         |   |         |   |  |      |       |    |      |   |        |        |  |   |        |   |  |   |         |   |  |  |       |   
|------------------------------------ |  | ---------------------- | ------ | ----------------------- | -------------------- | - | ------ | ------ | ----------------------- | - | ------- | - |  | ---- | ----- | -- | ---- | - | ------ | ------ |  | - | ------ | - |  | - | ------- | - |  |  | ----- | --
|                                     |  | Total Company          |        |                         | Same Store Portfolio |  
|                                     |  |                        |        |                         |                      |  
|                                     |  |                        |        | Change                  |                      |   |        |        | Change                  |  
|                                     |  |                        |        | Favorable/(Unfavorable) |                      |   |        |        | Favorable/(Unfavorable) |  
|                                     |  |                        |        |                         |                      |   |        |        |                         |  
|                                     |  | 2005                   |        |                         | 2004                 |   |        | Amount |                         |   | %       |   |  | 2005 |       |    | 2004 |   |        | Amount |  |   | %      |  
|                                     |  |                        |        |                         |                      |   |        |        |                         |   |         |   |  |      |       |    |      |   |        |        |  |   |        |  
|                                     |  | (Dollars in thousands) |       
|Property operating margin(c,d)       |  |                        | 60.4   | %                       |                      |   | 63.0   | %      |                         |   |         |   |  |      | (2.6  | )% |      |   | 60.0   | %      |  |   | 63.1   | % |  |   |         |   |  |  | (3.1  | )%
|                                     |  |                        |        |                         |                      |   |        |        |                         |   |         |   |  |      |       |    |      |   |        |        |  |   |        |  
|                                     |  | $                      | 57,232 |                         |                      | $ | 73,104 |        |                         | $ | (15,872 | ) |  |      | (21.7 | )% |      | $ | 36,118 |        |  | $ | 65,355 |   |  | $ | (29,237 | ) |  |  | (44.7 | )%
|Deferred rental revenue              |  |                        |        |                         |                      |   |        |        |                         |   |         |   |  |      |       |    |      |   |        |        |  |   |        |   |  |   |         |   |  |  |       |   
|                                     |  |                        |        |                         |                      |   |        |        |                         |   |         |   |  |      |       |    |      |   |        |        |  |   |        |  
|Income from early lease terminations |  | $                      | 78,757 |                         |                      | $ | 48,056 |        |                         | $ | 30,701  |   |  |      | 63.9  | %  |      | $ | 24,634 |        |  | $ | 37,464 |   |  | $ | (12,830 | ) |  |  | (34.2 | )%
|                                     |  |                        |        |                         |                      |   |        |        |                         |   |         |   |  |      |       |    |      |   |        |        |  |   |        |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate general and administrative expense is not allocated to
    the Same Store Portfolio because these expenses are not directly
    incurred in connection with any specific property.                                                                                                                                                                                                                                                                                        
|   
|(b) |  | Interest expense (including amortization of deferred financing
    costs and prepayment expenses) for the Same Store Portfolio
    represents interest expense on mortgage debt and does not
    include interest expense on the unsecured notes or the lines of
    credit.                                                                                                                                                                                                        
|   
|(c) |  | Property net operating income consists of property operating
    revenues minus property operating expenses. Included in property
    operating revenues are rental revenue, tenant reimbursements,
    parking and other income, which includes income from early lease
    terminations. Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses. See Item 8  Note 19 for
    more information.
|   
|(d) |  | Property operating margin is determined by dividing property
    operating revenues less property operating expenses by property
    operating revenues.                                                                                                                                                                                                                                                                                                                            

Property Operating Revenues






Depreciation and Amortization






41



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##### Table of Contents



Real Estate Taxes






Insurance




Repairs and Maintenance






Property Operating






Corporate General and Administrative Expenses




42



---



##### Table of Contents



Impairment




Interest and Dividend Income




Realized Gain on Sale of Marketable Securities




Interest Expense






Income from Investments in Unconsolidated Joint Ventures






Gain on Sales of Real Estate


Accounting for the Impairment and Disposal of Long-Lived
Assets


Discontinued Operations




Cumulative Effect of a Change in Accounting Principle


Consolidation of Variable Interest
Entities


43



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##### Table of Contents



Comparison of the year ended December 31, 2004 to the
year ended December 31, 2003




|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |           |           |           |          |          |          |          |       |          |       |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ---------------------------- | ---------------- | ----------------- | -------------------- | --------- | ------- | --------- | ----------------- | --------- | -------- | ------- | -------- | -------- | ------ | ----- | ---- | ----- | ------- | --------- | --------- | ------- | --------- | --------- | --------- | --------- | -------- | -------- | -------- | -------- | ----- | -------- | ----- | ----- | -
|                                                                                                                                                                |                                                                                  | Total Company                |                  |                   | Same Store Portfolio |          
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |          
|                                                                                                                                                                |                                                                                  |                              |                  | Change Favorable/ |                      |           |         |           | Change Favorable/ |          
|                                                                                                                                                                |                                                                                  |                              |                  | (Unfavorable)     |                      |           |         |           | (Unfavorable)     |          
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |          
|                                                                                                                                                                |                                                                                  | 2004                         |                  |                   | 2003                 |           |         | Amount    |                   |           | %        |         |          | 2004     |        |       | 2003 |       |         | Amount    |           |         | %         |          
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|                                                                                                                                                                |                                                                                  | (Dollars in thousands)       |                 
|Revenues:                                                                                                                                                       |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |           |           |           |          |          |          |          |       |         
|                                                                                                                                                                | Property operating revenues                                                      |                              | $                | 2,859,806         |                      |           | $       | 2,809,959 |                   |           | $        | 49,847  |          |          |        | 1.8   | %    |       | $       | 2,884,776 |           |         | $         | 2,952,670 |           |           | $        | (67,894  | )        |          |       | (2.3     | )%   
|                                                                                                                                                                | Fee income                                                                       |                              |                  | 14,226            |                      |           |         | 15,861    |                   |           |          | (1,635  | )        |          |        | (10.3 | )    |       |         |          |           |         |           |          |           |           |          |         |          |          |       |         |      
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|                                                                                                                                                                |                                                                                  | Total revenues               |                  |                   | 2,874,032            |           |         |           | 2,825,820         |           |          |         | 48,212   |          |        |       | 1.7  |       |         |           | 2,884,776 |         |           |           | 2,952,670 |           |          |          | (67,894  | )        |       |          | (2.3  | )    
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|Expenses:                                                                                                                                                       |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |           |           |           |          |          |          |          |       |         
|                                                                                                                                                                | Depreciation and amortization                                                    |                              |                  | 687,702           |                      |           |         | 617,461   |                   |           |          | (70,241 | )        |          |        | (11.4 | )    |       |         | 697,176   |           |         |           | 645,802   |           |           |          | (51,374  | )        |          |       | (8.0     | )    
|                                                                                                                                                                | Real estate taxes                                                                |                              |                  | 324,481           |                      |           |         | 305,588   |                   |           |          | (18,893 | )        |          |        | (6.2  | )    |       |         | 329,462   |           |         |           | 319,870   |           |           |          | (9,592   | )        |          |       | (3.0     | )    
|                                                                                                                                                                | Insurance                                                                        |                              |                  | 29,521            |                      |           |         | 19,846    |                   |           |          | (9,675  | )        |          |        | (48.8 | )    |       |         | 33,429    |           |         |           | 24,818    |           |           |          | (8,611   | )        |          |       | (34.7    | )    
|                                                                                                                                                                | Repairs and maintenance                                                          |                              |                  | 312,928           |                      |           |         | 297,677   |                   |           |          | (15,251 | )        |          |        | (5.1  | )    |       |         | 319,347   |           |         |           | 312,385   |           |           |          | (6,962   | )        |          |       | (2.2     | )    
|                                                                                                                                                                | Property operating                                                               |                              |                  | 390,454           |                      |           |         | 370,487   |                   |           |          | (19,967 | )        |          |        | (5.4  | )    |       |         | 398,030   |           |         |           | 388,473   |           |           |          | (9,557   | )        |          |       | (2.5     | )    
|                                                                                                                                                                | Ground rent                                                                      |                              |                  | 20,912            |                      |           |         | 20,227    |                   |           |          | (685    | )        |          |        | (3.4  | )    |       |         | 18,818    |           |         |           | 18,624    |           |           |          | (194     | )        |          |       | (1.0     | )    
|                                                                                                                                                                | Corporate general and administrative(a)                                          |                              |                  | 52,242            |                      |           |         | 62,479    |                   |           |          | 10,237  |          |          |        | 16.4  |      |       |         |          |           |         |           |          |           |           |          |         |          |          |       |         |      
|                                                                                                                                                                | Impairment                                                                       |                              |                  | 38,534            |                      |           |         |          |                   |           |          | (38,534 | )        |          |        |      |      |       |         | 193,595   |           |         |           | 7,500     |           |           |          | (186,095 | )        |          |       | (2,481.3 | )    
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|                                                                                                                                                                |                                                                                  | Total expenses               |                  |                   | 1,856,774            |           |         |           | 1,693,765         |           |          |         | (163,009 | )        |        |       | (9.6 | )     |         |           | 1,989,857 |         |           |           | 1,717,472 |           |          |          | (272,385 | )        |       |          | (15.9 | )    
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|                                                                                                                                                                |                                                                                  |                              | Operating income |                   |                      | 1,017,258 |         |           |                   | 1,132,055 |          |         |          | (114,797 | )      |       |      | (10.1 | )       |           |           | 894,919 |           |           |           | 1,235,198 |          |          |          | (340,279 | )     |          |       | (27.5 | )
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|Other income (expense):                                                                                                                                         |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |           |           |           |          |          |          |          |       |         
|                                                                                                                                                                | Interest and dividend income                                                     |                              |                  | 8,041             |                      |           |         | 12,426    |                   |           |          | (4,385  | )        |          |        | (35.3 | )    |       |         | 3,306     |           |         |           | 3,647     |           |           |          | (341     | )        |          |       | (9.4     | )    
|                                                                                                                                                                | Realized gain on settlement of derivatives and sale of
    marketable securities |                              |                  | 28,976            |                      |           |         | 9,286     |                   |           |          | 19,690  |          |          |        | 212.0 |      |       |         |          |           |         |           |          |           |           |          |         |          |          |       |         |      
|                                                                                                                                                                | Interest expense(b)                                                              |                              |                  | (848,677          | )                    |           |         | (813,304  | )                 |           |          | (35,373 | )        |          |        | (4.3  | )    |       |         | (158,311  | )         |         |           | (185,599  | )         |           |          | 27,288   |          |          |       | 14.7     |      
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|                                                                                                                                                                |                                                                                  | Total other income (expense) |                  |                   | (811,660             | )         |         |           | (791,592          | )         |          |         | (20,068  | )        |        |       | (2.5 | )     |         |           | (155,005  | )       |           |           | (181,952  | )         |          |          | 26,947   |          |       |          | 14.8  |      
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate |                                                                                  |                              | 205,598          |                   |                      |           | 340,463 |           |                   |           | (134,865 | )       |          |          | (39.6  | )     |      |       | 739,914 |           |           |         | 1,053,246 |           |           |           | (313,332 | )        |          |          | (29.7 | )       
|Income taxes                                                                                                                                                    |                                                                                  |                              | (1,981           | )                 |                      |           | (5,429  | )         |                   |           | 3,448    |         |          |          | 63.5   |       |      |       | (336    | )         |           |         | (772      | )         |           |           | 436      |          |          |          | 56.5  |         
|Minority interests:                                                                                                                                             |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |           |           |           |          |          |          |          |       |         
|                                                                                                                                                                | EOP Partnership                                                                  |                              |                  | (11,747           | )                    |           |         | (74,152   | )                 |           |          | 62,405  |          |          |        | 84.2  |      |       |         |          |           |         |           |          |           |           |          |         |          |          |       |         |      
|                                                                                                                                                                | Partially owned properties                                                       |                              |                  | (10,264           | )                    |           |         | (9,271    | )                 |           |          | (993    | )        |          |        | (10.7 | )    |       |         | (10,263   | )         |         |           | (9,271    | )         |           |          | (992     | )        |          |       | (10.7    | )    
|Income from investments in unconsolidated joint ventures                                                                                                        |                                                                                  |                              | 50,304           |                   |                      |           | 79,882  |           |                   |           | (29,578  | )       |          |          | (37.0  | )     |      |       | 30,663  |           |           |         | 42,387    |           |           |           | (11,724  | )        |          |          | (27.7 | )       
|Gain on sales of real estate                                                                                                                                    |                                                                                  |                              | 21,901           |                   |                      |           | 99,110  |           |                   |           | (77,209  | )       |          |          | (77.9  | )     |      |       |        |           |           |         |          |           |           |           |         |          |          |          |      |         
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|Income from continuing operations                                                                                                                               |                                                                                  |                              | 253,811          |                   |                      |           | 430,603 |           |                   |           | (176,792 | )       |          |          | (41.1  | )     |      |       | 759,978 |           |           |         | 1,085,590 |           |           |           | (325,612 | )        |          |          | (30.0 | )       
|Discontinued operations                                                                                                                                         |                                                                                  |                              | (82,807          | )                 |                      |           | 224,459 |           |                   |           | (307,266 | )       |          |          | (136.9 | )     |      |       |        |           |           |         |          |           |           |           |         |          |          |          |      |         
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|Income before cumulative effect of a change in accounting
    principle                                                                                         |                                                                                  |                              | 171,004          |                   |                      |           | 655,062 |           |                   |           | (484,058 | )       |          |          | (73.9  | )     |      |       |        |           |           |         |          |           |           |           |         |          |          |          |      |         
|Cumulative effect of a change in accounting principle                                                                                                           |                                                                                  |                              | (33,697          | )                 |                      |           |        |           |                   |           | (33,697  | )       |          |          |       |       |      |       |        |           |           |         |          |           |           |           |         |          |          |          |      |         
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          
|Net income                                                                                                                                                      |                                                                                  | $                            | 137,307          |                   |                      | $         | 655,062 |           |                   | $         | (517,755 | )       |          |          | (79.0  | )%    |      | $     | 759,978 |           |           | $       | 1,085,590 |           |           | $         | (325,612 | )        |          |          | (30.0 | )%      
|                                                                                                                                                                |                                                                                  |                              |                  |                   |                      |           |         |           |                   |           |          |         |          |          |        |       |      |       |         |           |           |         |           |          

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|                                           |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |           |   |   |        |          |   |  |       |       |   
|------------------------------------------ | ------------------------------------ | ---------------------- | ------ | ----------------- | -------------------- | - | ------ | --------- | ----------------- | - | ----- | ------- | - | ---- | --- | ---- | ---- | - | ------ | --------- | - | - | ------ | --------- | - | - | ------ | -------- | - |  | ----- | ----- | --
|                                           |                                      | Total Company          |        |                   | Same Store Portfolio |  
|                                           |                                      |                        |        |                   |                      |  
|                                           |                                      |                        |        | Change Favorable/ |                      |   |        |           | Change Favorable/ |  
|                                           |                                      |                        |        | (Unfavorable)     |                      |   |        |           | (Unfavorable)     |  
|                                           |                                      |                        |        |                   |                      |   |        |           |                   |  
|                                           |                                      | 2004                   |        |                   | 2003                 |   |        | Amount    |                   |   | %     |         |   | 2004 |     |      | 2003 |   |        | Amount    |   |   | %      |          
|                                           |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |          
|                                           |                                      | (Dollars in thousands) |       
|Selected Items from Continuing Operations: |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |           |   |   |        |          |   |  |       |      
|                                           | Property net operating income(c)     |                        | $      | 1,802,422         |                      |   | $      | 1,816,361 |                   |   | $     | (13,939 | ) |      |     | (0.8 | )%   |   | $      | 1,804,508 |   |   | $      | 1,907,124 |   |   | $      | (102,616 | ) |  |       | (5.4  | )%
|                                           |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |          
|                                           | Property operating margin(c,d)       |                        |        | 63.0              | %                    |   |        | 64.6      | %                 |   |       |         |   |      |     | (1.6 | )%   |   |        | 62.6      | % |   |        | 64.6      | % |   |        |          |   |  |       | (2.0  | )%
|                                           |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |          
|                                           |                                      | $                      | 73,104 |                   |                      | $ | 68,462 |           |                   | $ | 4,642 |         |   |      | 6.8 | %    |      | $ | 60,813 |           |   | $ | 68,048 |           |   | $ | (7,235 | )        |   |  | (10.6 | )%   
|                                           | Deferred rental revenue              |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |           |   |   |        |          |   |  |       |       |   
|                                           |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |          
|                                           | Income from early lease terminations |                        | $      | 48,056            |                      |   | $      | 53,303    |                   |   | $     | (5,247  | ) |      |     | (9.8 | )%   |   | $      | 38,489    |   |   | $      | 60,211    |   |   | $      | (21,722  | ) |  |       | (36.1 | )%
|                                           |                                      |                        |        |                   |                      |   |        |           |                   |   |       |         |   |      |     |      |      |   |        |           |   |   |        |          






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate general and administrative expense is not allocated to
    the Same Store Portfolio because these expenses are not directly
    incurred in connection with any specific property.                                                                                                                                                                                                                                                                                        
|   
|(b) |  | Interest expense (including amortization of deferred financing
    costs and prepayment expenses) for the Same Store Portfolio
    represents interest expense on mortgage debt and does not
    include interest expense on the unsecured notes or the lines of
    credit.                                                                                                                                                                                                        
|   
|(c) |  | Property net operating income consists of property operating
    revenues minus property operating expenses. Included in property
    operating revenues are rental revenue, tenant reimbursements,
    parking and other income, which includes income from early lease
    terminations. Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses. See Item 8  Note 19 for
    more information.
|   
|(d) |  | Property operating margin is determined by dividing property
    operating revenues less property operating expenses by property
    operating revenues.                                                                                                                                                                                                                                                                                                                            

Property Operating Revenues






Depreciation and Amortization






45



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##### Table of Contents



Real Estate Taxes






Insurance Expense




Repairs and Maintenance






Property Operating






Corporate General and Administrative Expenses




Impairment




Interest and Dividend Income




46



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##### Table of Contents



Realized Gain on Settlement of Derivatives and Sale of
Marketable Securities






Interest Expense






Income from Investments in Unconsolidated Joint Ventures






Gains on Sales of Real Estate




Discontinued Operations




Cumulative Effect of a Change in Accounting Principle




47



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##### Table of Contents



III. Liquidity and Capital Resources


Liquidity












48



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##### Table of Contents









Distributions




|                          |  |                        |          |  |                     |                        |        |                          |  |   |        | 
|------------------------- |  | ---------------------- | -------- |  | ------------------- | ---------------------- | ------ | ------------------------ |  | - | ------ | 
|                          |  | Quarterly Distribution |          |  | Annual Distribution |                        |        |                         
|Security                  |  | Per Share              |          |  | Per Share           |                        |        | 2005 Total Distributions | 
|                          |  |                        |          |  |                     |                        |        |                          | 
|                          |  |                        |          |  |                     | (Dollars in thousands) |       
|Series B Preferred Shares |  | $                      | 0.65625  |  |                     | $                      | 2.625  |                          |  | $ | 15,724 | 
|Series G Preferred Shares |  | $                      | 0.484375 |  |                     | $                      | 1.9375 |                          |  | $ | 16,469 | 
|                          |  |                        |          |  |                     |                        |        |                          | 
|                          |  |                        |          |  |                     |                        |        |                          |  | $ | 32,193 | 
|                          |  |                        |          |  |                     |                        |        |                          | 



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Contractual Obligations




|                                                        |                               |                        |           |            |      |   |         |           |  |   |         |           |  |      |         |         |      |   |         |            |  |   |           |           |  |   |           |           | 
|------------------------------------------------------- | ----------------------------- | ---------------------- | --------- | ---------- | ---- | - | ------- | --------- |  | - | ------- | --------- |  | ---- | ------- | ------- | ---- | - | ------- | ---------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                                                        |                               | Payments Due by Period |          
|                                                        |                               |                        |          
|                                                        |                               | Total                  |           |            | 2006 |   |         | 2007      |  |   | 2008    |           |  | 2009 |         |         | 2010 |   |         | Thereafter | 
|                                                        |                               |                        |           |            |      |   |         |           |  |   |         |           |  |      |         |         |      |   |         |            | 
|                                                        |                               | (Dollars in thousands) |          
|Mortgage debt(a)                                        |                               | $                      | 2,169,383 |            |      | $ | 108,704 |           |  | $ | 263,018 |           |  | $    | 158,178 |         |      | $ | 630,698 |            |  | $ | 264,076   |           |  | $ | 744,709   |          
|Unsecured notes(a)                                      |                               |                        | 9,056,556 |            |      |   | 652,924 |           |  |   | 988,543 |           |  |      | 490,376 |         |      |   | 862,475 |            |  |   | 1,564,207 |           |  |   | 4,498,031 |          
|Lines of Credit                                         |                               |                        | 1,631,000 |            |      |   | 750,000 |           |  |   |        |           |  |      |        |         |      |   | 881,000 |            |  |   |          |           |  |   |          |          
|Series B Preferred Shares                               |                               |                        | 299,497   |            |      |   |        |           |  |   |        |           |  |      | 299,497 |         |      |   |        |            |  |   |          |           |  |   |          |          
|Share of mortgage debt of unconsolidated joint ventures |                               |                        | 473,725   |            |      |   | 52,217  |           |  |   | 3,999   |           |  |      | 18,610  |         |      |   | 11,645  |            |  |   | 96,174    |           |  |   | 291,080   |          
|Consolidated operating lease obligations(b)             |                               |                        | 1,320,502 |            |      |   | 22,124  |           |  |   | 22,119  |           |  |      | 21,855  |         |      |   | 21,644  |            |  |   | 21,733    |           |  |   | 1,211,027 |          
|Unconsolidated operating lease obligations(b)           |                               |                        | 33,854    |            |      |   | 564     |           |  |   | 564     |           |  |      | 564     |         |      |   | 564     |            |  |   | 564       |           |  |   | 31,034    |          
|                                                        |                               |                        |           |            |      |   |         |           |  |   |         |           |  |      |         |         |      |   |         |            | 
|                                                        | Total Contractual Obligations |                        | $         | 14,984,517 |      |   | $       | 1,586,533 |  |   | $       | 1,278,243 |  |      | $       | 989,080 |      |   | $       | 2,408,026  |  |   | $         | 1,946,754 |  |   | $         | 6,775,881 | 
|                                                        |                               |                        |           |            |      |   |         |           |  |   |         |           |  |      |         |         |      |   |         |            | 






|    |                                             
|--- | --------------------------------------------
|(a) | Balance excludes net discounts and premiums.



|    |  |                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Represents payments due under long-term leases in which we are
    the lessee of ground parcels and air rights associated with our
    office properties.



Derivative
Financial Instruments




Energy
Contracts




Off-Balance
Sheet Arrangements




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| |                      
| | ---------------------
| | Property Acquisitions



Debt Financing




| |                  
| | -----------------
| | Consolidated Debt



|                                           |                  |                                        |                         |       |           |            |            |      |           |            |            |  
|------------------------------------------ | ---------------- | -------------------------------------- | ----------------------- | ----- | --------- | ---------- | ---------- | ---- | --------- | ---------- | ---------- | -
|                                           |                  | December 31,                           |                        
|                                           |                  |                                        |                        
|                                           |                  | 2005                                   |                         |       | 2004      |           
|                                           |                  |                                        |                         |       |           |           
|                                           |                  | (Dollars in thousands)                 |                        
|Balance (includes discounts and premiums): |                  |                                        |                         |       |           |            |            |     
|                                           | Fixed rate:      |                                        |                         |       |           |            |            |      |          
|                                           |                  | Mortgage debt                          |                         | $     | 1,988,377 |            |            | $    | 2,502,871 |           
|                                           |                  | Unsecured notes                        |                         |       | 8,787,620 |            |            |      | 8,439,016 |           
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        | Total                   |       |           | 10,775,997 |            |      |           | 10,941,887 |           
|                                           |                  |                                        |                         |       |           |           
|                                           | Variable rate:   |                                        |                         |       |           |            |            |      |          
|                                           |                  | Mortgage debt                          |                         |       | 175,821   |            |            |      | 106,196   |           
|                                           |                  | Unsecured notes and lines of credit(a) |                         |       | 1,876,000 |            |            |      | 1,761,376 |           
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        | Total                   |       |           | 2,051,821  |            |      |           | 1,867,572  |           
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        |                         | Total |           | $          | 12,827,818 |      |           | $          | 12,809,459 |  
|                                           |                  |                                        |                         |       |           |           
|Percent of total debt:                     |                  |                                        |                         |       |           |            |            |     
|                                           | Fixed rate       |                                        |                         | 84.0  | %         |            |            | 85.4 | %        
|                                           | Variable rate(a) |                                        |                         | 16.0  | %         |            |            | 14.6 | %        
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        |                         | Total |           |            | 100.0      | %    |           |            | 100.0      | %
|                                           |                  |                                        |                         |       |           |           
|Effective interest rate at end of period:  |                  |                                        |                         |       |           |            |            |     
|                                           | Fixed rate:      |                                        |                         |       |           |            |            |      |          
|                                           |                  | Mortgage debt                          |                         |       | 7.01      | %          |            |      | 7.80      | %         
|                                           |                  | Unsecured notes                        |                         |       | 6.80      | %          |            |      | 6.87      | %         
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        | Effective interest rate |       |           | 6.84       | %          |      |           | 7.09       | %         
|                                           |                  |                                        |                         |       |           |           
|                                           | Variable rate:   |                                        |                         |       |           |            |            |      |          
|                                           |                  | Mortgage debt                          |                         |       | 5.17      | %          |            |      | 5.53      | %         
|                                           |                  | Unsecured notes and lines of credit(a) |                         |       | 5.02      | %          |            |      | 3.75      | %         
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        | Effective interest rate |       |           | 5.03       | %          |      |           | 3.85       | %         
|                                           |                  |                                        |                         |       |           |           
|                                           |                  |                                        |                         | Total |           |            | 6.55       | %    |           |            | 6.61       | %
|                                           |                  |                                        |                         |       |           |           






|    |                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The variable rate debt as of December 31, 2004 included
    $1.0 billion of fixed rate unsecured notes that were
    converted to variable rate through several interest rate swaps
    entered into in March 2004. These swaps were terminated at
    various times during 2005. The interest rates for the remaining
    variable rate debt are based on various spreads over LIBOR.

51



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| |                                  
| | ---------------------------------
| | Unconsolidated Joint Venture Debt



|                                           |               |                        |   |         |         |   |   |         |         |  
|------------------------------------------ | ------------- | ---------------------- | - | ------- | ------- | - | - | ------- | ------- | -
|                                           |               | December 31,           |  
|                                           |               |                        |  
|                                           |               | 2005                   |   |         | 2004    |  
|                                           |               |                        |   |         |         |  
|                                           |               | (Dollars in thousands) |  
|Balance (includes discounts and premiums): |               |                        |   |         |         |   |   |        
|                                           | Fixed rate    |                        | $ | 472,372 |         |   | $ | 330,929 |        
|                                           | Variable rate |                        |   | 1,353   |         |   |   | 30,103  |        
|                                           |               |                        |   |         |         |  
|                                           |               | Total                  |   | $       | 473,725 |   |   | $       | 361,032 |  
|                                           |               |                        |   |         |         |  
|Effective interest rate at end of period:  |               |                        |   |         |         |   |   |        
|                                           | Fixed rate    |                        |   | 5.47    | %       |   |   | 5.56    | %      
|                                           | Variable rate |                        |   | 10.40   | %       |   |   | 3.35    | %      
|                                           |               |                        |   |         |         |  
|                                           |               | Total                  |   |         | 5.48    | % |   |         | 5.37    | %
|                                           |               |                        |   |         |         |  

Mortgage Debt




|                                |                                                 |                        |           |            |  
|------------------------------- | ----------------------------------------------- | ---------------------- | --------- | ---------- | -
|                                |                                                 | (Dollars in thousands) |          
|                                |                                                 |                        |          
|Balance at December 31, 2004(a) |                                                 | $                      | 2,622,750 |           
|                                | Repayments and scheduled principal amortization |                        |           | (1,077,322 | )
|                                | Assumed through property acquisitions           |                        |           | 118,486    |  
|                                | Repaid upon sale of property                    |                        |           | (13,386    | )
|                                | Refinancing                                     |                        |           | 150        |  
|                                | Issuances                                       |                        |           | 518,705    |  
|                                |                                                 |                        |          
|Balance at December 31, 2005(a) |                                                 | $                      | 2,169,383 |           
|                                |                                                 |                        |          






|    |                                         
|--- | ----------------------------------------
|(a) | Excludes net discounts on mortgage debt.



Unconsolidated Joint Venture Mortgage Debt




|                             |                                                 |                        |         |         |  
|---------------------------- | ----------------------------------------------- | ---------------------- | ------- | ------- | -
|                             |                                                 | (Dollars in thousands) |        
|                             |                                                 |                        |        
|Balance at December 31, 2004 |                                                 | $                      | 361,032 |        
|                             | Scheduled principal payments                    |                        |         | (2,807  | )
|                             | Assumed by buyer through a property disposition |                        |         | (16,250 | )
|                             | Refinancing                                     |                        |         | 6,750   |  
|                             | Issuance                                        |                        |         | 125,000 |  
|                             |                                                 |                        |        
|Balance at December 31, 2005 |                                                 | $                      | 473,725 |        
|                             |                                                 |                        |        



Restrictions on Mortgage Debt




52



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##### Table of Contents





Lines of Credit




| |                                        
| | ---------------------------------------
| | $1.25 Billion Revolving Credit Facility







| |                  
| | -----------------
| | Bridge Facilities







| |                
| | ---------------
| | Unsecured Notes



|                                |            |                        |           |          |  
|------------------------------- | ---------- | ---------------------- | --------- | -------- | -
|                                |            | (Dollars in thousands) |          
|                                |            |                        |          
|Balance at December 31, 2004(a) |            | $                      | 9,690,754 |         
|                                | Repayments |                        |           | (675,000 | )
|                                | Issuance   |                        |           | 40,802   |  
|                                |            |                        |          
|Balance at December 31, 2005(a) |            | $                      | 9,056,556 |         
|                                |            |                        |          






|    |                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(a) | Excludes net discounts of $23.9 million and
    $38.4 million at December 31, 2005 and
    December 31, 2004, respectively.



53



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| |                                                        
| | -------------------------------------------------------
| | Restrictions and Covenants under Unsecured Indebtedness





|                                                                                                             |  |                    |     |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | --- | -
|Covenants(a) (in each case as defined in the respective indenture)                                           |  | Actual Performance |    
|                                                                                                             |  |                    |    
|Debt to Adjusted Total Assets may not be greater than 60%                                                    |  |                    | 53  | %
|Secured Debt to Adjusted Total Assets may not be greater than 40%                                            |  |                    | 11  | %
|Consolidated Income Available for Debt Service to Annual Debt
    Service Charge may not be less than 1.50:1 |  |                    | 2.2 |  
|Total Unencumbered Assets to Unsecured Debt may not be less than
    150%(a)                                 |  |                    | 190 | %






|    |                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The unsecured notes we assumed in the merger with Spieker, of
    which $1.2 billion are outstanding at December 31,
    2005, are subject to a minimum ratio of 165%.

Market Risk




| |                                          
| | -----------------------------------------
| | Qualitative Information About Market Risk





| |                                           
| | ------------------------------------------
| | Quantitative Information About Market Risk



| |                   
| | ------------------
| | Interest Rate Risk





54



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|                  |  |                          |                         |  |                          |   |               |                     |  |   |               | 
|----------------- |  | ------------------------ | ----------------------- |  | ------------------------ | - | ------------- | ------------------- |  | - | ------------- | 
|                  |  | Hypothetical change in   |                         |  | (Decrease)/Increase      |   |               | (Decrease)/Increase | 
|As of             |  | market rates of interest |                         |  | Fair Value of Total Debt |   |               | Net Income          | 
|                  |  |                          |                         |  |                          |   |               |                     | 
|December 31, 2005 |  |                          | +10% or 43 basis points |  |                          | $ | (227) million |                     |  | $ | (8.9) million | 
|                  |  |                          | -10% or 43 basis points |  |                          | $ | 236  million  |                     |  | $ | 8.9  million  | 
|December 31, 2004 |  |                          | +10% or 27 basis points |  |                          | $ | (258) million |                     |  | $ | (5.1) million | 
|                  |  |                          | -10% or 27 basis points |  |                          | $ | 272  million  |                     |  | $ | 5.1  million  | 



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Interest Rate Risk  Forward-Starting and
    Fixed-to-Floating
    Interest Rate Swaps

fixed-to




| |                  
| | -----------------
| | Equity Securities



|     |       |                 |                  |  |               |                        |  |                       |                    |  |  |   |           | 
|---- | ----- | --------------- | ---------------- |  | ------------- | ---------------------- |  | --------------------- | ------------------ |  |  | - | --------- | 
|     |       | Total Number of |                  |  | Average Price |                        |  | Total Dollar Value of |                   
|Year |       |                 | Shares Purchased |  |               | Paid Per Share         |  |                       | Shares Repurchased | 
|     |       |                 |                  |  |               |                        |  |                       |                    | 
|     |       |                 |                  |  |               | (Dollars in thousands) | 
|     | 2002  |                 |                  |  | 7,901,900     |                        |  | $                     | 24.92              |  |  | $ | 196,882   | 
|     | 2003  |                 |                  |  | 14,236,400    |                        |  |                       | 25.53              |  |  |   | 363,487   | 
|     | 2004  |                 |                  |  | 1,260,600     |                        |  |                       | 25.80              |  |  |   | 32,518    | 
|     | 2005  |                 |                  |  | 30,986,900    |                        |  |                       | 30.68              |  |  |   | 950,720   | 
|     |       |                 |                  |  |               |                        |  |                       |                    | 
|     | Total |                 |                  |  | 54,385,800    |                        |  | $                     | 28.38              |  |  | $ | 1,543,607 | 
|     |       |                 |                  |  |               |                        |  |                       |                    | 



|     |       |                 |                 |  |               |                        |  |                       |                   |  |  |   |         | 
|---- | ----- | --------------- | --------------- |  | ------------- | ---------------------- |  | --------------------- | ----------------- |  |  | - | ------- | 
|     |       | Total Number of |                 |  | Average Price |                        |  | Total Dollar Value of |                  
|Year |       |                 | Units Purchased |  |               | Paid Per Unit          |  |                       | Units Repurchased | 
|     |       |                 |                 |  |               |                        |  |                       |                   | 
|     |       |                 |                 |  |               | (Dollars in thousands) | 
|     | 2002  |                 |                 |  | 3,727,925     |                        |  | $                     | 28.62             |  |  | $ | 106,690 | 
|     | 2003  |                 |                 |  | 240,240       |                        |  |                       | 26.75             |  |  |   | 6,427   | 
|     | 2004  |                 |                 |  | 139,256       |                        |  |                       | 28.03             |  |  |   | 3,904   | 
|     | 2005  |                 |                 |  | 1,843,164     |                        |  |                       | 30.67             |  |  |   | 56,525  | 
|     |       |                 |                 |  |               |                        |  |                       |                   | 
|     | Total |                 |                 |  | 5,950,585     |                        |  | $                     | 29.16             |  |  | $ | 173,546 | 
|     |       |                 |                 |  |               |                        |  |                       |                   | 

55



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Capital Improvements, Tenant Improvements and Leasing
Costs




| |                     
| | --------------------
| | Capital Improvements





| |   |                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital Improvements  costs for improvements
    that enhance the value of the property such as lobby
    renovations, roof replacement, significant renovations for
    Americans with Disabilities Act compliance, chiller replacement
    and elevator upgrades.                                       
|
| |  | Development and Redevelopment Costs  costs
    associated with the development or redevelopment of a property
    including construction costs, tenant improvements, leasing
    commissions, capitalized interest and operating costs incurred
    while the property is made ready for its intended use.



|                      |                                     |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |       |             |  |   |         |         |  |   |       |        | 
|--------------------- | ----------------------------------- | -------------------------------- | - | -------------- | ----------- |  | - | ------------ | -------------- |  | ----------- | ------ | ------- | -------------- | - | ----- | ----------- |  | - | ------- | ------- |  | - | ----- | ------ | 
|                      |                                     | For the years ended December 31, |  
|                      |                                     |                                  |  
|                      |                                     | 2005                             |   |                | 2004        |  |   | 2003         |               
|                      |                                     |                                  |   |                |             |  |   |              |               
|                      |                                     |                                  |   | Unconsolidated |             |  |   |              | Unconsolidated |  |             |        |         | Unconsolidated |  
|                      |                                     | Consolidated                     |   |                | Properties  |  |   | Consolidated |                |  | Properties  |        |         | Consolidated   |   |       | Properties  | 
|                      |                                     | Properties                       |   |                | (our share) |  |   | Properties   |                |  | (our share) |        |         | Properties     |   |       | (our share) | 
|                      |                                     |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |       |             | 
|                      |                                     | (Dollars in thousands)           |  
|Capital Improvements: |                                     |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |       |             |  |   |         |         |  |   |      
|                      | Capital improvements                |                                  | $ | 87,445         |             |  | $ | 6,258        |                |  | $           | 70,594 |         |                | $ | 6,387 |             |  | $ | 64,052  |         |  | $ | 9,222 |       
|                      | Development and redevelopment costs |                                  |   | 29,424         |             |  |   |             |                |  |             | 51,602 |         |                |   |      |             |  |   | 105,127 |         |  |   | 5,538 |       
|                      |                                     |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |       |             | 
|                      |                                     | Total capital improvements       |   | $              | 116,869     |  |   | $            | 6,258          |  |             | $      | 122,196 |                |   | $     | 6,387       |  |   | $       | 169,179 |  |   | $     | 14,760 | 
|                      |                                     |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |       |             | 





| |                                      
| | -------------------------------------
| | Tenant Improvements and Leasing Costs



56



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|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             |  |   |         |         |  |   |       |       | 
|--------------------------------- | ---------------------- | ------------------------------------------------------ | - | ---------- | ----------- |  | - | ----------- | ---------- |  | ----------- | ------- | ------- | ----------- | - | ----- | ----------- |  | - | ------- | ------- |  | - | ----- | ----- | 
|                                  |                        | For the years ended December 31,                       |  
|                                  |                        |                                                        |  
|                                  |                        | 2005                                                   |   |            | 2004        |  |   | 2003        |           
|                                  |                        |                                                        |   |            |             |  |   |             |           
|                                  |                        |                                                        |   | Total Cost |             |  |   |             | Total Cost |  |             |         |         | Total Cost  |  
|                                  |                        |                                                        |   | per Square |             |  |   |             | per Square |  |             |         |         | per Square  |  
|                                  |                        | Total Costs                                            |   |            | Foot Leased |  |   | Total Costs |            |  | Foot Leased |         |         | Total Costs |   |       | Foot Leased | 
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  |                        | (Dollars in thousands, except per square foot amounts) |  
|Consolidated Properties:          |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             |  |   |         |         |  |   |      
|                                  | Renewals               |                                                        | $ | 107,458    |             |  | $ | 12.90       |            |  | $           | 97,214  |         |             | $ | 11.62 |             |  | $ | 128,673 |         |  | $ | 13.07 |      
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  | Retenanted             |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             |  |   |         |         |  |   |       |      
|                                  |                        | Vacant for less than 12 months                         |   |            | 160,061     |  |   |             | 22.71      |  |             |         | 154,923 |             |   |       | 21.12       |  |   |         | 142,874 |  |   |       | 21.84 | 
|                                  |                        | Vacant longer than 12 months                           |   |            | 100,887     |  |   |             | 28.91      |  |             |         | 104,583 |             |   |       | 28.03       |  |   |         | 105,490 |  |   |       | 30.67 | 
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  | Total Retenanted       |                                                        |   | 260,948    |             |  |   | 24.76       |            |  |             | 259,506 |         |             |   | 23.45 |             |  |   | 248,364 |         |  |   | 24.31 |      
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  |                        | Total/Weighted Average                                 |   |            | 368,406     |  |   |             | 19.52      |  |             |         | 356,720 |             |   |       | 18.36       |  |   |         | 377,037 |  |   |       | 18.79 | 
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|Unconsolidated Joint Ventures(a): |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             |  |   |        
|                                  | Renewals               |                                                        |   | 2,759      |             |  |   | 12.40       |            |  |             | 12,330  |         |             |   | 21.95 |             |  |   | 17,936  |         |  |   | 24.09 |      
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  | Retenanted             |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             |  |   |         |         |  |   |       |      
|                                  |                        | Vacant for less than 12 months                         |   |            | 14,811      |  |   |             | 36.15      |  |             |         | 5,399   |             |   |       | 21.13       |  |   |         | 4,948   |  |   |       | 19.13 | 
|                                  |                        | Vacant longer than 12 months                           |   |            | 15,658      |  |   |             | 46.14      |  |             |         | 7,177   |             |   |       | 46.37       |  |   |         | 3,078   |  |   |       | 35.34 | 
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  | Total Retenanted       |                                                        |   | 30,469     |             |  |   | 40.68       |            |  |             | 12,576  |         |             |   | 30.65 |             |  |   | 8,026   |         |  |   | 23.21 |      
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|                                  |                        | Total/Weighted Average                                 |   |            | 33,228      |  |   |             | 34.20      |  |             |         | 24,906  |             |   |       | 25.62       |  |   |         | 25,962  |  |   |       | 23.81 | 
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 
|Total Properties:                 |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             |  |   |         |         |  |   |      
|                                  | Total/Weighted Average |                                                        | $ | 401,634    |             |  | $ | 20.24       |            |  | $           | 381,626 |         |             | $ | 18.70 |             |  | $ | 402,999 |         |  | $ | 19.05 |      
|                                  |                        |                                                        |   |            |             |  |   |             |            |  |             |         |         |             |   |       |             | 






|    |                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------
|(a) | Represents our share of unconsolidated joint ventures
    tenant improvements and leasing costs for office properties.



57



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|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |         |         |        |         |         |         | 
|------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ----------------------------------------------------------------- | -------- | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | 
|                                                                                                             |                                                               | For the years ended December 31,                                  |         
|                                                                                                             |                                                               |                                                                   |         
|                                                                                                             |                                                               | 2005                                                              |          |         | 2004    |         |        | 2003    |        
|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |        
|                                                                                                             |                                                               | (Dollars in thousands)                                            |         
|Capital improvements                                                                                         |                                                               | $                                                                 | 87,445   |         |         | $       | 70,594 |         |         | $       | 64,052 |        
|Tenant improvements and leasing costs:                                                                       |                                                               |                                                                   |          |         |         |         |        |         |         |         |        |        
|                                                                                                             | Office properties                                             |                                                                   |          | 368,406 |         |         |        | 356,720 |         |         |        | 377,037 |        
|                                                                                                             | Industrial properties                                         |                                                                   |          |        |         |         |        | 4,584   |         |         |        | 3,366   |        
|Expenditures for corporate furniture, fixtures and equipment,
    software, leasehold improvements and other |                                                               |                                                                   | 22,299   |         |         |         | 10,726 |         |         |         | 32,397 |        
|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |        
|                                                                                                             |                                                               |                                                                   | Subtotal |         |         | 478,150 |        |         |         | 442,624 |        |         |         | 476,852 | 
|Development costs                                                                                            |                                                               |                                                                   | 29,424   |         |         |         | 50,815 |         |         |         | 96,736 |        
|Redevelopment costs                                                                                          |                                                               |                                                                   |         |         |         |         | 787    |         |         |         | 8,391  |        
|Timing differences                                                                                           |                                                               |                                                                   | (14,255  | )       |         |         | 82,038 |         |         |         | (4,399 | )      
|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |        
|                                                                                                             |                                                               | Total capital improvements, tenant improvements and leasing costs |          | $       | 493,319 |         |        | $       | 576,264 |         |        | $       | 577,580 |        
|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |        
|Selected items from the consolidated statement of cash
    flows:                                            |                                                               |                                                                   |          |         |         |         |        |         |         |         |        |        
|                                                                                                             | Capital and tenant improvements (including development costs) |                                                                   | $        | 370,595 |         |         | $      | 453,227 |         |         | $      | 438,601 |        
|                                                                                                             | Lease commissions and other costs                             |                                                                   |          | 122,724 |         |         |        | 123,037 |         |         |        | 138,979 |        
|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |        
|                                                                                                             |                                                               | Total                                                             |          | $       | 493,319 |         |        | $       | 576,264 |         |        | $       | 577,580 |        
|                                                                                                             |                                                               |                                                                   |          |         |         |         |        |         |        

Developments in Process




|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         |  |   |         |           |  |  |    |    |  
|---------------------------------- | ----- | --------- | ------- |  | -------- |  | ----------------- | --------- |  | ---------------------- | ----- | - | ----------- | ------- | --------- | --------- | -------- | - | ---------- | ------- |  | - | ------- | --------- |  |  | -- | -- | -
|                                   |       | Estimated |         |  |          |  |                   |           |  |                        |       |   |             |         |          
|                                   |       | Placed in |         |  |          |  |                   |           |  |                        | Costs |   |             | Total   |           |           | Current  |  
|                                   |       | Service   |         |  |          |  | Number of         |           |  | Square                 |       |   | Incurred to |         |           | Estimated |          |   | Percentage |        
|Property                           |       | Date(a)   |         |  | Location |  |                   | Buildings |  |                        | Feet  |   |             | Date(b) |           |           | Costs(c) |   |            | Leased  | 
|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 
|                                   |       |           |         |  |          |  |                   |           |  | (Dollars in thousands) |      
|Summit at Douglas Ridge II         |       |           | Q2 2005 |  |          |  | Roseville, CA     |           |  |                        | 1     |   |             |         | 93,349    |           |          | $ | 20,378     |         |  | $ | 23,806  |           |  |  | 35 | % 
|Kruse Oaks II(d)                   |       |           | Q4 2006 |  |          |  | Portland, OR      |           |  |                        | 1     |   |             |         | 107,000   |           |          |   | 4,922      |         |  |   | 20,923  |           |  |  | 0  | % 
|Bridge Pointe Corporate Center III |       |           | Q4 2006 |  |          |  | San Diego, CA     |           |  |                        | 2     |   |             |         | 150,000   |           |          |   | 11,712     |         |  |   | 35,967  |           |  |  | 0  | % 
|1095 Avenue of the Americas(e)     |       |           | Q3 2007 |  |          |  | New York, NY      |           |  |                        | 1     |   |             |         | 1,028,083 |           |          |   | 515,512    |         |  |   | 849,753 |           |  |  | (e | ) 
|Foundry Square I (Barclays)        |       |           | Q4 2007 |  |          |  | San Francisco, CA |           |  |                        | 1     |   |             |         | 335,890   |           |          |   | 12,481     |         |  |   | 145,564 |           |  |  | 96 | % 
|City Center Plaza West             |       |           | Q1 2008 |  |          |  | Bellevue, WA      |           |  |                        | 1     |   |             |         | 559,400   |           |          |   | 13,043     |         |  |   | 188,025 |           |  |  | 0  | % 
|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 
|                                   | Total |           |         |  |          |  |                   |           |  |                        |       | 7 |             |         |           | 2,273,722 |          |   | $          | 578,048 |  |   | $       | 1,264,038 |  |  |    | 16 | %
|                                   |       |           |         |  |          |  |                   |           |  |                        |       |   |             |         |           |           |          |   |            |         | 






|    |                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The Estimated Placed in Service Date represents the date the
    certificate of occupancy was obtained or is currently
    anticipated to be obtained. Subsequent to obtaining the
    certificate of occupancy, the property will undergo a
    lease-up period.

58



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|    |  |                                                                              
|--- |  | -----------------------------------------------------------------------------
|(b) |  | The Costs Incurred to Date are presented in the balance sheet as
    follows:

|                                                                                 |  |   |         | 
|-------------------------------------------------------------------------------- |  | - | ------- | 
|Developments in process                                                          |  | $ | 567,129 | 
|Deferred leasing costs and other related intangibles recorded at
    acquisition |  |   | 10,919  | 
|                                                                                 |  |   |        
|Total costs incurred to date                                                     |  | $ | 578,048 | 
|                                                                                 |  |   |        



|    |                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The Total Estimated Costs include the acquisition cost of the
    land and building. The Total Estimated Costs are subject to
    change upon, or prior to, the completion of the development and
    include amounts required to
    lease-up the property.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) |  | The land underlying this development is owned by a third party
    from whom we lease it under a ground lease agreement.                                                                                                                                                                                                                                                                  
|   
|(e) |  | On September 29, 2005 we acquired 79%, or
    1,028,083 square feet, of 1095 Avenue of the Americas.
    Verizon, the sole tenant, occupied 96.8% of the property at
    acquisition. Verizon will be moving out in phases throughout
    2006. We plan to redevelop the property as Verizon vacates the
    premises, and we anticipate the redevelopment to be completed in
    Q3 2007.



Inflation




Cash Flows




|                                                         |                                                      |                                  |         |            |      |   |         |           |   |   |        |            |  
|-------------------------------------------------------- | ---------------------------------------------------- | -------------------------------- | ------- | ---------- | ---- | - | ------- | --------- | - | - | ------ | ---------- | -
|                                                         |                                                      | For the years ended December 31, |        
|                                                         |                                                      |                                  |        
|                                                         |                                                      | 2005                             |         |            | 2004 |   |         | 2003      |  
|                                                         |                                                      |                                  |         |            |      |   |         |           |  
|                                                         |                                                      | (Dollars in thousands)           |        
|Cash and cash equivalents at the beginning of the period |                                                      | $                                | 107,126 |            |      | $ | 69,398  |           |   | $ | 58,471 |           
|                                                         | Net cash provided by operating activities            |                                  |         | 987,990    |      |   |         | 1,207,967 |   |   |        | 1,219,571  |  
|                                                         | Net cash provided by (used for) investing activities |                                  |         | 921,413    |      |   |         | (685,333  | ) |   |        | 657,553    |  
|                                                         | Net cash (used for) financing activities             |                                  |         | (1,938,365 | )    |   |         | (484,906  | ) |   |        | (1,866,197 | )
|                                                         |                                                      |                                  |         |            |      |   |         |           |  
|Cash and cash equivalents at the end of the period       |                                                      | $                                | 78,164  |            |      | $ | 107,126 |           |   | $ | 69,398 |           
|                                                         |                                                      |                                  |         |            |      |   |         |           |  



| |                     
| | --------------------
| | Operating Activities



59



---



##### Table of Contents







| |                     
| | --------------------
| | Investing Activities





| |                     
| | --------------------
| | Financing Activities



Analysis of Selected Balance Sheet Items




|                                                                              |  |                        |         |  |              |   |           |        |  |   |          |  
|----------------------------------------------------------------------------- |  | ---------------------- | ------- |  | ------------ | - | --------- | ------ |  | - | -------- | -
|                                                                              |  | December 31,           |         |  | December 31, |   |           |       
|                                                                              |  | 2005                   |         |  | 2004         |   |           | Change | 
|                                                                              |  |                        |         |  |              |   |           |        | 
|                                                                              |  | (Dollars in thousands) |        
|Developments in process                                                       |  | $                      | 567,129 |  |              | $ | 40,492    |        |  | $ | 526,637  |  
|Investments in real estate held for sale, net of accumulated
    depreciation |  | $                      | 75,211  |  |              | $ | 163,390   |        |  | $ | (88,179  | )
|Tenant and other receivables                                                  |  | $                      | 94,858  |  |              | $ | 75,775    |        |  | $ | 19,083   |  
|Investments in unconsolidated joint ventures                                  |  | $                      | 947,989 |  |              | $ | 1,117,143 |        |  | $ | (169,154 | )
|Deferred leasing costs and other related intangibles                          |  | $                      | 522,926 |  |              | $ | 450,625   |        |  | $ | 72,301   |  
|Prepaid expenses and other assets                                             |  | $                      | 303,181 |  |              | $ | 191,992   |        |  | $ | 111,189  |  



| |                        
| | -----------------------
| | Developments in Process





| |                                                                             
| | ----------------------------------------------------------------------------
| | Investment in Real Estate Held for Sale, Net of Accumulated
    Depreciation





| |                             
| | ----------------------------
| | Tenant and Other Receivables



60



---



##### Table of Contents





| |                                             
| | --------------------------------------------
| | Investments in Unconsolidated Joint Ventures





| |                                                     
| | ----------------------------------------------------
| | Deferred Leasing Costs and Other Related Intangibles

Business Combinations




| |                                  
| | ---------------------------------
| | Prepaid Expenses and Other Assets





|    |                                           
|--- | ------------------------------------------
|IV. | Critical Accounting Policies and Estimates



Revenue Recognition








| |   |                                                        
| | - | -------------------------------------------------------
| |  | the agreement has been fully executed and delivered;   
|
| |  | services have been rendered;                           
|
| |  | the amount is fixed or determinable; and               
|
| |  | the collectibility of the amount is reasonably assured.



Rental
Revenues




61



---



##### Table of Contents











| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | Whether the lease agreement specifies what or how the tenant
    improvement allowance is spent;                                           
|
| |  | Whether the tenant improvements are unique to the tenant or
    general-purpose in nature;                                                 
|
| |  | Whether the ownership of the tenant improvements remains with
    the landlord or remains with the tenant at the end of the lease
    term;
|
| |  | Who bears substantial construction risk and cost of the tenant
    improvements.                                                           



Tenant
Reimbursement Revenues




Parking
Revenues




Other
Revenues




62



---



##### Table of Contents



Allowance
for Doubtful Accounts






Impairment of Long-Lived Assets








Depreciation and Amortization


lease-up


Insurance




63



---



##### Table of Contents





Fair Value of Financial Instruments




Accounting for Derivative Instruments and
Hedging Activities




Impact of New Accounting Standards and Accounting Standards
Recently Adopted




| |                         
| | ------------------------
| | New Accounting Standards

Share-Based
Payment


Determining Whether a General Partner, or
the General Partners as a Group, Controls a Limited Partnership
or Similar Entity When the Limited Partners Have Certain Rights 04-5), 04-5


64



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##### Table of Contents



$


Accounting Changes and Error
Corrections  a replacement of APB Opinion No. 20
and FASB Statement No. 3


Accounting for Conditional Asset Retirement
Obligations  an interpretation of FASB Statement
No. 143 Accounting for Asset Retirement
Obligations,


Subsequent Events




V.     Funds From Operations
(FFO)






65



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|                                                                              |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |   |  |  |  |   |           |   |         |   |  |  |  | 
|----------------------------------------------------------------------------- | -------------------------------------- | ----------------------------------------------------------------------------- | ------- | - | -------- | - |  | ---- |  | - | ------- | - | ------- | ---- |  |  |  | - | --------- | - | -------- | - |  |  |  | - | --------- | - | ------- | - |  |  |  | - | --------- | - | ------- | - |  |  |  | 
|                                                                              |                                        | For the Years Ended December 31,                                              |        
|                                                                              |                                        |                                                                               |        
|                                                                              |                                        | 2005                                                                          |         |   | 2004     |   |  | 2003 |  |   | 2002    |   |         | 2001 | 
|                                                                              |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      | 
|                                                                              |                                        | (Dollars in thousands, except per share amounts)                              |        
|Reconciliation of net income to FFO(a):                                       |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |   |  |  |  |   |           |   |         |   |  | 
|Net income                                                                    |                                        | $                                                                             | 42,939  |   |          |   |  |      |  | $ | 137,307 |   |         |      |  |  |  | $ | 655,062   |   |          |   |  |  |  | $ | 770,215   |   |         |   |  |  |  | $ | 618,182   |   |         |   |  | 
|Adjustments:                                                                  |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |   |  |  |  |   |           |   |         |   |  | 
|                                                                              | Plus depreciation and amortization:    |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |   |  |  |  |   |           |   |         |   |  |  | 
|                                                                              |                                        | Included in income from continuing operations and discontinued
    operations |         |   | 797,441  |   |  |      |  |   |         |   | 793,144 |      |  |  |  |   |           |   | 730,351  |   |  |  |  |   |           |   | 691,004 |   |  |  |  |   |           |   | 575,030 |   |  |  |  | 
|                                                                              |                                        | Included in income from investments in unconsolidated joint
    ventures      |         |   | 51,382   |   |  |      |  |   |         |   | 47,185  |      |  |  |  |   |           |   | 53,802   |   |  |  |  |   |           |   | 50,443  |   |  |  |  |   |           |   | 52,901  |   |  |  |  | 
|                                                                              |                                        | Allocated to minority interests in partially owned properties                 |         |   | (5,907   | ) |  |      |  |   |         |   | (6,917  | )    |  |  |  |   |           |   | (4,899   | ) |  |  |  |   |           |   | (3,606  | ) |  |  |  |   |           |   | (4,132  | ) |  |  |  | 
|                                                                              |                                        | Non-real estate related depreciation and amortization                         |         |   | (15,606  | ) |  |      |  |   |         |   | (16,100 | )    |  |  |  |   |           |   | (14,647  | ) |  |  |  |   |           |   | (11,790 | ) |  |  |  |   |           |   | (9,877  | ) |  |  |  | 
|                                                                              | Less net gain on sales of real estate: |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |   |  |  |  |   |           |   |         |   |  |  | 
|                                                                              |                                        | Included in income from continuing operations and discontinued
    operations |         |   | (231,223 | ) |  |      |  |   |         |   | (29,497 | )    |  |  |  |   |           |   | (161,063 | ) |  |  |  |   |           |   | (17,926 | ) |  |  |  |   |           |   | (81,662 | ) |  |  |  | 
|                                                                              |                                        | Included in income from investments in unconsolidated joint
    ventures      |         |   | (26,499  | ) |  |      |  |   |         |   |        |      |  |  |  |   |           |   | (7,063   | ) |  |  |  |   |           |   | (428    | ) |  |  |  |   |           |   |        |   |  |  |  | 
|                                                                              |                                        | Allocated to minority interests in partially owned properties                 |         |   | 29,699   |   |  |      |  |   |         |   | 214     |      |  |  |  |   |           |   |         |   |  |  |  |   |           |   |        |   |  |  |  |   |           |   |        |   |  |  |  | 
|Plus extraordinary item                                                       |                                        |                                                                               |        |   |          |   |  |      |  |   |        |   |         |      |  |  |  |   |          |   |          |   |  |  |  |   |          |   |         |   |  |  |  |   | 1,000     |   |         |   |  | 
|Plus cumulative effect of a change in accounting principle                    |                                        |                                                                               |        |   |          |   |  |      |  |   | 33,697  |   |         |      |  |  |  |   |          |   |          |   |  |  |  |   |          |   |         |   |  |  |  |   | 1,142     |   |         |   |  | 
|Less minority interests in EOP Partnership share of the above
    adjustments |                                        |                                                                               | (60,127 | ) |          |   |  |      |  |   | (87,784 | ) |         |      |  |  |  |   | (65,381   | ) |          |   |  |  |  |   | (79,225   | ) |         |   |  |  |  |   | (63,527   | ) |         |   |  | 
|                                                                              |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |  
|FFO                                                                           |                                        |                                                                               | 582,099 |   |          |   |  |      |  |   | 871,249 |   |         |      |  |  |  |   | 1,186,162 |   |          |   |  |  |  |   | 1,398,687 |   |         |   |  |  |  |   | 1,089,057 |   |         |   |  | 
|Put option settlement                                                         |                                        |                                                                               |        |   |          |   |  |      |  |   |        |   |         |      |  |  |  |   |          |   |          |   |  |  |  |   |          |   |         |   |  |  |  |   | 2,655     |   |         |   |  | 
|Preferred distributions                                                       |                                        |                                                                               | (34,803 | ) |          |   |  |      |  |   | (39,093 | ) |         |      |  |  |  |   | (51,872   | ) |          |   |  |  |  |   | (62,573   | ) |         |   |  |  |  |   | (57,041   | ) |         |   |  | 
|                                                                              |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |  
|FFO available to common shareholders  basic                                  |                                        | $                                                                             | 547,296 |   |          |   |  |      |  | $ | 832,156 |   |         |      |  |  |  | $ | 1,134,290 |   |          |   |  |  |  | $ | 1,336,114 |   |         |   |  |  |  | $ | 1,034,671 |   |         |   |  | 
|                                                                              |                                        |                                                                               |         |   |          |   |  |      |  |   |         |   |         |      |  |  |  |   |           |   |          |   |  |  |  |   |           |   |         |  

|                                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |   |             |   |  |   |             |   |  |   |             |    
|-------------------------------------------------------------------------------------------------------------------- |  | ---------- | ----------- | - | --- | - | ----------- | ---------- |  | - | ----------- | - |  | ---------- | ----------- | --- | --- | - | ----------- | ---------- |  | - | ----------- | --- |  | ---------- | ----------- | - | --- | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | ---
|Adjustments to arrive                                                                                                |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |           
|at net income and                                                                                                    |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |           
|FFO available to                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |           
|common                                                                                                               |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |           
|shareholders plus                                                                                                    |  | Net Income |             |   | FFO |   |             | Net Income |  |   | FFO         |   |  | Net Income |             |     | FFO |   |             | Net Income |  |   | FFO         |     |  | Net Income |             |   | FFO |  
|assumed conversions:                                                                                                 |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |  
|Net income and FFO                                                                                                   |  | $          | 42,939      |   |     | $ | 582,099     |            |  | $ | 137,307     |   |  | $          | 871,249     |     |     | $ | 655,062     |            |  | $ | 1,186,162   |     |  | $          | 770,215     |   |     | $ | 1,398,687   |   |  | $ | 618,182     |   |  | $ | 1,089,057   |    
|Put option settlement                                                                                                |  |            |            |   |     |   |            |            |  |   |            |   |  |            |            |     |     |   |            |            |  |   |            |     |  |            |            |   |     |   |            |   |  |   | 2,655       |   |  |   | 2,655       |    
|Preferred distributions                                                                                              |  |            | (34,803     | ) |     |   | (34,803     | )          |  |   | (39,093     | ) |  |            | (39,093     | )   |     |   | (51,872     | )          |  |   | (51,872     | )   |  |            | (62,573     | ) |     |   | (62,573     | ) |  |   | (57,041     | ) |  |   | (57,041     | )  
|                                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |  
|Net income and FFO available to common shareholders                                                                  |  |            | 8,136       |   |     |   | 547,296     |            |  |   | 98,214      |   |  |            | 832,156     |     |     |   | 603,190     |            |  |   | 1,134,290   |     |  |            | 707,642     |   |     |   | 1,336,114   |   |  |   | 563,796     |   |  |   | 1,034,671   |    
|Net income allocated to minority interests in EOP Partnership                                                        |  |            | 907         |   |     |   | 907         |            |  |   | 11,747      |   |  |            | 11,747      |     |     |   | 74,152      |            |  |   | 74,152      |     |  |            | 89,205      |   |     |   | 89,205      |   |  |   | 76,249      |   |  |   | 76,249      |    
|Minority interests in EOP Partnership share of the above
    adjustments                                             |  |            |            |   |     |   | 60,127      |            |  |   |            |   |  |            | 87,784      |     |     |   |            |            |  |   | 65,381      |     |  |            |            |   |     |   | 79,225      |   |  |   |            |   |  |   | 63,527      |    
|Preferred distributions on Series B preferred shares, of
    which are assumed to be converted into Common Shares(b) |  |            |            |   |     |   |            |            |  |   |            |   |  |            |            |     |     |   |            |            |  |   | 15,724      |     |  |            |            |   |     |   | 15,724      |   |  |   |            |   |  |   | 15,727      |    
|                                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |  
|Net income and FFO available to common shareholders plus assumed
    conversions                                     |  | $          | 9,043       |   |     | $ | 608,330     |            |  | $ | 109,961     |   |  | $          | 931,687     |     |     | $ | 677,342     |            |  | $ | 1,289,547   |     |  | $          | 796,847     |   |     | $ | 1,520,268   |   |  | $ | 640,045     |   |  | $ | 1,190,174   |    
|                                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |  
|Weighted average Common Shares, dilutive potential common shares
    plus assumed conversions outstanding            |  |            | 452,046,455 |   |     |   | 452,046,455 |            |  |   | 450,997,247 |   |  |            | 450,997,247 |     |     |   | 452,561,353 |            |  |   | 460,950,707 |     |  |            | 469,138,720 |   |     |   | 477,528,074 |   |  |   | 411,986,897 |   |  |   | 420,379,753 |    
|                                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |  
|Net income and FFO available to common shareholders plus assumed
    conversions per share                           |  | $          | 0.02        |   |     | $ | 1.35        | (c)        |  | $ | 0.24        |   |  | $          | 2.07        | (c) |     | $ | 1.50        |            |  | $ | 2.80        | (c) |  | $          | 1.70        |   |     | $ | 3.18        |   |  | $ | 1.55        |   |  | $ | 2.83        | (c)
|                                                                                                                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |     |     |   |             |            |  |   |             |     |  |            |             |   |     |  

|                                                                                                                                                                                            |                                     |                                            |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------------------------ |  |  |  |  | ----------- | ---------- |  |  |  |  |  |  | ----------- | ---------- |  |  |  |  |  |  | ----------- | ---------- |  |  |  |  |  |  | ----------- | ---------- |  |  |  |  |  |  | ----------- | ---------- | 
|                                                                                                                                                                                            |                                     | Common Shares and common share equivalents | 
|                                                                                                                                                                                            |                                     |                                            | 
|Weighted average Common Shares outstanding                                                                                                                                                  |                                     |                                            |  |  |  |  | 403,147,751 |            |  |  |  |  |  |  | 400,755,733 |            |  |  |  |  |  |  | 401,016,093 |            |  |  |  |  |  |  | 414,689,029 |            |  |  |  |  |  |  | 360,026,097 |           
|Effect of dilutive potential common shares:                                                                                                                                                 |                                     |                                            |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |           
|                                                                                                                                                                                            | Units                               |                                            |  |  |  |  |             | 45,199,136 |  |  |  |  |  |  |             | 48,163,569 |  |  |  |  |  |  |             | 49,578,372 |  |  |  |  |  |  |             | 52,445,745 |  |  |  |  |  |  |             | 48,893,485 | 
|                                                                                                                                                                                            | Share options and restricted shares |                                            |  |  |  |  |             | 3,699,568  |  |  |  |  |  |  |             | 2,077,945  |  |  |  |  |  |  |             | 1,966,888  |  |  |  |  |  |  |             | 2,003,946  |  |  |  |  |  |  |             | 3,067,315  | 
|                                                                                                                                                                                            |                                     |                                            |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  | 
|Weighted average Common Shares and dilutive potential common
    shares used for net income available to common shareholders                                                                |                                     |                                            |  |  |  |  | 452,046,455 |            |  |  |  |  |  |  | 450,997,247 |            |  |  |  |  |  |  | 452,561,353 |            |  |  |  |  |  |  | 469,138,720 |            |  |  |  |  |  |  | 411,986,897 |           
|Impact of conversion of Series B preferred shares(b)                                                                                                                                        |                                     |                                            |  |  |  |  |            |            |  |  |  |  |  |  |            |            |  |  |  |  |  |  | 8,389,354   |            |  |  |  |  |  |  | 8,389,354   |            |  |  |  |  |  |  | 8,392,856   |           
|                                                                                                                                                                                            |                                     |                                            |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  | 
|Weighted average Common Shares, dilutive potential common shares
    plus assumed conversions used for the calculation of FFO
    available to common shareholders plus assumed conversions |                                     |                                            |  |  |  |  | 452,046,455 |            |  |  |  |  |  |  | 450,997,247 |            |  |  |  |  |  |  | 460,950,707 |            |  |  |  |  |  |  | 477,528,074 |            |  |  |  |  |  |  | 420,379,753 |           
|                                                                                                                                                                                            |                                     |                                            |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  |  |             |            |  |  |  |  |  | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | FFO is a non-GAAP financial measure. The most directly
    comparable GAAP measure is net income, to which it is
    reconciled. See definition below.                                                                                                                                                                                                                                                                                                                                                                               
|   
|(b) |  | The Series B preferred shares are not dilutive to EPS for
    each period presented and are not dilutive to FFO per share for
    the years ended December 31, 2005 and December 31,
    2004 but are dilutive to FFO per share for all other periods
    presented.                                                                                                                                                                                                                                                                 
|   
|(c) |  | FFO for the years ended December 31, 2005,
    December 31, 2004, December 31, 2003 and
    December 31, 2001 includes approximately
    $426.0 million, $231.3 million, $7.5 million and
    $135.2 million, respectively, of non-cash charges relating
    to properties sold and properties we intend to sell, which is
    equivalent to $0.94 per share, $0.51 per share, $0.02
    per share and $0.32 per share on a diluted basis, respectively.
    These charges are not added back to net income when calculating
    FFO.

66



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FFO Definition:









|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk.



67



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##### Table of Contents








|        |                                             
|------- | --------------------------------------------
|Item 8. | Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














Ernst &
Young LLP






68



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















Ernst &
Young LLP






69



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##### Table of Contents



EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED BALANCE SHEETS


|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |            |            |            |  
|------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | -
|                                                                                                       |                                                                                                                                   | December 31,                                                                                                                                                                      |                                                                                                                                         
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                         
|                                                                                                       |                                                                                                                                   | 2005                                                                                                                                                                              |                                                                                                                                          |            | 2004       |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | (Dollars in thousands,                                                                                                                                                            |                                                                                                                                         
|                                                                                                       |                                                                                                                                   | except per share amounts)                                                                                                                                                         |                                                                                                                                         
|Assets:                                                                                                |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |           
|                                                                                                       | Investments in real estate                                                                                                        |                                                                                                                                                                                   | $                                                                                                                                        | 22,949,723 |            |            | $ | 24,835,216 |           
|                                                                                                       | Developments in process                                                                                                           |                                                                                                                                                                                   |                                                                                                                                          | 567,129    |            |            |   | 40,492     |           
|                                                                                                       | Land available for development                                                                                                    |                                                                                                                                                                                   |                                                                                                                                          | 176,868    |            |            |   | 252,524    |           
|                                                                                                       | Investments in real estate held for sale, net of accumulated
    depreciation                                                     |                                                                                                                                                                                   |                                                                                                                                          | 75,211     |            |            |   | 163,390    |           
|                                                                                                       | Accumulated depreciation                                                                                                          |                                                                                                                                                                                   |                                                                                                                                          | (3,336,789 | )          |            |   | (3,151,446 | )         
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | Investments in real estate, net of accumulated depreciation                                                                                                                       |                                                                                                                                          |            | 20,432,142 |            |   |            | 22,140,176 |           
|                                                                                                       | Cash and cash equivalents                                                                                                         |                                                                                                                                                                                   |                                                                                                                                          | 78,164     |            |            |   | 107,126    |           
|                                                                                                       | Tenant and other receivables (net of allowance for doubtful
    accounts of $8,853 and $6,908, respectively)                      |                                                                                                                                                                                   |                                                                                                                                          | 94,858     |            |            |   | 75,775     |           
|                                                                                                       | Deferred rent receivable                                                                                                          |                                                                                                                                                                                   |                                                                                                                                          | 496,826    |            |            |   | 478,184    |           
|                                                                                                       | Escrow deposits and restricted cash                                                                                               |                                                                                                                                                                                   |                                                                                                                                          | 38,658     |            |            |   | 48,784     |           
|                                                                                                       | Investments in unconsolidated joint ventures                                                                                      |                                                                                                                                                                                   |                                                                                                                                          | 947,989    |            |            |   | 1,117,143  |           
|                                                                                                       | Deferred financing costs (net of accumulated amortization of
    $45,920 and $59,748, respectively)                               |                                                                                                                                                                                   |                                                                                                                                          | 58,809     |            |            |   | 61,734     |           
|                                                                                                       | Deferred leasing costs and other related intangibles (net of
    accumulated amortization of $232,024 and $193,348, respectively) |                                                                                                                                                                                   |                                                                                                                                          | 522,926    |            |            |   | 450,625    |           
|                                                                                                       | Prepaid expenses and other assets                                                                                                 |                                                                                                                                                                                   |                                                                                                                                          | 303,181    |            |            |   | 191,992    |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | Total Assets                                                                                                                                                                      |                                                                                                                                          | $          | 22,973,553 |            |   | $          | 24,671,539 |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                      
|Liabilities, Minority Interests, Mandatorily Redeemable
    Preferred Shares and Shareholders Equity: |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |           
|                                                                                                       | Liabilities:                                                                                                                      |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |            |           
|                                                                                                       | Mortgage debt (net of (discounts) of $(5,185) and
    $(13,683), respectively)                                                    |                                                                                                                                                                                   | $                                                                                                                                        | 2,164,198  |            |            | $ | 2,609,067  |           
|                                                                                                       | Unsecured notes (net of (discounts) of $(23,936) and
    $(38,362), respectively)                                                 |                                                                                                                                                                                   |                                                                                                                                          | 9,032,620  |            |            |   | 9,652,392  |           
|                                                                                                       | Lines of credit                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          | 1,631,000  |            |            |   | 548,000    |           
|                                                                                                       | Accounts payable and accrued expenses                                                                                             |                                                                                                                                                                                   |                                                                                                                                          | 574,225    |            |            |   | 556,851    |           
|                                                                                                       | Distribution payable                                                                                                              |                                                                                                                                                                                   |                                                                                                                                          | 3,736      |            |            |   | 2,652      |           
|                                                                                                       | Other liabilities (net of (discounts) of $(25,597) and
    $(28,536), respectively)                                               |                                                                                                                                                                                   |                                                                                                                                          | 483,468    |            |            |   | 484,378    |           
|                                                                                                       | Commitments and contingencies                                                                                                     |                                                                                                                                                                                   |                                                                                                                                          |           |            |            |   |           |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | Total Liabilities                                                                                                                                                                 |                                                                                                                                          |            | 13,889,247 |            |   |            | 13,853,340 |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       | Minority Interests:                                                                                                               |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |            |           
|                                                                                                       |                                                                                                                                   | EOP Partnership                                                                                                                                                                   |                                                                                                                                          |            | 863,923    |            |   |            | 1,065,376  |           
|                                                                                                       |                                                                                                                                   | Partially owned properties                                                                                                                                                        |                                                                                                                                          |            | 172,278    |            |   |            | 182,041    |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | Total Minority Interests                                                                                                                                                          |                                                                                                                                          |            | 1,036,201  |            |   |            | 1,247,417  |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       | Mandatorily Redeemable Preferred Shares:                                                                                          |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |            |           
|                                                                                                       |                                                                                                                                   | 5.25% Series B Convertible, Cumulative Redeemable Preferred
    Shares, liquidation preference $50.00 per share, 5,989,930
    and 5,990,000 issued and outstanding, respectively |                                                                                                                                          |            | 299,497    |            |   |            | 299,500    |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       | Shareholders Equity:                                                                                                             |                                                                                                                                                                                   |                                                                                                                                          |            |            |            |   |            |           
|                                                                                                       |                                                                                                                                   | Preferred Shares, 100,000,000 authorized:                                                                                                                                         |                                                                                                                                          |            |            |            |   |            |            |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   | 7.75% Series G Cumulative Redeemable Preferred Shares,
    liquidation preference $25.00 per share, 8,500,000 issued
    and outstanding |            |            | 212,500    |   |            |            | 212,500    |  
|                                                                                                       |                                                                                                                                   | Common Shares, $0.01 par value; 750,000,000 shares
    authorized, 380,674,998 and 403,842,441 issued and outstanding,
    respectively                                           |                                                                                                                                          |            | 3,807      |            |   |            | 4,038      |           
|                                                                                                       |                                                                                                                                   | Other Shareholders Equity:                                                                                                                                                       |                                                                                                                                          |            |            |            |   |            |            |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   | Additional paid in capital                                                                                                               |            |            | 9,745,819  |   |            |            | 10,479,305 |  
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   | Deferred compensation                                                                                                                    |            |            | (533       | ) |            |            | (1,916     | )
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   | Dividends in excess of accumulated earnings                                                                                              |            |            | (2,156,627 | ) |            |            | (1,359,722 | )
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   | Accumulated other comprehensive loss (net of accumulated
    amortization of
    $11,948 and $5,133, respectively)                       |            |            | (56,358    | ) |            |            | (62,923    | )
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | Total Shareholders Equity                                                                                                                                                        |                                                                                                                                          |            | 7,748,608  |            |   |            | 9,271,282  |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           
|                                                                                                       |                                                                                                                                   | Total Liabilities, Minority Interests, Mandatorily Redeemable
    Preferred Shares and
    Shareholders Equity                                                                   |                                                                                                                                          | $          | 22,973,553 |            |   | $          | 24,671,539 |           
|                                                                                                       |                                                                                                                                   |                                                                                                                                                                                   |                                                                                                                                          |            |            |           



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##### Table of Contents



EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |             |          |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------- | ----------- | -------- | --------- | ------- | ----------- | -------- | --------- | ------- | ----------- | -------- | --------- | -
|                                                                                                                                                                                 |                                                                                     | For the years ended December 31,                                 |                             
|                                                                                                                                                                                 |                                                                                     |                                                                  |                             
|                                                                                                                                                                                 |                                                                                     | 2005                                                             |                              |             | 2004     |           |         | 2003        |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 |                                                                                     | (Dollars in thousands,                                           |                             
|                                                                                                                                                                                 |                                                                                     | except per share amounts)                                        |                             
|Revenues:                                                                                                                                                                        |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |            
|                                                                                                                                                                                 | Rental                                                                              |                                                                  | $                            | 2,340,922   |          |           | $       | 2,278,286   |          |           | $       | 2,224,934   |         
|                                                                                                                                                                                 | Tenant reimbursements                                                               |                                                                  |                              | 422,436     |          |           |         | 403,816     |          |           |         | 405,290     |         
|                                                                                                                                                                                 | Parking                                                                             |                                                                  |                              | 114,057     |          |           |         | 108,061     |          |           |         | 103,107     |         
|                                                                                                                                                                                 | Other                                                                               |                                                                  |                              | 105,434     |          |           |         | 69,643      |          |           |         | 76,628      |         
|                                                                                                                                                                                 | Fee income                                                                          |                                                                  |                              | 17,740      |          |           |         | 14,226      |          |           |         | 15,861      |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 |                                                                                     |                                                                  | Total revenues               |             |          | 3,000,589 |         |             |          | 2,874,032 |         |             |          | 2,825,820 |  
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Expenses:                                                                                                                                                                        |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |            
|                                                                                                                                                                                 | Depreciation                                                                        |                                                                  |                              | 656,102     |          |           |         | 614,748     |          |           |         | 561,033     |         
|                                                                                                                                                                                 | Amortization                                                                        |                                                                  |                              | 93,663      |          |           |         | 72,954      |          |           |         | 56,428      |         
|                                                                                                                                                                                 | Real estate taxes                                                                   |                                                                  |                              | 339,006     |          |           |         | 324,481     |          |           |         | 305,588     |         
|                                                                                                                                                                                 | Insurance                                                                           |                                                                  |                              | 59,567      |          |           |         | 29,521      |          |           |         | 19,846      |         
|                                                                                                                                                                                 | Repairs and maintenance                                                             |                                                                  |                              | 340,904     |          |           |         | 312,928     |          |           |         | 297,677     |         
|                                                                                                                                                                                 | Property operating                                                                  |                                                                  |                              | 441,834     |          |           |         | 390,454     |          |           |         | 370,487     |         
|                                                                                                                                                                                 | Ground rent                                                                         |                                                                  |                              | 22,517      |          |           |         | 20,912      |          |           |         | 20,227      |         
|                                                                                                                                                                                 | Corporate general and administrative                                                |                                                                  |                              | 66,536      |          |           |         | 52,242      |          |           |         | 62,479      |         
|                                                                                                                                                                                 | Impairment                                                                          |                                                                  |                              | 65,738      |          |           |         | 38,534      |          |           |         |            |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 |                                                                                     |                                                                  | Total expenses               |             |          | 2,085,867 |         |             |          | 1,856,774 |         |             |          | 1,693,765 |  
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 |                                                                                     |                                                                  | Operating income             |             |          | 914,722   |         |             |          | 1,017,258 |         |             |          | 1,132,055 |  
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Other income (expense):                                                                                                                                                          |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |            
|                                                                                                                                                                                 | Interest and dividend income                                                        |                                                                  |                              | 15,896      |          |           |         | 8,041       |          |           |         | 12,426      |         
|                                                                                                                                                                                 | Realized gain on settlement of derivatives and sale of
    marketable securities    |                                                                  |                              | 157         |          |           |         | 28,976      |          |           |         | 9,286       |         
|                                                                                                                                                                                 | Interest:                                                                           |                                                                  |                              |             |          |           |         |             |          |           |         |             |         
|                                                                                                                                                                                 |                                                                                     | Expense incurred                                                 |                              |             | (819,868 | )         |         |             | (833,393 | )         |         |             | (806,812 | )        
|                                                                                                                                                                                 |                                                                                     | Amortization of deferred financing costs and prepayment expenses |                              |             | (11,857  | )         |         |             | (15,284  | )         |         |             | (6,492   | )        
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 |                                                                                     |                                                                  | Total other income (expense) |             |          | (815,672  | )       |             |          | (811,660  | )       |             |          | (791,592  | )
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Income before income taxes, allocation to minority interests,
    income from investments in unconsolidated joint ventures and
    gain on sales of real estate                  |                                                                                     |                                                                  | 99,050                       |             |          |           | 205,598 |             |          |           | 340,463 |            
|Income taxes                                                                                                                                                                     |                                                                                     |                                                                  | 272                          |             |          |           | (1,981  | )           |          |           | (5,429  | )          
|Minority Interests:                                                                                                                                                              |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |            
|                                                                                                                                                                                 | EOP Partnership                                                                     |                                                                  |                              | (907        | )        |           |         | (11,747     | )        |           |         | (74,152     | )       
|                                                                                                                                                                                 | Partially owned properties                                                          |                                                                  |                              | (9,825      | )        |           |         | (10,264     | )        |           |         | (9,271      | )       
|Income from investments in unconsolidated joint ventures
    (including gain on sales of real estate of $26,499, $0 and
    $7,063, respectively)                                |                                                                                     |                                                                  | 68,996                       |             |          |           | 50,304  |             |          |           | 79,882  |            
|Gain on sales of real estate                                                                                                                                                     |                                                                                     |                                                                  | 46,308                       |             |          |           | 21,901  |             |          |           | 99,110  |            
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Income from continuing operations                                                                                                                                                |                                                                                     |                                                                  | 203,894                      |             |          |           | 253,811 |             |          |           | 430,603 |            
|Discontinued operations (including net gain on sales of real
    estate and provision for (loss) on properties held for sale of
    $(22,082), $5,473 and $61,953, respectively) |                                                                                     |                                                                  | (160,955                     | )           |          |           | (82,807 | )           |          |           | 224,459 |            
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Income before cumulative effect of a change in accounting
    principle                                                                                                          |                                                                                     |                                                                  | 42,939                       |             |          |           | 171,004 |             |          |           | 655,062 |            
|Cumulative effect of a change in accounting principle                                                                                                                            |                                                                                     |                                                                  |                             |             |          |           | (33,697 | )           |          |           |        |            
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Net income                                                                                                                                                                       |                                                                                     |                                                                  | 42,939                       |             |          |           | 137,307 |             |          |           | 655,062 |            
|Preferred distributions                                                                                                                                                          |                                                                                     |                                                                  | (34,803                      | )           |          |           | (39,093 | )           |          |           | (51,872 | )          
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Net income available to common shareholders                                                                                                                                      |                                                                                     | $                                                                | 8,136                        |             |          | $         | 98,214  |             |          | $         | 603,190 |            
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Earnings per share  basic:                                                                                                                                                      |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |            
|                                                                                                                                                                                 | Income from continuing operations per share                                         |                                                                  | $                            | 0.38        |          |           | $       | 0.50        |          |           | $       | 1.01        |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 | Net income available to common shareholders per share                               |                                                                  | $                            | 0.02        |          |           | $       | 0.25        |          |           | $       | 1.50        |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 | Weighted average Common Shares outstanding                                          |                                                                  |                              | 403,147,751 |          |           |         | 400,755,733 |          |           |         | 401,016,093 |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Earnings per share  diluted:                                                                                                                                                    |                                                                                     |                                                                  |                              |             |          |           |         |             |          |           |         |            
|                                                                                                                                                                                 | Income from continuing operations per share                                         |                                                                  | $                            | 0.38        |          |           | $       | 0.50        |          |           | $       | 1.00        |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 | Net income available to common shareholders per share                               |                                                                  | $                            | 0.02        |          |           | $       | 0.24        |          |           | $       | 1.50        |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|                                                                                                                                                                                 | Weighted average Common Shares outstanding and dilutive
    potential common shares |                                                                  |                              | 452,046,455 |          |           |         | 450,997,247 |          |           |         | 452,561,353 |         
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         
|Distributions declared per Common Share outstanding                                                                                                                              |                                                                                     | $                                                                | 2.00                         |             |          | $         | 2.00    |             |          | $         | 2.00    |            
|                                                                                                                                                                                 |                                                                                     |                                                                  |                              |             |          |           |         |             |         



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##### Table of Contents



EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY


|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |          |  
|------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | ---------- | -------- | ---- | - | ---------- | -------- | - | - | ---------- | -------- | -
|                                                 |                                                                                                                                                                 | For the years ended December 31, |           
|                                                 |                                                                                                                                                                 |                                  |           
|                                                 |                                                                                                                                                                 | 2005                             |            |          | 2004 |   |            | 2003     |  
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|                                                 |                                                                                                                                                                 | (Dollars in thousands)           |           
|Mandatorily Redeemable Preferred Shares:         |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |         
|Balance, beginning of period                     |                                                                                                                                                                 | $                                | 299,500    |          |      | $ | 299,500    |          |   | $ | 299,500    |         
|                                                 | Conversion of Series B Cumulative Redeemable Preferred
    Shares to Common Shares                                                                              |                                  |            | (3       | )    |   |            |         |   |   |            |         |  
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Balance, end of period                           |                                                                                                                                                                 | $                                | 299,497    |          |      | $ | 299,500    |          |   | $ | 299,500    |         
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Preferred Shares:                                |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |         
|Balance, beginning of period                     |                                                                                                                                                                 | $                                | 212,500    |          |      | $ | 326,573    |          |   | $ | 576,573    |         
|                                                 | Redemptions                                                                                                                                                     |                                  |            |         |      |   |            | (114,073 | ) |   |            | (250,000 | )
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Balance, end of period                           |                                                                                                                                                                 | $                                | 212,500    |          |      | $ | 212,500    |          |   | $ | 326,573    |         
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Common Shares, $0.01 par Value Per Share:        |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |         
|Balance, beginning of period                     |                                                                                                                                                                 | $                                | 4,038      |          |      | $ | 4,005      |          |   | $ | 4,112      |         
|                                                 | Issuance of Common Shares through exercise of share options                                                                                                     |                                  |            | 53       |      |   |            | 24       |   |   |            | 16       |  
|                                                 | Issuance of Common Shares in exchange for Units                                                                                                                 |                                  |            | 21       |      |   |            | 14       |   |   |            | 10       |  
|                                                 | Common Shares issued for restricted shares, trustee fees and for
    the dividend reinvestment plan, net of restricted shares
    retired, net of cancellations |                                  |            | 8        |      |   |            | 9        |   |   |            | 9        |  
|                                                 | Common Shares repurchased                                                                                                                                       |                                  |            | (313     | )    |   |            | (14      | ) |   |            | (142     | )
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Balance, end of period                           |                                                                                                                                                                 | $                                | 3,807      |          |      | $ | 4,038      |          |   | $ | 4,005      |         
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Additional Paid in Capital:                      |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |         
|Balance, beginning of period                     |                                                                                                                                                                 | $                                | 10,479,305 |          |      | $ | 10,396,864 |          |   | $ | 10,691,610 |         
|                                                 | Issuance of Common Shares through exercise of share options                                                                                                     |                                  |            | 141,929  |      |   |            | 59,245   |   |   |            | 37,728   |  
|                                                 | Issuance of Common Shares in exchange for Units                                                                                                                 |                                  |            | 56,351   |      |   |            | 37,491   |   |   |            | 23,855   |  
|                                                 | Common Shares issued for restricted shares, trustee fees and for
    the dividend reinvestment plan, net of restricted shares
    retired, net of cancellations |                                  |            | (1,073   | )    |   |            | 2,473    |   |   |            | (9       | )
|                                                 | Offering costs                                                                                                                                                  |                                  |            | (92      | )    |   |            | (84      | ) |   |            | (257     | )
|                                                 | Amortization of offering costs                                                                                                                                  |                                  |            | 2,611    |      |   |            | 6,737    |   |   |            |         |  
|                                                 | Common Shares repurchased                                                                                                                                       |                                  |            | (958,816 | )    |   |            | (37,760  | ) |   |            | (363,344 | )
|                                                 | Compensation expense related to restricted shares and stock
    options issued to employees                                                                     |                                  |            | 22,504   |      |   |            | 13,992   |   |   |            | 7,500    |  
|                                                 | Adjustment for minority interests ownership in EOP Partnership                                                                                                  |                                  |            | 3,100    |      |   |            | 347      |   |   |            | (219     | )
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Balance, end of period                           |                                                                                                                                                                 | $                                | 9,745,819  |          |      | $ | 10,479,305 |          |   | $ | 10,396,864 |         
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Deferred Compensation:                           |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |         
|Balance, beginning of period                     |                                                                                                                                                                 | $                                | (1,916     | )        |      | $ | (5,889     | )        |   | $ | (15,472    | )       
|                                                 | Amortization of restricted shares                                                                                                                               |                                  |            | 1,383    |      |   |            | 3,973    |   |   |            | 9,583    |  
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Balance, end of period                           |                                                                                                                                                                 | $                                | (533       | )        |      | $ | (1,916     | )        |   | $ | (5,889     | )       
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Distributions in Excess of Accumulated Earnings: |                                                                                                                                                                 |                                  |            |          |      |   |            |          |   |   |            |         
|Balance, beginning of period                     |                                                                                                                                                                 | $                                | (1,359,722 | )        |      | $ | (652,036   | )        |   | $ | (452,636   | )       
|                                                 | Net income                                                                                                                                                      |                                  |            | 42,939   |      |   |            | 137,307  |   |   |            | 655,062  |  
|                                                 | Preferred distributions                                                                                                                                         |                                  |            | (34,803  | )    |   |            | (39,093  | ) |   |            | (51,872  | )
|                                                 | Distributions to common shareholders                                                                                                                            |                                  |            | (805,041 | )    |   |            | (805,900 | ) |   |            | (802,590 | )
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  
|Balance, end of period                           |                                                                                                                                                                 | $                                | (2,156,627 | )        |      | $ | (1,359,722 | )        |   | $ | (652,036   | )       
|                                                 |                                                                                                                                                                 |                                  |            |          |      |   |            |          |  



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EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED STATEMENTS OF NET COMPREHENSIVE INCOME


|                                   |                                                                                                      |                                  |        |       |      |   |         |         |   |   |         |        |  
|---------------------------------- | ---------------------------------------------------------------------------------------------------- | -------------------------------- | ------ | ----- | ---- | - | ------- | ------- | - | - | ------- | ------ | -
|                                   |                                                                                                      | For the years ended December 31, |       
|                                   |                                                                                                      |                                  |       
|                                   |                                                                                                      | 2005                             |        |       | 2004 |   |         | 2003    |  
|                                   |                                                                                                      |                                  |        |       |      |   |         |         |  
|                                   |                                                                                                      | (Dollars in thousands)           |       
|Net income                         |                                                                                                      | $                                | 42,939 |       |      | $ | 137,307 |         |   | $ | 655,062 |       
|Other comprehensive income (loss): |                                                                                                      |                                  |        |       |      |   |         |         |   |   |         |       
|                                   | Unrealized holding (losses) gains on forward starting interest
    rate swaps                        |                                  |        |      |      |   |         | (34,665 | ) |   |         | 8,930  |  
|                                   | Reversal of unrealized holding loss (gain) on settlement of
    forward starting interest rate swaps |                                  |        |      |      |   |         | 45,115  |   |   |         | (768   | )
|                                   | (Payments) proceeds from settlement of forward starting interest
    rate swaps                      |                                  |        |      |      |   |         | (69,130 | ) |   |         | 768    |  
|                                   | Reclassification of ineffective portion of swap settlement
    payment to net income                 |                                  |        |      |      |   |         | 212     |   |   |         |       |  
|                                   | Amortization of payments (proceeds) from settlement of
    forward starting interest rate swaps      |                                  |        | 6,815 |      |   |         | 5,206   |   |   |         | (73    | )
|                                   | Unrealized holding (losses) gains from investments arising
    during the year                       |                                  |        | (250  | )    |   |         | 23      |   |   |         | 848    |  
|                                   | Reclassification adjustment for realized (gains) included
    in net income                          |                                  |        |      |      |   |         | (31     | ) |   |         | (1,142 | )
|                                   |                                                                                                      |                                  |        |       |      |   |         |         |  
|Net comprehensive income           |                                                                                                      | $                                | 49,504 |       |      | $ | 84,037  |         |   | $ | 663,625 |       
|                                   |                                                                                                      |                                  |        |       |      |   |         |         |  



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EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                      |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |         |         |           |           |          |         |           | 
|--------------------- | --------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ---------------------------------------------------- | ------- | ------- | ------- | -------- | ------- | ------- | --------- | --------- | -------- | ------- | --------- | 
|                      |                                                                                                                       | For the years ended December 31,                                                                                              |                                                             
|                      |                                                                                                                       |                                                                                                                               |                                                             
|                      |                                                                                                                       | 2005                                                                                                                          |                                                              |                                                      | 2004    |         |         | 2003     |        
|                      |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |        
|                      |                                                                                                                       | (Dollars in thousands)                                                                                                        |                                                             
|Operating Activities: |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |         |         |           |          
|                      | Net income                                                                                                            |                                                                                                                               | $                                                            | 42,939                                               |         |         | $       | 137,307  |         |         | $         | 655,062   |         
|                      | Adjustments to reconcile net income to net cash provided by
    operating activities:                                 |                                                                                                                               |                                                              |                                                      |         |         |         |          |         |         |           |           |         
|                      |                                                                                                                       | Depreciation and amortization (including discontinued operations)                                                             |                                                              |                                                      | 818,172 |         |         |          | 806,620 |         |           |           | 716,773  |        
|                      |                                                                                                                       | Compensation expense related to restricted shares and stock
    options                                                       |                                                              |                                                      | 23,887  |         |         |          | 17,965  |         |           |           | 17,094   |        
|                      |                                                                                                                       | Income from investments in unconsolidated joint ventures                                                                      |                                                              |                                                      | (68,996 | )       |         |          | (50,304 | )       |           |           | (79,882  | )      
|                      |                                                                                                                       | Net distributions from unconsolidated joint ventures                                                                          |                                                              |                                                      | 52,690  |         |         |          | 66,829  |         |           |           | 87,268   |        
|                      |                                                                                                                       | Net (gain) on sales of real estate and provision for loss
    on properties held for sale (including discontinued operations) |                                                              |                                                      | (24,226 | )       |         |          | (27,374 | )       |           |           | (161,063 | )      
|                      |                                                                                                                       | Impairment (including discontinued operations)                                                                                |                                                              |                                                      | 219,003 |         |         |          | 229,170 |         |           |           | 7,500    |        
|                      |                                                                                                                       | Cumulative effect of a change in accounting principle                                                                         |                                                              |                                                      |        |         |         |          | 33,697  |         |           |           |         |        
|                      |                                                                                                                       | Provision for doubtful accounts                                                                                               |                                                              |                                                      | 6,428   |         |         |          | 5,455   |         |           |           | 12,803   |        
|                      |                                                                                                                       | Income allocated to minority interests (including discontinued
    operations)                                                |                                                              |                                                      | 41,097  |         |         |          | 22,940  |         |           |           | 82,268   |        
|                      |                                                                                                                       | Other                                                                                                                         |                                                              |                                                      | 448     |         |         |          | (2,090  | )       |           |           |         |        
|                      |                                                                                                                       | Changes in assets and liabilities:                                                                                            |                                                              |                                                      |         |         |         |          |         |         |           |           |          |        
|                      |                                                                                                                       |                                                                                                                               | (Increase) decrease in rent receivable                       |                                                      |         | (21,933 | )       |          |         | 7,289   |           |           |          | (6,893  | )        
|                      |                                                                                                                       |                                                                                                                               | (Increase) in deferred rent receivable                       |                                                      |         | (63,455 | )       |          |         | (88,651 | )         |           |          | (72,240 | )        
|                      |                                                                                                                       |                                                                                                                               | (Increase) decrease in prepaid expenses and other assets     |                                                      |         | (34,580 | )       |          |         | 49,824  |           |           |          | (8,409  | )        
|                      |                                                                                                                       |                                                                                                                               | Increase (decrease) in accounts payable and accrued expenses |                                                      |         | 2,222   |         |          |         | (7,659  | )         |           |          | (17,487 | )        
|                      |                                                                                                                       |                                                                                                                               | (Decrease) increase in other liabilities                     |                                                      |         | (5,706  | )       |          |         | 6,949   |           |           |          | (13,223 | )        
|                      |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |        
|                      |                                                                                                                       |                                                                                                                               |                                                              | Net cash provided by operating activities            |         |         | 987,990 |          |         |         | 1,207,967 |           |          |         | 1,219,571 | 
|                      |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |        
|Investing Activities: |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |         |         |           |          
|                      | Property acquisitions (including deposits made for property
    acquisitions)                                         |                                                                                                                               |                                                              | (1,266,584                                           | )       |         |         | (472,053 | )       |         |           | (189,415  | )       
|                      | Property dispositions (including deposits received for property
    dispositions)                                     |                                                                                                                               |                                                              | 1,828,954                                            |         |         |         | 414,256  |         |         |           | 1,345,554 |         
|                      | Distributions from (investments in) unconsolidated joint
    ventures related to disposition and acquisition activity |                                                                                                                               |                                                              | 89,961                                               |         |         |         | (220,833 | )       |         |           | 24,854    |         
|                      | Distributions from unconsolidated joint ventures related to
    mortgage financings                                   |                                                                                                                               |                                                              | 148,278                                              |         |         |         | 16,820   |         |         |           | 29,512    |         
|                      | Capital and tenant improvements (including development costs)                                                         |                                                                                                                               |                                                              | (370,595                                             | )       |         |         | (453,227 | )       |         |           | (438,601  | )       
|                      | Lease commissions and other costs                                                                                     |                                                                                                                               |                                                              | (122,724                                             | )       |         |         | (123,037 | )       |         |           | (138,979  | )       
|                      | Sale of investment in CT Convertible Trust I preferred
    shares                                                     |                                                                                                                               |                                                              |                                                     |         |         |         | 32,089   |         |         |           |          |         
|                      | Decrease in escrow deposits and restricted cash                                                                       |                                                                                                                               |                                                              | 664,123                                              |         |         |         | 124,167  |         |         |           | 23,329    |         
|                      | Investments in notes receivable                                                                                       |                                                                                                                               |                                                              | (50,000                                              | )       |         |         | (3,515   | )       |         |           |          |         
|                      | Repayments of notes receivable                                                                                        |                                                                                                                               |                                                              |                                                     |         |         |         |         |         |         |           | 1,299     |         
|                      |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |        
|                      |                                                                                                                       |                                                                                                                               |                                                              | Net cash provided by (used for) investing activities |         |         | 921,413 |          |         |         | (685,333  | )         |          |         | 657,553   | 
|                      |                                                                                                                       |                                                                                                                               |                                                              |                                                      |         |         |         |          |        

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EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (continued)


|                      |                                                                         |                                          |   |             |            |   |   |            |          |   |   |            |            |  
|--------------------- | ----------------------------------------------------------------------- | ---------------------------------------- | - | ----------- | ---------- | - | - | ---------- | -------- | - | - | ---------- | ---------- | -
|                      |                                                                         | For the years ended December 31,         |  
|                      |                                                                         |                                          |  
|                      |                                                                         | 2005                                     |   |             | 2004       |   |   | 2003       |         
|                      |                                                                         |                                          |   |             |            |   |   |            |         
|                      |                                                                         | (Dollars in thousands)                   |  
|Financing Activities: |                                                                         |                                          |   |             |            |   |   |            |          |   |   |           
|                      | Proceeds from mortgage debt                                             |                                          |   | 518,855     |            |   |   |           |          |   |   |           |           
|                      | Principal payments on mortgage debt                                     |                                          |   | (1,077,322  | )          |   |   | (438,828   | )        |   |   | (233,809   | )         
|                      | Proceeds from unsecured notes                                           |                                          |   | 40,549      |            |   |   | 2,061,979  |          |   |   | 494,810    |           
|                      | Repayment of unsecured notes                                            |                                          |   | (675,000    | )          |   |   | (1,205,000 | )        |   |   | (700,000   | )         
|                      | Proceeds from lines of credit                                           |                                          |   | 13,867,270  |            |   |   | 6,123,300  |          |   |   | 5,215,400  |           
|                      | Repayment of lines of credit                                            |                                          |   | (12,784,270 | )          |   |   | (5,909,300 | )        |   |   | (5,087,100 | )         
|                      | Payments of loan costs and offering costs                               |                                          |   | (8,920      | )          |   |   | (3,004     | )        |   |   | (8,935     | )         
|                      | Settlement of interest rate swap agreements                             |                                          |   | (8,677      | )          |   |   | (69,130    | )        |   |   | 768        |           
|                      | (Distributions to) minority interests in partially owned
    properties |                                          |   | (11,208     | )          |   |   | (12,810    | )        |   |   | (10,062    | )         
|                      | Proceeds from exercise of stock options                                 |                                          |   | 141,982     |            |   |   | 59,269     |          |   |   | 37,744     |           
|                      | Distributions to common shareholders and unitholders                    |                                          |   | (893,779    | )          |   |   | (902,865   | )        |   |   | (901,259   | )         
|                      | Repurchase of Common Shares                                             |                                          |   | (959,129    | )          |   |   | (37,774    | )        |   |   | (363,486   | )         
|                      | Redemption of Units                                                     |                                          |   | (56,525     | )          |   |   | (3,904     | )        |   |   | (6,427     | )         
|                      | Repurchase of preferred shares                                          |                                          |   |            |            |   |   | (114,073   | )        |   |   | (250,000   | )         
|                      | Payment of preferred distributions                                      |                                          |   | (32,191     | )          |   |   | (32,766    | )        |   |   | (53,841    | )         
|                      |                                                                         |                                          |   |             |            |   |   |            |         
|                      |                                                                         | Net cash (used for) financing activities |   |             | (1,938,365 | ) |   |            | (484,906 | ) |   |            | (1,866,197 | )
|                      |                                                                         |                                          |   |             |            |   |   |            |         
|                      | Net (decrease) increase in cash and cash equivalents                    |                                          |   | (28,962     | )          |   |   | 37,728     |          |   |   | 10,927     |           
|                      | Cash and cash equivalents at the beginning of the year                  |                                          |   | 107,126     |            |   |   | 69,398     |          |   |   | 58,471     |           
|                      |                                                                         |                                          |   |             |            |   |   |            |         
|                      | Cash and cash equivalents at the end of the year                        |                                          | $ | 78,164      |            |   | $ | 107,126    |          |   | $ | 69,398     |           
|                      |                                                                         |                                          |   |             |            |   |   |            |         

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EQUITY OFFICE PROPERTIES TRUST


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (continued)


|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |          |          |   |         |         |          |  
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | ------- | -------- | ------- | - | ------- | -------- | -------- | - | ------- | ------- | -------- | -
|                                             |                                                                                                                                                       | For the years ended December 31,                                                                                                                 |                                                                  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                  
|                                             |                                                                                                                                                       | 2005                                                                                                                                             |                                                                   |         | 2004     |         |   | 2003    |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | (Dollars in thousands)                                                                                                                           |                                                                  
|Supplemental Information:                    |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |          |          |   |        
|                                             | Interest paid during the period, including a reduction of
    interest expense for capitalized interest of $441, $4,648 and
    $10,089, respectively |                                                                                                                                                  | $                                                                 | 829,209 |          |         | $ | 824,289 |          |          | $ | 849,337 |        
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|Non-Cash Investing and Financing Activities: |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |          |          |   |        
|                                             | Investing Activities:                                                                                                                                 |                                                                                                                                                  |                                                                   |         |          |         |   |         |          |          |   |         |        
|                                             |                                                                                                                                                       | Escrow deposits used for property acquisitions                                                                                                   |                                                                   | $       |         |         |   | $       | 36,541   |          |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Escrow deposits related to property dispositions                                                                                                 |                                                                   | $       | (639,439 | )       |   | $       | (117,144 | )        |   | $       | (69,330 | )       
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Mortgage loan repayment as a result of a property disposition
    (including prepayment expense of $375 in the year ended
    December 31, 2004) |                                                                   | $       | (13,386  | )       |   | $       | (5,830   | )        |   | $       | (16,279 | )       
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Mortgage loan assumed upon acquisition of property                                                                                               |                                                                   | $       | 118,487  |         |   | $       | 82,970   |          |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Mortgage loan assumed upon consolidation of property                                                                                             |                                                                   | $       |         |         |   | $       |         |          |   | $       | 59,166  |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Loan issued in connection with a property disposition                                                                                            |                                                                   | $       | (66,300  | )       |   | $       |         |          |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Units issued in connection with a property acquisition                                                                                           |                                                                   | $       | 3,339    |         |   | $       | 50       |          |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Changes in accounts due to a like-kind exchange:                                                                                                 |                                                                   |         |          |         |   |         |          |          |   |         |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Increase in investment in real estate due to property acquisition |         | $        |        |   |         | $        | 130,203  |   |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in investment in real estate due to property disposition |         | $        |        |   |         | $        | (130,865 | ) |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in accumulated depreciation                              |         | $        |        |   |         | $        | 9,137    |   |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in other assets and liabilities                          |         | $        |        |   |         | $        | (1,770   | ) |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Changes in accounts due to consolidation of existing interest in
    a property as a result of acquiring the remaining economic
    interest:    |                                                                   |         |          |         |   |         |          |          |   |         |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in investment in unconsolidated joint ventures           |         | $        |        |   |         | $        | (157,659 | ) |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Increase in investment in real estate                             |         | $        |        |   |         | $        | 612,411  |   |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Increase in accumulated depreciation                              |         | $        |        |   |         | $        | (44,440  | ) |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Increase in mortgage debt                                         |         | $        |        |   |         | $        | (451,285 | ) |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Increase in other assets and liabilities                          |         | $        |        |   |         | $        | 40,973   |   |         | $       |         |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Changes in accounts due to partial sale of real estate:                                                                                          |                                                                   |         |          |         |   |         |          |          |   |         |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Increase in investment in unconsolidated joint ventures           |         | $        | 36,349  |   |         | $        | 18,445   |   |         | $       | 155,710  |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in investment in real estate                             |         | $        | (43,931 | ) |         | $        | (21,726  | ) |         | $       | (169,390 | )
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in accumulated depreciation                              |         | $        | 8,403   |   |         | $        | 4,310    |   |         | $       | 19,336   |  
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       |                                                                                                                                                  | Decrease in other assets and liabilities                          |         | $        | (940    | ) |         | $        | (1,030   | ) |         | $       | (4,460   | )
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             | Financing Activities:                                                                                                                                 |                                                                                                                                                  |                                                                   |         |          |         |   |         |          |          |   |         |        
|                                             |                                                                                                                                                       | Mortgage loan repayment as a result of a property disposition
    (including prepayment expense of $375 in the year ended
    December 31, 2004) |                                                                   | $       | 13,386   |         |   | $       | 5,830    |          |   | $       | 16,279  |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Mortgage loan assumed upon acquisition of property                                                                                               |                                                                   | $       | (118,487 | )       |   | $       | (82,970  | )        |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Mortgage loan assumed upon consolidation of property                                                                                             |                                                                   | $       |         |         |   | $       |         |          |   | $       | (59,166 | )       
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Loan issued in connection with a property disposition                                                                                            |                                                                   | $       | 66,300   |         |   | $       |         |          |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         
|                                             |                                                                                                                                                       | Units issued in connection with a property acquisition                                                                                           |                                                                   | $       | (3,339   | )       |   | $       | (50      | )        |   | $       |        |         
|                                             |                                                                                                                                                       |                                                                                                                                                  |                                                                   |         |          |         |   |         |         



76



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|         |                          
|-------- | -------------------------
|NOTE 1  | BUSINESS OF EQUITY OFFICE

10-K




|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |            |            |  |  |            |             | 
|----------------------------- | ----- | --------- | --- | ---------------------- | ----------- |  | -------------------------- | ----------- |  | -------- | ----------- | ----------- |  | ----------- | ---------- | ---------- |  |  | ---------- | ----------- | 
|                              |       |           |     | Total Office Portfolio |             |  | Effective Office Portfolio |            
|                              |       |           |     |                        |             |  |                            |            
|                              |       | Number of |     |                        | Occupied    |  |                            |             |  | Occupied |             |             | 
|                              |       | Buildings |     |                        | Square Feet |  |                            | Square Feet |  |          | Square Feet |             |  | Square Feet |           
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Wholly-Owned Properties       |       |           | 562 |                        |             |  | 77,309,801                 |             |  |          | 85,927,640  |             |  |             | 77,309,801 |            |  |  | 85,927,640 |            
|Consolidated Joint Ventures   |       |           | 22  |                        |             |  | 10,585,857                 |             |  |          | 11,143,588  |             |  |             | 9,529,373  |            |  |  | 9,983,557  |            
|Unconsolidated Joint Ventures |       |           | 38  |                        |             |  | 12,990,416                 |             |  |          | 14,437,825  |             |  |             | 5,146,371  |            |  |  | 5,797,094  |            
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|                              | Total |           |     | 622                    |             |  |                            | 100,886,074 |  |          |             | 111,509,053 |  |             |            | 91,985,545 |  |  |            | 101,708,291 | 
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Percent Occupied              |       |           |     |                        |             |  | 90.5                       | %           |  |          |             |             |  |             | 90.4       | %          |  |  |            |            
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           
|Percent Leased                |       |           |     |                        |             |  | 91.8                       | %           |  |          |             |             |  |             | 91.9       | %          |  |  |            |            
|                              |       |           |     |                        |             |  |                            |             |  |          |             |             |  |             |           

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




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

Consolidation of
Variable Interest Entities


77



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)






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



|                       |  |                                                                        |             | 
|---------------------- |  | ---------------------------------------------------------------------- | ----------- | 
|Asset Category         |  | Estimated Useful Life                                                  |            
|                       |  |                                                                        |            
|Building               |  |                                                                        | 18-59 years | 
|Building improvements  |  |                                                                        | 3-40 years  | 
|Tenant improvements    |  | Shorter of the assets useful life or the non-cancelable term of lease
|Furniture and fixtures |  |                                                                        | 3-12 years  | 

Business Combinations




|     |       |                        |        |         | 
|---- | ----- | ---------------------- | ------ | ------- | 
|Year |       | (Dollars in thousands) |       
|     |       |                        |       
|2006 |       | $                      | 34,695 |        
|2007 |       |                        | 21,139 |        
|2008 |       |                        | 17,859 |        
|2009 |       |                        | 15,622 |        
|2010 |       |                        | 14,372 |        
|     |       |                        |       
|     | Total |                        | $      | 103,687 | 
|     |       |                        |       



78



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)








| |    |                                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) | calculate the fair value of assumed debt, if any;                                                                                                                                            
|
| | 2) | estimate the value of the real estate as if vacant
    or arrive at a go dark value as of the acquisition
    date;                                                                      
|
| | 3) | calculate the value of the property and allocate that value
    among land, building, building improvements and equipment and
    determine the associated useful life for each;             
|
| | 4) | calculate the value and associated life of the above and below
    market leases;                                                                                                            
|
| | 5) | calculate the value and associated life of tenant relationships,
    if any, by taking the direct identifiable benefits of the tenant
    relationship and discounting them to present value;
|
| | 6) | estimate the fair value of the in-place tenant improvements,
    legal costs and leasing commissions incurred in obtaining the
    leases and calculate the associated useful lives; and     
|
| | 7) | calculate the intangible value of the in-place leases and their
    associated useful lives.                                                                                                 

Accounting for the Impairment or Disposal of
Long Lived Assets






Investments in Unconsolidated Joint Ventures


step-up


79



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                             
|-------- | ------------------------------------------------------------
|NOTE 2  | SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES  (continued)

Deferred Leasing Costs


Investments in Real Estate


Deferred Financing Costs




Revenue Recognition






| |   |                                                        
| | - | -------------------------------------------------------
| |  | the agreement has been fully executed and delivered;   
|
| |  | services have been rendered;                           
|
| |  | the amount is fixed or determinable; and               
|
| |  | the collectibility of the amount is reasonably assured.

Rental
Revenues


straight-line


straight-line






| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | Whether the lease agreement specifies what or how the tenant
    improvement allowance is spent;                                           
|
| |  | Whether the tenant improvements are unique to the tenant or
    general-purpose in
    nature;                                             
|
| |  | Whether the ownership of the tenant improvements remains with
    the landlord or remains with the tenant at the end of the lease
    term;
|
| |  | Who bears substantial construction risk and cost of the tenant
    improvements.                                                           

80



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                             
|-------- | ------------------------------------------------------------
|NOTE 2  | SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES  (continued)

non-cancelable straight-line buy-out straight-line




| |                              
| | -----------------------------
| | Tenant Reimbursement Revenues





| |                 
| | ----------------
| | Parking Revenues





| |               
| | --------------
| | Other Revenues





| |                                
| | -------------------------------
| | Allowance for Doubtful Accounts





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





| |                                    
| | -----------------------------------
| | Escrow Deposits and Restricted Cash





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



81



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)




Accounting for Derivative Instruments and
Hedging Activities






| |                                   
| | ----------------------------------
| | Derivatives and Hedging Activities





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





82



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)






| |                                                                                
| | -------------------------------------------------------------------------------
| | Reconciliation Between Net Income and Estimated Taxable
    Income (Unaudited):

|                                                            |                                                                                 |                                  |         |          |      |   |         |          |   |   |         |          |  
|----------------------------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------- | ------- | -------- | ---- | - | ------- | -------- | - | - | ------- | -------- | -
|                                                            |                                                                                 | For the years ended December 31, |        
|                                                            |                                                                                 |                                  |        
|                                                            |                                                                                 | 2005                             |         |          | 2004 |   |         | 2003     |  
|                                                            |                                                                                 |                                  |         |          |      |   |         |          |  
|                                                            |                                                                                 | (Dollars in thousands)           |        
|Net income available to common shareholders                 |                                                                                 | $                                | 8,136   |          |      | $ | 98,214  |          |   | $ | 603,190 |         
|                                                            | Straight-line rent adjustments                                                  |                                  |         | (59,516  | )    |   |         | (80,374  | ) |   |         | (76,847  | )
|                                                            | Preferred distributions not deductible for tax                                  |                                  |         | 32,192   |      |   |         | 32,192   |   |   |         | 51,872   |  
|                                                            | Excess of tax gain over GAAP gain                                               |                                  |         | 270,532  |      |   |         | 78,268   |   |   |         | 232,299  |  
|                                                            | Excess of GAAP depreciation/amortization over tax
    depreciation/amortization |                                  |         | 395,669  |      |   |         | 360,840  |   |   |         | 230,182  |  
|                                                            | Other adjustments                                                               |                                  |         | (22,992  | )    |   |         | (50,580  | ) |   |         | (57,775  | )
|                                                            | Impairment                                                                      |                                  |         | 219,003  |      |   |         | 229,170  |   |   |         | 7,500    |  
|                                                            | Cumulative effect of a change in accounting principle                           |                                  |         |         |      |   |         | 33,697   |   |   |         |         |  
|                                                            | Net operating loss utilization                                                  |                                  |         |         |      |   |         |         |   |   |         | (69,199  | )
|                                                            |                                                                                 |                                  |         |          |      |   |         |          |  
|Taxable income                                              |                                                                                 |                                  | 843,024 |          |      |   | 701,427 |          |   |   | 921,222 |         
|                                                            | Less capital gains                                                              |                                  |         | (321,257 | )    |   |         | (119,329 | ) |   |         | (393,362 | )
|                                                            |                                                                                 |                                  |         |          |      |   |         |          |  
|Adjusted taxable income subject to 90% dividend requirement |                                                                                 | $                                | 521,767 |          |      | $ | 582,098 |          |   | $ | 527,860 |         
|                                                            |                                                                                 |                                  |         |          |      |   |         |          |  



| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | Reconciliation Between Cash Distributions Paid and
    Distributions Paid Deduction (Unaudited):

|                                               |  |                                  |         |  |      |   |         |      |  |   |         | 
|---------------------------------------------- |  | -------------------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                                               |  | For the years ended December 31, |        
|                                               |  |                                  |        
|                                               |  | 2005                             |         |  | 2004 |   |         | 2003 | 
|                                               |  |                                  |         |  |      |   |         |      | 
|                                               |  | (Dollars in thousands)           |        
|Cash dividends paid                            |  | $                                | 833,024 |  |      | $ | 831,580 |      |  | $ | 854,462 | 
|Less: Dividends designated to prior year       |  |                                  |        |  |      |   | (66,760 | )    |  |   |        | 
|Plus: Dividends designated from following year |  |                                  | 10,000  |  |      |   |        |      |  |   | 66,760  | 
|Less: Return of capital distributions          |  |                                  |        |  |      |   | (63,393 | )    |  |   |        | 
|                                               |  |                                  |         |  |      |   |         |      | 
|Dividends paid deduction                       |  | $                                | 843,024 |  |      | $ | 701,427 |      |  | $ | 921,222 | 
|                                               |  |                                  |         |  |      |   |         |      | 

83



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                             
|-------- | ------------------------------------------------------------
|NOTE 2  | SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES  (continued)



| |                                               
| | ----------------------------------------------
| | Characterization of Distributions (Unaudited):

|                               |  |                                  |         |  |      |  |       |      |  |   |         |  |  |   |       |   |   |   |         |  |  |  |       |  
|------------------------------ |  | -------------------------------- | ------- |  | ---- |  | ----- | ---- |  | - | ------- |  |  | - | ----- | - | - | - | ------- |  |  |  | ----- | -
|                               |  | For the years ended December 31, |        
|                               |  |                                  |        
|                               |  | 2005                             |         |  | 2004 |  |       | 2003 | 
|                               |  |                                  |         |  |      |  |       |      | 
|                               |  | $                                |         |  | %    |  |       | $    |  |   | %       |  |  | $ |       |   | % |  
|                               |  |                                  |         |  |      |  |       |      |  |   |         |  |  |   |       |   |   |  
|                               |  | (Dollars in thousands)           |        
|Ordinary income                |  | $                                | 489,096 |  |      |  | 61.0  | %    |  | $ | 614,358 |  |  |   | 76.9  | % |   | $ | 456,674 |  |  |  | 56.9  | %
|Qualified dividends            |  |                                  | 2,894   |  |      |  | 0.4   | %    |  |   | 7,308   |  |  |   | 0.9   | % |   |   | 3,210   |  |  |  | 0.4   | %
|Return of capital              |  |                                  |        |  |      |  |      | %    |  |   | 63,393  |  |  |   | 7.9   | % |   |   |        |  |  |  |      |  
|Capital gains                  |  |                                  | 192,670 |  |      |  | 24.1  | %    |  |   | 84,366  |  |  |   | 10.6  | % |   |   | 227,133 |  |  |  | 28.3  | %
|Unrecaptured section 1250 gain |  |                                  | 116,172 |  |      |  | 14.5  | %    |  |   | 29,963  |  |  |   | 3.7   | % |   |   | 115,573 |  |  |  | 14.4  | %
|                               |  |                                  |         |  |      |  |       |      |  |   |         |  |  |   |       |   |   |  
|Common distributions           |  |                                  | 800,832 |  |      |  | 100.0 | %    |  |   | 799,388 |  |  |   | 100.0 | % |   |   | 802,590 |  |  |  | 100.0 | %
|                               |  |                                  |         |  |      |  |       |      |  |   |         |  |  |   |       |   |   |  
|Preferred distributions        |  |                                  | 32,192  |  |      |  |       |      |  |   | 32,192  |  |  |   |       |   |   |   | 51,872  |  |  |  |       |  
|                               |  |                                  |         |  |      |  |       |      |  |   |         |  |  |   |       |   |   |  
|Total REIT distributions       |  | $                                | 833,024 |  |      |  |       |      |  | $ | 831,580 |  |  |   |       |   |   | $ | 854,462 |  |  |  |       |  
|                               |  |                                  |         |  |      |  |       |      |  |   |         |  |  |   |       |   |   |  



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



| |                
| | ---------------
| | EOP Partnership





| |                           
| | --------------------------
| | Partially Owned Properties



Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity 150-3,


84



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)








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





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





| |                                        
| | ---------------------------------------
| | Share Based Employee Compensation Plans

Accounting for
Stock-Based
Compensation Accounting for Stock-Based
Compensation  Transition and Disclosure 
an Amendment of FASB Statement No. 123




85



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)




|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |      |   |         |   |      | 
|---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | -------------------------------- | ------ | - | ---- | - | ------ | ---- | ---- | - | ------- | - | ---- | 
|                                                                                                                       |                                                        | For the years ended December 31, |       
|                                                                                                                       |                                                        |                                  |       
|                                                                                                                       |                                                        | 2005                             |        |   | 2004 |   |        | 2003 |     
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     
|                                                                                                                       |                                                        | (Dollars in thousands, except    |       
|                                                                                                                       |                                                        | per share amounts)               |       
|Historical net income available to common shareholders                                                                 |                                                        | $                                | 8,136  |   |      | $ | 98,214 |      |      | $ | 603,190 |  
|Add back compensation expense for share options included in
    historical net income available to common shareholders |                                                        |                                  | 6,758  |   |      |   | 5,150  |      |      |   | 2,907   |  
|Deduct compensation expense for share options determined under
    fair value based method                             |                                                        |                                  | (7,259 | ) |      |   | (9,493 | )    |      |   | (10,916 | )
|Allocation of net expense to minority interests in EOP
    Partnership                                                 |                                                        |                                  | 50     |   |      |   | 464    |      |      |   | 877     |  
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     
|Pro forma net income available to common shareholders                                                                  |                                                        | $                                | 7,685  |   |      | $ | 94,335 |      |      | $ | 596,058 |  
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     
|Earnings per share  basic:                                                                                            |                                                        |                                  |        |   |      |   |        |      |      |   |         |  
|                                                                                                                       | Historical net income available to common shareholders |                                  |        |   |      |   |        |      |      |   |         |   |     
|                                                                                                                       |                                                        | per share                        |        | $ | 0.02 |   |        | $    | 0.25 |   |         | $ | 1.50 | 
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     
|                                                                                                                       | Pro forma net income available to common shareholders  |                                  |        |   |      |   |        |      |      |   |         |   |     
|                                                                                                                       |                                                        | per share                        |        | $ | 0.02 |   |        | $    | 0.24 |   |         | $ | 1.49 | 
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     
|Earnings per share  diluted:                                                                                          |                                                        |                                  |        |   |      |   |        |      |      |   |         |  
|                                                                                                                       | Historical net income available to common shareholders |                                  |        |   |      |   |        |      |      |   |         |   |     
|                                                                                                                       |                                                        | per share                        |        | $ | 0.02 |   |        | $    | 0.24 |   |         | $ | 1.50 | 
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     
|                                                                                                                       | Pro forma net income available to common shareholders  |                                  |        |   |      |   |        |      |      |   |         |   |     
|                                                                                                                       |                                                        | per share                        |        | $ | 0.02 |   |        | $    | 0.23 |   |         | $ | 1.48 | 
|                                                                                                                       |                                                        |                                  |        |   |      |   |        |      |     

Impact of New Accounting Standards


Share-Based
Payment


04-5, Determining Whether a General Partner, or the General
Partners as a Group, Controls a Limited Partnership or Similar
Entity When the Limited Partners Have Certain Rights 04-5),


86



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (continued)


04-5


Accounting Changes and Error
Corrections  a replacement of APB Opinion No. 20
and FASB Statement No. 3


Accounting for Conditional Asset Retirement
Obligations  an interpretation of FASB Statement
No. 143 Accounting for Asset Retirement
Obligations,


NOTE 3  VARIABLE INTEREST ENTITIES




SunAmerica Center




87



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 3  VARIABLE INTEREST
ENTITIES  (continued)




|                                                                          |  |                        |          |     
|------------------------------------------------------------------------- |  | ---------------------- | -------- | ----
|                                                                          |  | (Dollars in thousands) |         
|                                                                          |  |                        |         
|Investment in real estate                                                 |  | $                      | 330,787  |     
|Accumulated depreciation                                                  |  | $                      | (31,219  | )   
|Mortgage debt                                                             |  | $                      | (203,225 | )   
|Net other assets and liabilities, including a net discount of
    $31,476 |  | $                      | (130,040 | )(a)






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | As of January 1, 2004, our joint venture partners
    share of the mezzanine-level debt of $49.7 million is
    recorded in other liabilities, which is net of a discount of
    $31.5 million. Interest expense on the $66 million
    face amount of the joint venture partners debt is accrued
    at 7.25% per annum and the discount is amortized to
    interest expense through the maturity of the mezzanine-level
    loan in 2014. The remaining debt of $15 million does not
    accrue interest.

Concar






|                                                |  |                        |         |  
|----------------------------------------------- |  | ---------------------- | ------- | -
|                                                |  | (Dollars in thousands) |        
|                                                |  |                        |        
|Investment in real estate                       |  | $                      | 53,154  |  
|Accumulated depreciation                        |  | $                      | (1,274  | )
|Investment in unconsolidated joint ventures     |  | $                      | (54,731 | )
|Minority Interests  partially owned properties |  | $                      | (3,054  | )
|Net other assets and liabilities                |  | $                      | 5,905   |  

88



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 4  INVESTMENTS IN REAL ESTATE




|                                                                             |                            |                                |            |            |            |   |            |            |            | 
|---------------------------------------------------------------------------- | -------------------------- | ------------------------------ | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | 
|                                                                             |                            | December 31,                   |           
|                                                                             |                            |                                |           
|                                                                             |                            | 2005                           |            |            | 2004       |  
|                                                                             |                            |                                |            |            |            |  
|                                                                             |                            | (Dollars in thousands)         |           
|Land                                                                         |                            | $                              | 2,673,797  |            |            | $ | 2,947,605  |           
|Land available for development                                               |                            |                                | 176,868    |            |            |   | 252,524    |           
|Buildings                                                                    |                            |                                | 18,311,143 |            |            |   | 20,082,105 |           
|Building improvements                                                        |                            |                                | 578,609    |            |            |   | 547,262    |           
|Tenant improvements                                                          |                            |                                | 1,290,239  |            |            |   | 1,173,684  |           
|Furniture and fixtures                                                       |                            |                                | 95,935     |            |            |   | 84,560     |           
|Developments in process                                                      |                            |                                | 567,129    |            |            |   | 40,492     |           
|Investment in real estate held for sale, net of accumulated
    depreciation |                            |                                | 75,211     |            |            |   | 163,390    |           
|                                                                             |                            |                                |            |            |            |  
|                                                                             | Investments in real estate |                                |            | 23,768,931 |            |   |            | 25,291,622 |           
|                                                                             | Accumulated depreciation   |                                |            | (3,336,789 | )          |   |            | (3,151,446 | )         
|                                                                             |                            |                                |            |            |            |  
|                                                                             |                            | Net investments in real estate |            | $          | 20,432,142 |   |            | $          | 22,140,176 | 
|                                                                             |                            |                                |            |            |            |  

89



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 4  INVESTMENTS IN REAL
ESTATE  (continued)




|                   |                                              |          |                  |             |              |           |  |                            |             |                        |  |                   |  |  |   |         | 
|------------------ | -------------------------------------------- | -------- | ---------------- | ----------- | ------------ | --------- |  | -------------------------- | ----------- | ---------------------- |  | ----------------- |  |  | - | ------- | 
|                   |                                              |          |                  |             |              |           |  | Effective Office Portfolio |            
|                   |                                              |          |                  | Acquisition |              | Number of |  |                            |             |                       
|Property           |                                              | Location |                  | Date        |              | Buildings |  |                            | Square Feet |                        |  | Purchase Price(a) | 
|                   |                                              |          |                  |             |              |           |  |                            |             |                        |  |                   | 
|                   |                                              |          |                  |             |              |           |  |                            |             | (Dollars in thousands) | 
|2005:              |                                              |          |                  |             |              |           |  |                            |             |                        |  |                   |  |  |   |        
|Office properties: |                                              |          |                  |             |              |           |  |                            |             |                        |  |                   |  |  |   |        
|                   | Summit at Douglas Ridge I                    |          | Roseville, CA    |             | January 21   |           |  | 1                          |             |                        |  | 92,941            |  |  | $ | 25,000  | 
|                   | Park 22                                      |          | Austin, TX       |             | March 22     |           |  | 3                          |             |                        |  | 203,716           |  |  |   | 35,650  | 
|                   | 11111 Sunset Hills Road (fka XO Building)(b) |          | Reston, VA       |             | May 4        |           |  | 1                          |             |                        |  | 216,469           |  |  |   | 50,700  | 
|                   | Summit at Douglas Ridge II(c)                |          | Roseville, CA    |             | May 20       |           |  |                           |             |                        |  |                  |  |  |   | 18,650  | 
|                   | Shorebreeze I & II(b)(d)                     |          | Redwood City, CA |             | June 9       |           |  | 2                          |             |                        |  | 230,853           |  |  |   | 56,500  | 
|                   | Research Park Plaza I & II                   |          | Austin, TX       |             | June 16      |           |  | 2                          |             |                        |  | 271,882           |  |  |   | 55,000  | 
|                   | Golden Gate Plaza                            |          | Novato, CA       |             | June 30      |           |  | 2                          |             |                        |  | 114,364           |  |  |   | 24,499  | 
|                   | Woodside Office Center                       |          | Novato, CA       |             | June 30      |           |  | 1                          |             |                        |  | 89,031            |  |  |   | 23,950  | 
|                   | 1179 North McDowell                          |          | Petaluma, CA     |             | June 30      |           |  | 1                          |             |                        |  | 53,846            |  |  |   | 9,200   | 
|                   | Parkway Plaza (fka 3850 & 3880 Brickway)     |          | Santa Rosa, CA   |             | June 30      |           |  | 2                          |             |                        |  | 126,585           |  |  |   | 23,734  | 
|                   | Oak Valley Business Center                   |          | Santa Rosa, CA   |             | June 30      |           |  | 3                          |             |                        |  | 129,523           |  |  |   | 24,450  | 
|                   | 25 Mall Road                                 |          | Burlington, MA   |             | July 7       |           |  | 1                          |             |                        |  | 277,647           |  |  |   | 54,750  | 
|                   | The Lakes                                    |          | Santa Rosa, CA   |             | July 19      |           |  | 5                          |             |                        |  | 135,332           |  |  |   | 21,505  | 
|                   | 333 Twin Dolphin Plaza                       |          | Redwood City, CA |             | July 28      |           |  | 1                          |             |                        |  | 185,285           |  |  |   | 52,700  | 
|                   | Stonebridge Plaza II                         |          | Austin, TX       |             | August 19    |           |  | 1                          |             |                        |  | 193,131           |  |  |   | 36,800  | 
|                   | Clocktower Square(e)                         |          | Palo Alto, CA    |             | September 27 |           |  | 4                          |             |                        |  | 97,133            |  |  |   | 41,250  | 
|                   | 1095 Avenue of the Americas(f)               |          | New York, NY     |             | September 29 |           |  |                           |             |                        |  |                  |  |  |   | 504,600 | 
|                   | 300 W. 6th Street                            |          | Austin, TX       |             | October 4    |           |  | 1                          |             |                        |  | 446,637           |  |  |   | 131,685 | 
|                   | Waterfall Towers(b)                          |          | Santa Rosa, CA   |             | October 11   |           |  | 3                          |             |                        |  | 90,671            |  |  |   | 16,800  | 
|                   | Redwood Business Park I(b)                   |          | Petaluma, CA     |             | October 28   |           |  | 4                          |             |                        |  | 101,201           |  |  |   | 16,531  | 

90



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 4  INVESTMENTS IN REAL
ESTATE  (continued)


|             |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |           |  |  |        | 
|------------ | ---------------------------------------------------- | ------------------------ | -------------- | ----------- | ----------- | --------- |  | -------------------------- | ----------- | ---------------------- |  | ----------------- | --------- |  |  | ------ | 
|             |                                                      |                          |                |             |             |           |  | Effective Office Portfolio |            
|             |                                                      |                          |                | Acquisition |             | Number of |  |                            |             |                       
|Property     |                                                      | Location                 |                | Date        |             | Buildings |  |                            | Square Feet |                        |  | Purchase Price(a) |          
|             |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |          
|             |                                                      |                          |                |             |             |           |  |                            |             | (Dollars in thousands) | 
|             | Redwood Business Park II(b)                          |                          | Petaluma, CA   |             | October 28  |           |  | 5                          |             |                        |  | 169,389           |           |  |  | 29,781 | 
|             | Redwood Business Park V(b)                           |                          | Petaluma, CA   |             | October 28  |           |  | 1                          |             |                        |  | 57,587            |           |  |  | 9,640  | 
|             | Fountaingrove I                                      |                          | Santa Rosa, CA |             | October 28  |           |  | 1                          |             |                        |  | 37,428            |           |  |  | 9,872  | 
|             | Redwood Business Park III (including vacant land)(b) |                          | Petaluma, CA   |             | November 2  |           |  | 2                          |             |                        |  | 144,000           |           |  |  | 26,648 | 
|             | Redwood Business Park IV (including vacant land)(b)  |                          | Petaluma, CA   |             | November 2  |           |  | 1                          |             |                        |  | 66,656            |           |  |  | 13,750 | 
|             | Parkpoint Business Center(b)                         |                          | Santa Rosa, CA |             | November 2  |           |  | 5                          |             |                        |  | 67,869            |           |  |  | 11,225 | 
|             | 211 Perimeter Center                                 |                          | Atlanta, GA    |             | November 10 |           |  | 1                          |             |                        |  | 225,447           |           |  |  | 43,500 | 
|             | Great Hills Plaza                                    |                          | Austin, TX     |             | December 21 |           |  | 1                          |             |                        |  | 135,333           |           |  |  | 16,240 | 
|             |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |          
|             |                                                      | Total office properties: |                |             | 55          |           |  |                            | 3,959,956   |                        |  |                   | 1,384,610 | 
|             |                                                      |                          |                |             |             |           |  |                            |             |                        | 
|Vacant land: |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |           |  |  |       
|             | Two Main Place                                       |                          | Portland, OR   |             | March 14    |           |  |                           |             |                        |  |                  |           |  |  | 7,600  | 
|             |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |          
|Other:       |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |           |  |  |       
|             | 375 Park Avenue Mezzanine Loan(g)                    |                          | New York, NY   |             | October 19  |           |  |                           |             |                        |  |                  |           |  |  | 50,000 | 
|             |                                                      |                          |                |             |             |           |  |                            |             |                        |  |                   |          
|             |                                                      | Total 2005 acquisitions: |                |             | 55          |           |  |                            | 3,959,956   |                        |  | $                 | 1,442,210 | 
|             |                                                      |                          |                |             |             |           |  |                            |             |                        | 

91



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 4  INVESTMENTS IN REAL
ESTATE  (continued)


|                   |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |         |  |   |         | 
|------------------ | ------------------------------------------ | ------------------------ | ------------------ | ----------- | -------------- | --------- |  | -------------------------- | ----------- | ---------------------- |  | ----------------- | ------- |  | - | ------- | 
|                   |                                            |                          |                    |             |                |           |  | Effective Office Portfolio |            
|                   |                                            |                          |                    | Acquisition |                | Number of |  |                            |             |                       
|Property           |                                            | Location                 |                    | Date        |                | Buildings |  |                            | Square Feet |                        |  | Purchase Price(a) |        
|                   |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |        
|                   |                                            |                          |                    |             |                |           |  |                            |             | (Dollars in thousands) | 
|2004:              |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |         |  |   |        
|Office properties: |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |         |  |   |        
|                   | 1301 Avenue of the Americas(h)             |                          | New York, NY       |             | February/April |           |  |                           |             |                        |  | 274,212           |         |  | $ | 151,132 | 
|                   | American Center                            |                          | Tysons Corner, VA |             | May 25         |           |  | 2                          |             |                        |  | 328,741           |         |  |   | 60,500  | 
|                   | 500 Orange Tower(i)                        |                          | Orange, CA         |             | May 25         |           |  |                           |             |                        |  |                  |         |  |   | 50      | 
|                   | Yahoo! Center
    (fka Colorado Center)(j) |                          | Santa Monica, CA   |             | July 30        |           |  | 6                          |             |                        |  | 545,545           |         |  |   | 221,785 | 
|                   | 717 Fifth Avenue(k)                        |                          | New York, NY       |             | September 8    |           |  | 1                          |             |                        |  | 323,984           |         |  |   | 160,500 | 
|                   | Olympus Corporate Centre                   |                          | Roseville, CA      |             | September 22   |           |  | 4                          |             |                        |  | 191,494           |         |  |   | 37,923  | 
|                   | Redstone Plaza(l)                          |                          | Newport Beach, CA  |             | September 23   |           |  | 2                          |             |                        |  | 166,562           |         |  |   | 38,000  | 
|                   | Commerce Plaza(l)                          |                          | Oakbrook, IL       |             | September 23   |           |  | 3                          |             |                        |  | 510,757           |         |  |   | 99,000  | 
|                   | 5800 & 6000 Meadows                        |                          | Lake Oswego, OR    |             | September 30   |           |  | 2                          |             |                        |  | 198,347           |         |  |   | 49,000  | 
|                   | La Jolla Executive Tower                   |                          | La Jolla, CA       |             | November 17    |           |  | 1                          |             |                        |  | 227,570           |         |  |   | 70,500  | 
|                   | Westech 360                                |                          | Austin, TX         |             | November 19    |           |  | 4                          |             |                        |  | 178,777           |         |  |   | 28,604  | 
|                   | Shoreline Office Center(e)                 |                          | Mill Valley, CA    |             | December 14    |           |  | 2                          |             |                        |  | 97,910            |         |  |   | 19,175  | 
|                   | Foundry Square II(m)                       |                          | San Francisco, CA  |             | December 30    |           |  |                           |             |                        |  | 60,129            |         |  |   | 2,700   | 
|                   |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |        
|                   |                                            | Total office properties: |                    |             | 27             |           |  |                            | 3,104,028   |                        |  |                   | 938,869 | 
|                   |                                            |                          |                    |             |                |           |  |                            |             |                        | 
|Vacant land:       |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |         |  |   |        
|                   | Station Oaks Landing                       |                          | Walnut Creek, CA   |             | January 14     |           |  |                           |             |                        |  |                  |         |  |   | 15      | 
|                   | Dulles Station(n)                          |                          | Herndon, VA        |             | September 15   |           |  |                           |             |                        |  |                  |         |  |   | 7,600   | 
|                   | La Jolla Centre III & IV                   |                          | San Diego, CA      |             | December 22    |           |  |                           |             |                        |  |                  |         |  |   | 5,526   | 
|                   |                                            |                          |                    |             |                |           |  |                            |             |                        |  |                   |        
|                   |                                            | Total vacant land:       |                    |             |               |           |  |                            |            |                        |  |                   | 13,141  | 
|                   |                                            |                          |                    |             |                |           |  |                            |             |                        | 
|                   |                                            | Total 2004 acquisitions: |                    |             | 27             |           |  |                            | 3,104,028   |                        |  | $                 | 952,010 | 
|                   |                                            |                          |                    |             |                |           |  |                            |             |                        | 

92



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 4  INVESTMENTS IN REAL
ESTATE  (continued)


|                   |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |         |  |   |         | 
|------------------ | --------------------------- | ------------------------ | ------------ | ----------- | ------------ | --------- |  | -------------------------- | ----------- | ---------------------- |  | ----------------- | ------- |  | - | ------- | 
|                   |                             |                          |              |             |              |           |  | Effective Office Portfolio |            
|                   |                             |                          |              | Acquisition |              | Number of |  |                            |             |                       
|Property           |                             | Location                 |              | Date        |              | Buildings |  |                            | Square Feet |                        |  | Purchase Price(a) |        
|                   |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |        
|                   |                             |                          |              |             |              |           |  |                            |             | (Dollars in thousands) | 
|2003:              |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |         |  |   |        
|Office properties: |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |         |  |   |        
|                   | The John Hancock Complex(o) |                          | Boston, MA   |             | May 21       |           |  |                           |             |                        |  |                  |         |  | $ | 25,132  | 
|                   | U.S. Bank Tower             |                          | Denver, CO   |             | August 12    |           |  | 1                          |             |                        |  | 485,902           |         |  |   | 80,200  | 
|                   | Key Center(p)               |                          | Bellevue, WA |             | September 10 |           |  |                           |             |                        |  | 94,586            |         |  |   | 15,600  | 
|                   | 225 West Santa Clara Street |                          | San Jose, CA |             | December 31  |           |  | 1                          |             |                        |  | 343,391           |         |  |   | 103,041 | 
|                   |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |        
|                   |                             | Total office properties: |              |             | 2            |           |  |                            | 923,879     |                        |  |                   | 223,973 | 
|                   |                             |                          |              |             |              |           |  |                            |             |                        | 
|Vacant land:       |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |         |  |   |        
|                   | Parkshore Plaza Phase V     |                          | Folsom, CA   |             | September 30 |           |  |                           |             |                        |  |                  |         |  |   | 3,423   | 
|                   |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |        
|Other:             |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |         |  |   |        
|                   | Riverside Centre Land       |                          | Portland, OR |             | August 15    |           |  |                           |             |                        |  |                  |         |  |   | 360     | 
|                   |                             |                          |              |             |              |           |  |                            |             |                        |  |                   |        
|                   |                             | Total 2003 acquisitions: |              |             | 2            |           |  |                            | 923,879     |                        |  | $                 | 227,756 | 
|                   |                             |                          |              |             |              |           |  |                            |             |                        | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The purchase price shown above represents the gross purchase
    price related to property acquisitions, of which
    $84.2 million, $85.3 million and $21.9 million
    were recorded to intangible assets during the years ended
    December 31, 2005, 2004 and 2003, respectively. The
    purchase price shown above for the year ended December 31,
    2004 also includes our share of the intangible assets associated
    with properties acquired in 2004 that we account for under the
    equity method, which was $20.1 million.
|   
|    |  | The allocations of the purchase prices and other costs related
    to the acquisition of tangible and intangible assets are
    estimates and are subject to adjustment within one year of the
    closing date of each respective acquisition.                                                                                                                                                                                                                                                                                              
|   
|(b) |  | The purchase price includes the assumption of the following
    mortgage debt:                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                          |       |                        |        |         |             |  |      |                |  |  |               |   |  |  |              |  | 
|------------------------- | ----- | ---------------------- | ------ | ------- | ----------- |  | ---- | -------------- |  |  | ------------- | - |  |  | ------------ |  | 
|Property                  |       | Principal Balance      |        |         | Coupon Rate |  |      | Effective Rate |  |  | Maturity Date |  
|                          |       |                        |        |         |             |  |      |                |  |  |               |  
|                          |       | (Dollars in thousands) |        |         |             |  |      |                | 
|11111 Sunset Hills Road   |       | $                      | 22,546 |         |             |  | 6.12 | %              |  |  | 4.97          | % |  |  | July 2008    | 
|Shorebreeze I & II        |       |                        | 22,428 |         |             |  | 4.19 | %              |  |  | 5.43          | % |  |  | March 2007   | 
|Waterfall Towers          |       |                        | 7,739  |         |             |  | 6.08 | %              |  |  | 5.58          | % |  |  | January 2013 | 
|Redwood Business Park I   |       |                        | 10,389 |         |             |  | 7.41 | %              |  |  | 5.87          | % |  |  | August 2011  | 
|Redwood Business Park II  |       |                        | 18,227 |         |             |  | 7.41 | %              |  |  | 5.86          | % |  |  | August 2011  | 
|Redwood Business Park V   |       |                        | 6,439  |         |             |  | 7.41 | %              |  |  | 5.85          | % |  |  | August 2011  | 
|Redwood Business Park III |       |                        | 15,096 |         |             |  | 7.46 | %              |  |  | 5.95          | % |  |  | August 2011  | 
|Redwood Business Park IV  |       |                        | 8,193  |         |             |  | 7.41 | %              |  |  | 5.92          | % |  |  | August 2011  | 
|Parkpoint Business Center |       |                        | 7,429  |         |             |  | 5.53 | %              |  |  | 5.62          | % |  |  | January 2015 | 
|                          |       |                        |        |         |             |  |      |                |  |  |               |  
|                          | Total |                        | $      | 118,486 |             |  |      |                |  |  |               |   |  |  |              |  | 
|                          |       |                        |        |         |             |  |      |                |  |  |               |  



| |  |                                                                                                                                            
| |  | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | The effective rates shown in the table above include the effects
    of recording the assumed debt at fair value and transaction
    costs.

93



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 4  INVESTMENTS IN REAL
ESTATE  (continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | Summit at Douglas Ridge II, which consists of one building
    comprising 93,349 square feet, is classified as a
    development property and, therefore, is not included in the
    total number of buildings or total square footage statistics.                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(d) |  | The purchase price for Shorebreeze I & II includes
    the issuance of 108,190 Units valued at $3.3 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(e) |  | This property is subject to a ground lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(f) |  | 1095 Avenue of the Americas, which consists of one building
    comprising 1,020,000 square feet, is classified as a
    development property and, therefore, is not included in the
    total number of buildings or total square footage statistics.                                                                                                                                                                                                                                                                                                                                                                                
|   
|(g) |  | In October 2005, we invested $50.0 million in junior
    mezzanine debt as part of a debt refinancing on the 375 Park
    Avenue property located in New York, NY. The mezzanine debt
    bears interest at a rate of 8.95% and matures in 2015. We
    account for this investment as a note receivable, which is
    included in Prepaid expenses and other assets on the
    consolidated balance sheet.                                                                                                                                                                                                                         
|   
|(h) |  | In 2004, we acquired certain partners interests in 1301
    Avenue of the Americas for $68.2 million and we assumed our
    partners share of the mortgage notes of
    $83.0 million. This property was previously accounted for
    under the equity method. As a result of these transactions, our
    economic interest in the joint venture is 100% and effective
    February 2004, we consolidated the property. The mortgage debt
    encumbering this property upon consolidation was
    $534.3 million.                                                                                                                  
|   
|(i) |  | In May 2004, we acquired our partners interest in the 500
    Orange office property by issuing 1,930 Units valued at $50,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(j) |  | In July 2004, we acquired a 50% interest in Yahoo! Center for
    $221.8 million and account for our investment under the
    equity method (see Note 7  Investments in
    Unconsolidated Joint Ventures).                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(k) |  | This property consists of both office and retail space. We
    acquired the office space, except for the fourth floor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(l) |  | These properties were acquired through a like-kind exchange
    transaction in which we disposed of certain industrial
    properties (see Note 5  Gains/ Losses on Sales
    of Real Estate, Provisions for Loss on Assets Held for Sale and
    Impairments).                                                                                                                                                                                                                                                                                                                                                                      
|   
|(m) |  | In December 2004, we acquired our partners 12.5% interest
    in Foundry Square II for $2.7 million. Following this
    transaction, we owned 100% of this property. We subsequently
    sold this property in 2005.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(n) |  | In September 2004, we acquired a 70% interest in Dulles Station
    for $7.6 million. We subsequently sold our interest in this
    joint venture in 2005 (see Note 14  Minority
    Interests in Partially Owned Properties).                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(o) |  | In May 2003, we acquired 8.1% of the equity in the joint venture
    that owns The John Hancock Complex in Boston, Massachusetts for
    $25.0 million. The investment in the joint venture is
    accounted for under the cost method of accounting because we own
    a noncontrolling interest in the property. Our investment is
    included in Prepaid expenses and other assets in the
    consolidated balance sheets. In 2005, we received
    $17.3 million of cash proceeds from additional mortgage
    financing placed on this property, which effectively reduced our
    book basis investment in the joint venture.
|   
|(p) |  | In September 2003, we acquired the remaining 20% equity interest
    in Key Center from Wright Runstad Associates Limited Partnership
    (WRALP) and affiliates in exchange for our 30%
    equity interest in WRALP and a cash payment by us of
    $7.9 million. This property was previously accounted for
    under the equity method. As a result of this acquisition,
    effective September 2003, we consolidated the property.                                                                                                                                                                                            

94



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                                                                      
|-------- | -----------------------------------------------------------------------------------------------------
|NOTE 5  | GAINS/LOSSES ON SALES OF REAL ESTATE, PROVISIONS FOR LOSS ON
    ASSETS HELD FOR SALE AND IMPAIRMENTS



| |                     
| | --------------------
| | Sales of Real Estate



|                                                 |                               |                                  |   |            |      |  |   |           |  |  |   |           | 
|------------------------------------------------ | ----------------------------- | -------------------------------- | - | ---------- | ---- |  | - | --------- |  |  | - | --------- | 
|                                                 |                               | For the years ended December 31, |  
|                                                 |                               |                                  |  
|                                                 |                               | 2005                             |   |            | 2004 |  |   | 2003      | 
|                                                 |                               |                                  |   |            |      |  |   |           | 
|Office Properties and Vacant Land Parcels(a)(b): |                               |                                  |   |            |      |  |   |           |  |  |   |          
|                                                 | Number of buildings           |                                  |   | 131        |      |  |   | 5         |  |  |   | 53        | 
|                                                 | Number of vacant land parcels |                                  |   | 5          |      |  |   | 1         |  |  |   | 4         | 
|                                                 | Effective Office Portfolio:   |                                  |   |            |      |  |   |           |  |  |   |           | 
|                                                 |                               |                                  |   |            |      |  |   |           | 
|                                                 | Square feet                   |                                  |   | 17,644,205 |      |  |   | 1,922,755 |  |  |   | 7,543,381 | 
|                                                 | Sales price (in thousands)    |                                  | $ | 2,736,505  |      |  | $ | 252,194   |  |  | $ | 1,517,779 | 
|Industrial Properties(c):                        |                               |                                  |   |            |      |  |   |           |  |  |   |          
|                                                 | Number of buildings           |                                  |   |           |      |  |   | 71        |  |  |   | 2         | 
|                                                 | Square feet                   |                                  |   |           |      |  |   | 5,125,622 |  |  |   | 216,900   | 
|                                                 | Sales price (in thousands)    |                                  |   |           |      |  | $ | 432,033   |  |  | $ | 11,850    | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The number of buildings sold during the years ended
    December 31, 2005, 2004 and 2003 exclude the sale of
    partial interests in two buildings, two buildings, and 13
    buildings, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | The number of buildings and square feet sold during the year
    ended December 31, 2005 excludes eight buildings comprising
    0.2 million square feet relating to properties previously
    taken out of service, which were no longer included in building
    and square footage statistics. Properties taken out of service
    represent office properties we are no longer attempting to lease
    and may be sold in the future or redeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    | The sales price shown for the year ended December 31, 2003
    also includes the disposition of 32 residential units,
    which are excluded from the number of buildings shown above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(b) | During the year ended December 31, 2004, we sold our 3%
    interest in an office property that we accounted for under the
    cost method. This property is excluded from the number of
    buildings and square feet shown above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(c) | Of the 71 industrial properties disposed of during 2004, 29 were
    sold in a single transaction to an unrelated party for
    $73.3 million in cash (before closing costs) and two office
    properties valued at $137.0 million for total consideration
    of $210.3 million (35% monetary/65% nonmonetary). The net
    book value of the 29 industrial properties sold was
    $198.0 million. This transaction was accounted for as a
    like-kind exchange transaction, which also included cash.
    Because the transaction included a monetary and nonmonetary
    component, we recognized a gain on sale of $3.6 million on
    the monetary portion of the transaction. The nonmonetary portion
    of this transaction yielded no gain or loss. The remaining book
    value of the industrial properties, or $130.0 million,
    represents the book value of the two office properties acquired
    in the transaction. The two office properties acquired are
    Commerce Plaza and Redstone Plaza, as further described in
    Note 4  Investments in Real Estate.

95



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                                                                                         
|-------- | ------------------------------------------------------------------------------------------------------------------------
|NOTE 5  | GAINS/ LOSSES ON SALES OF REAL ESTATE, PROVISIONS FOR LOSS ON
    ASSETS HELD FOR SALE AND
    IMPAIRMENTS  (continued)



| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Gains/ Losses on Sales of Real Estate, Provisions for Loss on
    Assets Held for Sale and Impairments



|                                                                                                       |                                                |                                  |         |          |          |   |         |          |          |   |        |         |        |  
|------------------------------------------------------------------------------------------------------ | ---------------------------------------------- | -------------------------------- | ------- | -------- | -------- | - | ------- | -------- | -------- | - | ------ | ------- | ------ | -
|                                                                                                       |                                                | For the years ended December 31, |        
|                                                                                                       |                                                |                                  |        
|                                                                                                       |                                                | 2005                             |         |          | 2004     |   |         | 2003     |         
|                                                                                                       |                                                |                                  |         |          |          |   |         |          |         
|                                                                                                       |                                                | (Dollars in thousands)           |        
|Gains on partial sales of real estate included in Income from
    Continuing Operations                |                                                | $                                | 46,308  |          |          | $ | 21,901  |          |          | $ | 99,110 |        
|Gain on sales of real estate included in Discontinued Operations                                       |                                                |                                  | 184,916 |          |          |   | 7,596   |          |          |   | 61,953 |        
|Minority interests share of gains on sales of real estate                                             |                                                |                                  | (29,699 | )        |          |   | (214    | )        |          |   |       |        
|Our share of gains on sales of real estate classified as income
    from unconsolidated joint ventures |                                                |                                  | 26,499  |          |          |   |        |          |          |   | 7,063  |        
|                                                                                                       |                                                |                                  |         |          |          |   |         |          |         
|                                                                                                       | Our share of the gains on sales of real estate |                                  | $       | 228,024  |          |   | $       | 29,283   |          |   | $      | 168,126 |       
|                                                                                                       |                                                |                                  |         |          |          |   |         |          |         
|Impairment on properties anticipated to be sold deducted from
    Income from Continuing Operations    |                                                | $                                | (65,738 | )        |          | $ | (38,534 | )        |          | $ |       |        
|Discontinued Operations:                                                                               |                                                |                                  |         |          |          |   |         |          |          |   |        |        
|                                                                                                       | Impairment on properties sold                  |                                  |         | (153,265 | )        |   |         | (190,636 | )        |   |        | (7,500  | )     
|                                                                                                       | Loss on properties sold                        |                                  |         | (169,566 | )        |   |         |         |          |   |        |        |       
|                                                                                                       | Provision for loss on properties held for sale |                                  |         | (37,432  | )        |   |         | (2,123   | )        |   |        |        |       
|                                                                                                       |                                                |                                  |         |          |          |   |         |          |         
|                                                                                                       |                                                | Total non-cash charge            |         | $        | (426,001 | ) |         | $        | (231,293 | ) |        | $       | (7,500 | )
|                                                                                                       |                                                |                                  |         |          |          |   |         |          |         

2005






2004




96



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 5  GAINS/ LOSSES ON SALES OF REAL
ESTATE, PROVISIONS FOR LOSS ON ASSETS HELD FOR SALE AND
IMPAIRMENTS  (continued)






2003






| |              
| | -------------
| | Deferred Gain

Accounting for Sales of Real Estate,




| |                         
| | ------------------------
| | Properties Held for Sale



|                         |  |          |                   |             |      |  |           |           |  |  |             |  |  |  |         | 
|------------------------ |  | -------- | ----------------- | ----------- | ---- |  | --------- | --------- |  |  | ----------- |  |  |  | ------- | 
|                         |  |          |                   |             |      |  |           | Effective | 
|                         |  |          |                   |             |      |  |           | Office    | 
|                         |  |          |                   |             |      |  |           | Portfolio | 
|                         |  |          |                   | Disposition |      |  | Number of |           |  |  |            
|Property                 |  | Location |                   |             | Date |  |           | Buildings |  |  | Square Feet | 
|                         |  |          |                   |             |      |  |           |           |  |  |             | 
|As of December 31, 2005: |  |          |                   |             |      |  |           |           |  |  |             |  |  |  |         | 
|120 Montgomery           |  |          | San Francisco, CA |             |      |  | 1/20/2006 |           |  |  | 1           |  |  |  | 430,523 | 
|3001 Stender Way(a)      |  |          | Santa Clara, CA   |             |      |  | (a)       |           |  |  | 1           |  |  |  | 61,825  | 
|8-16 Perimeter           |  |          | Atlanta, GA       |             |      |  | 2/17/2006 |           |  |  | 5           |  |  |  | 65,350  | 
|                         |  |          |                   |             |      |  |           |           |  |  |             | 
|                         |  |          |                   |             |      |  | Total     |           |  |  | 7           |  |  |  | 557,698 | 
|                         |  |          |                   |             |      |  |           |           |  |  |             | 
|As of December 31, 2004: |  |          |                   |             |      |  |           |           |  |  |             |  |  |  |         | 
|Northland Plaza          |  |          | Bloomington, MN   |             |      |  | 1/4/2005  |           |  |  | 1           |  |  |  | 296,967 | 






|    |  |                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------
|(a) |  | This disposition is subject to certain contingencies and is
    expected to close in the first quarter of 2006.

97



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                                                                                         
|-------- | ------------------------------------------------------------------------------------------------------------------------
|NOTE 5  | GAINS/ LOSSES ON SALES OF REAL ESTATE, PROVISIONS FOR LOSS ON
    ASSETS HELD FOR SALE AND
    IMPAIRMENTS  (continued)



|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |         |         |         |         |         |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------- | ----------------------- | ------- | ------- | -------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | 
|                                                                                                                                                                    |                                                                                           | For the years ended December 31, |                        
|                                                                                                                                                                    |                                                                                           |                                  |                        
|                                                                                                                                                                    |                                                                                           | 2005                             |                         |         | 2004    |          |         | 2003    |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|                                                                                                                                                                    |                                                                                           | (Dollars in thousands)           |                        
|Property operating revenues                                                                                                                                         |                                                                                           | $                                | 161,969                 |         |         | $        | 354,788 |         |         | $       | 453,641 |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|Expenses:                                                                                                                                                           |                                                                                           |                                  |                         |         |         |          |         |         |         |         |         |        
|                                                                                                                                                                    | Depreciation and amortization                                                             |                                  |                         | 47,676  |         |          |         | 105,442 |         |         |         | 112,890 |        
|                                                                                                                                                                    | Property operating                                                                        |                                  |                         | 66,782  |         |          |         | 139,016 |         |         |         | 158,209 |        
|                                                                                                                                                                    | Ground rent                                                                               |                                  |                         | 2,413   |         |          |         | 4,555   |         |         |         | 78      |        
|                                                                                                                                                                    | Impairment                                                                                |                                  |                         | 153,265 |         |          |         | 190,636 |         |         |         | 7,500   |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|                                                                                                                                                                    |                                                                                           | Total expenses                   |                         |         | 270,136 |          |         |         | 439,649 |         |         |         | 278,677 |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|                                                                                                                                                                    |                                                                                           |                                  | Operating (loss) income |         |         | (108,167 | )       |         |         | (84,861 | )       |         |         | 174,964 | 
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|Other income (expense):                                                                                                                                             |                                                                                           |                                  |                         |         |         |          |         |         |         |         |         |        
|                                                                                                                                                                    | Interest income                                                                           |                                  |                         | 340     |         |          |         | 263     |         |         |         | 315     |        
|                                                                                                                                                                    | Interest expense and amortization of deferred financing costs
    and prepayment expenses |                                  |                         | (619    | )       |          |         | (2,717  | )       |         |         | (14,051 | )      
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|                                                                                                                                                                    |                                                                                           | Total other (expense) income     |                         |         | (279    | )        |         |         | (2,454  | )       |         |         | (13,736 | )      
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|(Loss) income before income taxes, allocations to minority
    interests, net gain on sales of real estate and provision for
    (loss) on properties held for sale |                                                                                           |                                  | (108,446                | )       |         |          | (87,315 | )       |         |         | 161,228 |        
|Income taxes                                                                                                                                                        |                                                                                           |                                  | (62                     | )       |         |          | (36     | )       |         |         | 123     |        
|(Income) loss allocated to minority interests 
    partially owned properties (including gain on sales of real
    estate of $29,699, $214 and $0, respectively)   |                                                                                           |                                  | (30,365                 | )       |         |          | (929    | )       |         |         | 1,155   |        
|Net gain on sales of real estate                                                                                                                                    |                                                                                           |                                  | 15,350                  |         |         |          | 7,596   |         |         |         | 61,953  |        
|Provision for (loss) on properties held for sale                                                                                                                    |                                                                                           |                                  | (37,432                 | )       |         |          | (2,123  | )       |         |         |        |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|Net (loss) income                                                                                                                                                   |                                                                                           | $                                | (160,955                | )       |         | $        | (82,807 | )       |         | $       | 224,459 |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        
|Property net operating income from discontinued operations                                                                                                          |                                                                                           | $                                | 95,187                  |         |         | $        | 215,772 |         |         | $       | 295,432 |        
|                                                                                                                                                                    |                                                                                           |                                  |                         |         |         |          |         |         |        





|         |                                                       
|-------- | ------------------------------------------------------
|NOTE 6  | REALIZED GAIN ON SETTLEMENT OF DERIVATIVES AND SALE OF

MARKETABLE SECURITIES


2004




98



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                                                                 
|-------- | ------------------------------------------------------------------------------------------------
|NOTE 6  | REALIZED GAIN ON SETTLEMENT OF DERIVATIVES AND SALE OF 
     MARKETABLE SECURITIES  (continued)





2003






|         |                                             
|-------- | --------------------------------------------
|NOTE 7  | INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES



|                                            |  |                   |  |                  |           |  |                  |                    |           |                    |  |  |       |   |  |  |       |  
|------------------------------------------- |  | ----------------- |  | ---------------- | --------- |  | ---------------- | ------------------ | --------- | ------------------ |  |  | ----- | - |  |  | ----- | -
|                                            |  |                   |  |                  |           |  |                  | Our                |          
|                                            |  |                   |  |                  |           |  |                  | Ownership Interest |          
|                                            |  |                   |  | Total            |           |  | Effective        |                    |           | as of December 31, | 
|                                            |  |                   |  | Office Portfolio |           |  | Office Portfolio |                    |           |                    | 
|Property                                    |  | Location          |  | Square Feet      |           |  | Square Feet      |                    |           | 2005               |  |  | 2004  |  
|                                            |  |                   |  |                  |           |  |                  |                    |           |                    |  |  |       |  
|One Post Office Square                      |  | Boston, MA        |  |                  | 765,296   |  |                  |                    | 382,648   |                    |  |  | 50    | % |  |  | 50    | %
|75-101 Federal Street                       |  | Boston, MA        |  |                  | 813,195   |  |                  |                    | 419,704   |                    |  |  | 51.61 | % |  |  | 51.61 | %
|Rowes Wharf                                 |  | Boston, MA        |  |                  | 344,645   |  |                  |                    | 151,644   |                    |  |  | 44    | % |  |  | 44    | %
|10 & 30 South Wacker                        |  | Chicago, IL       |  |                  | 2,003,288 |  |                  |                    | 1,502,466 |                    |  |  | 75    | % |  |  | 75    | %
|Chase Center (fka Bank One Center)(a)       |  | Indianapolis, IN  |  |                  |          |  |                  |                    |          |                    |  |  |      |   |  |  | 25    | %
|Pasadena Towers                             |  | Los Angeles, CA   |  |                  | 439,366   |  |                  |                    | 109,842   |                    |  |  | 25    | % |  |  | 25    | %
|Promenade II                                |  | Atlanta, GA       |  |                  | 774,344   |  |                  |                    | 387,172   |                    |  |  | 50    | % |  |  | 50    | %
|SunTrust Center(b)                          |  | Orlando, FL       |  |                  | 640,741   |  |                  |                    | 160,185   |                    |  |  | 25    | % |  |  | 25    | %
|Preston Commons(c)                          |  | Dallas, TX        |  |                  |          |  |                  |                    |          |                    |  |  |      |   |  |  | 50    | %
|Sterling Plaza(c)                           |  | Dallas, TX        |  |                  |          |  |                  |                    |          |                    |  |  |      |   |  |  | 50    | %
|Columbia Center (fka Bank of America Tower) |  | Seattle, WA       |  |                  | 1,545,008 |  |                  |                    | 774,049   |                    |  |  | 50.1  | % |  |  | 50.1  | %
|One Post                                    |  | San Francisco, CA |  |                  | 421,121   |  |                  |                    | 210,561   |                    |  |  | 50    | % |  |  | 50    | %
|161 North Clark(d)                          |  | Chicago, IL       |  |                  | 1,010,520 |  |                  |                    | 252,630   |                    |  |  | 25    | % |  |  | 25    | %
|Prominence in Buckhead(d)                   |  | Atlanta, GA       |  |                  | 424,309   |  |                  |                    | 106,077   |                    |  |  | 25    | % |  |  | 25    | %
|World Trade Center East(d)                  |  | Seattle, WA       |  |                  | 186,912   |  |                  |                    | 46,728    |                    |  |  | 25    | % |  |  | 25    | %
|Treat Towers(d)                             |  | Walnut Creek, CA  |  |                  | 367,313   |  |                  |                    | 91,828    |                    |  |  | 25    | % |  |  | 25    | %
|Parkshore Plaza I(d)                        |  | Folsom, CA        |  |                  | 114,356   |  |                  |                    | 28,589    |                    |  |  | 25    | % |  |  | 25    | %
|Parkshore Plaza II(d)                       |  | Folsom, CA        |  |                  | 155,497   |  |                  |                    | 38,874    |                    |  |  | 25    | % |  |  | 25    | %
|Bridge Pointe Corporate Center I & II(d)    |  | San Diego, CA     |  |                  | 372,653   |  |                  |                    | 93,163    |                    |  |  | 25    | % |  |  | 25    | %
|1111 19th Street(d)                         |  | Washington, DC    |  |                  | 252,014   |  |                  |                    | 50,403    |                    |  |  | 20    | % |  |  | 20    | %
|1620 L Street(d)                            |  | Washington, DC    |  |                  | 156,272   |  |                  |                    | 31,254    |                    |  |  | 20    | % |  |  | 20    | %
|1333 H Street(d)                            |  | Washington, DC    |  |                  | 244,585   |  |                  |                    | 48,917    |                    |  |  | 20    | % |  |  | 20    | %

99



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                               
|-------- | --------------------------------------------------------------
|NOTE 7  | INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES 
    (continued)

|                                       |  |                   |  |                  |            |  |                  |                    |           |                    |  |  |      |   |  |  |     |  
|-------------------------------------- |  | ----------------- |  | ---------------- | ---------- |  | ---------------- | ------------------ | --------- | ------------------ |  |  | ---- | - |  |  | --- | -
|                                       |  |                   |  |                  |            |  |                  | Our                |          
|                                       |  |                   |  |                  |            |  |                  | Ownership Interest |          
|                                       |  |                   |  | Total            |            |  | Effective        |                    |           | as of December 31, | 
|                                       |  |                   |  | Office Portfolio |            |  | Office Portfolio |                    |           |                    | 
|Property                               |  | Location          |  | Square Feet      |            |  | Square Feet      |                    |           | 2005               |  |  | 2004 |  
|                                       |  |                   |  |                  |            |  |                  |                    |           |                    |  |  |      |  
|Yahoo! Center (fka Colorado Center)(e) |  | Santa Monica, CA  |  |                  | 1,087,628  |  |                  |                    | 543,814   |                    |  |  | 50   | % |  |  | 50  | %
|1601 Market Street(f)                  |  | Philadelphia, PA  |  |                  | 681,289    |  |                  |                    | 74,942    |                    |  |  | 11   | % |  |  | 11  | %
|1700 Market Street(f)                  |  | Philadelphia, PA  |  |                  | 841,172    |  |                  |                    | 92,529    |                    |  |  | 11   | % |  |  | 11  | %
|201 Mission Street(g)                  |  | San Francisco, CA |  |                  | 483,289    |  |                  |                    | 120,822   |                    |  |  | 25   | % |  |  | 100 | %
|580 California(g)                      |  | San Francisco, CA |  |                  | 313,012    |  |                  |                    | 78,253    |                    |  |  | 25   | % |  |  | 100 | %
|Foundry Square IV(h)                   |  | San Francisco, CA |  |                  |           |  |                  |                    |          |                    |  |  |     |   |  |  |    |  
|                                       |  |                   |  |                  |            |  |                  |                    |           |                    |  |  |      |  
|                                       |  | Total             |  |                  | 14,437,825 |  |                  |                    | 5,797,094 |                    |  |  |      |   |  |  |     |  
|                                       |  |                   |  |                  |            |  |                  |                    |           |                    |  |  |      |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In 2005, we sold our 25% interest in Chase Center (fka Bank One
    Center), which consisted of two office buildings comprising
    1,057,877 square feet, for $45.0 million (which
    includes the transfer of $16.3 million of mortgage debt
    encumbering this property to the buyer).                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(b) |  | In December 2005, the joint venture refinanced the mortgage debt
    encumbering the SunTrust Center. The new mortgage debt has a
    principal balance of $77.0 million, bears interest at a
    fixed coupon rate of 5.34% and matures in January 2016. Our
    share of the principal balance is $19.3 million. Our share
    of the prior mortgage, which bore interest at a variable rate
    based on LIBOR plus 80 basis points, was $12.5 million.                                                                                                                                                                                                                            
|   
|(c) |  | In 2005, we sold our 50% interest in Preston Commons and
    Sterling Plaza, which consisted of four office buildings
    comprising 721,351 square feet, for $69.2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(d) |  | In December 2003, we sold partial interests in these office
    properties for $596.5 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(e) |  | In July 2004, we acquired a 50% interest in Yahoo! Center for
    $221.8 million. In 2005, the joint venture obtained a
    $250.0 million mortgage financing, which bears interest at
    a fixed coupon rate of 5.27% and matures in October 2015. Our
    share of the principal balance is $125.0 million.                                                                                                                                                                                                                                                                                                                                                                        
|   
|(f) |  | In November 2004, we sold partial interests in these office
    properties for $172.2 million. We account for our remaining
    interest under the equity method of accounting because we have
    participating rights with respect to certain significant
    policies.                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(g) |  | In July 2005, we sold partial interests in these office
    properties for $162.8 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(h) |  | In 2000, we formed a joint venture with Wilson Investors to
    develop, construct, lease and manage Foundry Square IV, a
    225,490 square foot office building located in
    San Francisco, California. Through the sale of the office
    building in July 2003, we disposed of our 40% indirect interest.
    Our share of the gain on the sale of the property was
    $7.1 million and is included in income from investments in
    unconsolidated joint ventures. Our share of the gross proceeds
    from the sale was $56.6 million, which includes the
    repayment of a $44.5 million construction loan. Wilson
    Investors share of the proceeds was $17.1 million.

100



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                               
|-------- | --------------------------------------------------------------
|NOTE 7  | INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES 
    (continued)



|                                                                                                                                                                     |                                                         |                                                              |         |           |           |   |           |           |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------------------------ | ------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                                                                                                                     |                                                         | December 31,                                                 |        
|                                                                                                                                                                     |                                                         |                                                              |        
|                                                                                                                                                                     |                                                         | 2005                                                         |         |           | 2004      |  
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|                                                                                                                                                                     |                                                         | (Dollars in thousands)                                       |        
|Balance Sheets:                                                                                                                                                      |                                                         |                                                              |         |           |           |   |           |          
|                                                                                                                                                                     | Assets:                                                 |                                                              |         |           |           |   |           |           |          
|                                                                                                                                                                     | Real estate, net of accumulated depreciation            |                                                              | $       | 3,002,906 |           |   | $         | 3,068,975 |          
|                                                                                                                                                                     | Other assets                                            |                                                              |         | 356,016   |           |   |           | 343,075   |          
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|                                                                                                                                                                     |                                                         | Total Assets                                                 |         | $         | 3,358,922 |   |           | $         | 3,412,050 | 
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|                                                                                                                                                                     | Liabilities and Partners and Shareholders
    Equity: |                                                              |         |           |           |   |           |           |          
|                                                                                                                                                                     | Mortgage debt(a)                                        |                                                              | $       | 1,138,455 |           |   | $         | 931,976   |          
|                                                                                                                                                                     | Other liabilities                                       |                                                              |         | 151,303   |           |   |           | 138,010   |          
|                                                                                                                                                                     | Partners and shareholders equity                      |                                                              |         | 2,069,164 |           |   |           | 2,342,064 |          
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|                                                                                                                                                                     |                                                         | Total Liabilities and Partners and Shareholders
    Equity |         | $         | 3,358,922 |   |           | $         | 3,412,050 | 
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|Our share of historical partners and shareholders
    equity                                                                                                       |                                                         | $                                                            | 878,225 |           |           | $ | 1,032,664 |          
|Net excess of cost of investments over the net book value of
    underlying net assets (net of accumulated depreciation of
    $21,303 and $22,797, respectively)(b) |                                                         |                                                              | 69,764  |           |           |   | 84,479    |          
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|Carrying value of investments in unconsolidated joint ventures                                                                                                       |                                                         | $                                                            | 947,989 |           |           | $ | 1,117,143 |          
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  
|Our share of unconsolidated non-recourse mortgage debt                                                                                                               |                                                         | $                                                            | 473,725 |           |           | $ | 361,032   |          
|                                                                                                                                                                     |                                                         |                                                              |         |           |           |  






|    |  |                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Our share of the scheduled principal payments on non-recourse
    mortgage debt through maturity as of December 31, 2005 is
    as follows:

|           |       |                      |         |         | 
|---------- | ----- | -------------------- | ------- | ------- | 
|Year       |       | Dollars in thousands |        
|           |       |                      |        
|2006       |       | $                    | 52,217  |        
|2007       |       |                      | 3,999   |        
|2008       |       |                      | 18,610  |        
|2009       |       |                      | 11,645  |        
|2010       |       |                      | 96,174  |        
|Thereafter |       |                      | 291,080 |        
|           |       |                      |        
|           | Total |                      | $       | 473,725 | 
|           |       |                      |        

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | This amount represents the aggregate difference between the
    Companys historical cost basis and the basis reflected at
    the joint venture level, which is typically amortized over the
    life of the related asset. The basis differentials occur
    primarily upon the transfer of assets that were previously owned
    by the Company into a joint venture or the acquisition of
    partial interests in joint ventures by us.

101



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                                                               
|-------- | --------------------------------------------------------------
|NOTE 7  | INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES 
    (continued)

|                          |                                                     |                                                                             |                |         |         |         |   |         |         |         |   |         |         |         | 
|------------------------- | --------------------------------------------------- | --------------------------------------------------------------------------- | -------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                          |                                                     | For the years ended December 31,                                            |               
|                          |                                                     |                                                                             |               
|                          |                                                     | 2005                                                                        |                |         | 2004    |         |   | 2003    |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          |                                                     | (Dollars in thousands)                                                      |               
|Statements of Operations: |                                                     |                                                                             |                |         |         |         |   |         |         |         |   |        
|                          | Revenues                                            |                                                                             | $              | 528,273 |         |         | $ | 485,770 |         |         | $ | 472,124 |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          | Expenses:                                           |                                                                             |                |         |         |         |   |         |         |         |   |         |        
|                          |                                                     | Interest expense and loan cost amortization                                 |                |         | 55,732  |         |   |         | 45,026  |         |   |         | 75,289  |        
|                          |                                                     | Depreciation and amortization                                               |                |         | 132,819 |         |   |         | 121,722 |         |   |         | 92,196  |        
|                          |                                                     | Operating expenses, ground rent and general and administrative
    expenses |                |         | 252,804 |         |   |         | 204,567 |         |   |         | 180,087 |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          |                                                     |                                                                             | Total expenses |         |         | 441,355 |   |         |         | 371,315 |   |         |         | 347,572 | 
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          | Net income before gain on sale of real estate       |                                                                             |                | 86,918  |         |         |   | 114,455 |         |         |   | 124,552 |        
|                          | Gain on sale of real estate                         |                                                                             |                | 39,585  |         |         |   |        |         |         |   | 43,255  |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          | Net income                                          |                                                                             | $              | 126,503 |         |         | $ | 114,455 |         |         | $ | 167,807 |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|Our share of:             |                                                     |                                                                             |                |         |         |         |   |         |         |         |   |        
|                          | Net income                                          |                                                                             | $              | 68,996  |         |         | $ | 50,304  |         |         | $ | 79,882  |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          | Interest expense and loan cost amortization         |                                                                             | $              | 22,015  |         |         | $ | 21,319  |         |         | $ | 50,059  |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          | Depreciation and amortization (real estate related) |                                                                             | $              | 50,823  |         |         | $ | 46,621  |         |         | $ | 53,208  |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        
|                          | Gain on sale of real estate                         |                                                                             | $              | 26,499  |         |         | $ |        |         |         | $ | 7,063   |        
|                          |                                                     |                                                                             |                |         |         |         |   |         |        



|         |                  
|-------- | -----------------
|NOTE 8  | LEASE TERMINATION





|         |              
|-------- | -------------
|NOTE 9  | MORTGAGE DEBT



102



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                            
|-------- | ---------------------------
|NOTE 9  | MORTGAGE DEBT  (continued)



|                                |                                                                                                           |                        |           |            |      |   |           |          |  
|------------------------------- | --------------------------------------------------------------------------------------------------------- | ---------------------- | --------- | ---------- | ---- | - | --------- | -------- | -
|                                |                                                                                                           | For the years ended    |          
|                                |                                                                                                           | December 31,           |          
|                                |                                                                                                           |                        |          
|                                |                                                                                                           | 2005                   |           |            | 2004 |  
|                                |                                                                                                           |                        |           |            |      |  
|                                |                                                                                                           | (Dollars in thousands) |          
|Balance at beginning of year(a) |                                                                                                           | $                      | 2,622,750 |            |      | $ | 2,329,552 |         
|                                | Repayments and scheduled principal amortization(b)                                                        |                        |           | (1,077,322 | )    |   |           | (438,828 | )
|                                | Assumed through property acquisitions (see
    Note 4  Investments in Real Estate)                       |                        |           | 118,486    |      |   |           | 534,256  |  
|                                | Recorded in connection with the consolidation of a property (see
    Note 3  Variable Interest Entities) |                        |           |           |      |   |           | 203,225  |  
|                                | Repaid upon sale of property                                                                              |                        |           | (13,386    | )    |   |           | (5,455   | )
|                                | Refinancing(c)                                                                                            |                        |           | 150        |      |   |           |         |  
|                                | Issuances(d)                                                                                              |                        |           | 518,705    |      |   |           |         |  
|                                |                                                                                                           |                        |           |            |      |  
|Balance at end of year(a)       |                                                                                                           | $                      | 2,169,383 |            |      | $ | 2,622,750 |         
|                                |                                                                                                           |                        |           |            |      |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes net discounts on mortgage debt of $5.2 million and
    $13.7 million as of December 31, 2005 and 2004,
    respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(b) |  | During 2005, we repaid mortgage debt on the following
    properties: Sixty State Street, Island Corporate Center,
    San Mateo BayCenter II, 1740 Technology, One Market,
    Central Park, Perimeter Center and 1301 Avenue of the
    Americas. During 2004, we repaid mortgage debt on the following
    properties: 580 California, BP Tower, 110 Atrium Place,
    Fremont Bayside, Industrial Drive Warehouse, John Marshall and
    Worldwide Plaza.                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(c) |  | During 2005, we refinanced the mortgage debt encumbering the
    Washington Mutual Tower property. The new mortgage has a
    principal balance of $79.25 million, bears interest at a
    fixed coupon rate of 4.55% and matures in June 2010. The prior
    mortgage had a principal balance of $79.1 million, bore
    interest at a fixed coupon rate of 7.53% and was scheduled to
    mature in November 2005. The effective interest rate on the new
    debt is 4.56% as compared to 7.77% on the prior mortgage.                                                                                                                                                                                                                                                                                                                          
|   
|    |  | During 2005, we also refinanced the mortgage debt encumbering
    the Wells Fargo Center property. The new mortgage has a
    principal balance of $110 million, bears interest at LIBOR
    plus 55 basis points and matures in January 2011. The prior
    mortgage bore interest at a fixed coupon rate of 8.74%. The
    effective interest rate on the new debt is LIBOR plus
    68 basis points as compared to 7.97% on the prior mortgage.                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(d) |  | During 2005, we obtained mortgage financing for the 1301 Avenue
    of the Americas property. The financing includes senior mortgage
    debt and a mezzanine loan. The senior mortgage debt has a
    principal balance of $420.8 million, bears interest at a
    fixed coupon rate of 5.37% and matures in January 2016. The
    mezzanine loan has a principal balance of $65.8 million,
    bears interest at LIBOR plus 90 basis points and matures in
    January 2009. The effective interest rates on the senior
    mortgage debt and the mezzanine loan are 5.39% and 5.36%,
    respectively, as of December 31, 2005.                                                                                                                                                                                                                 
|   
|    |  | Prior to the disposition of the San Felipe Plaza property
    in 2005, the property was encumbered by a 5.81% mortgage note
    with an outstanding principal balance of $47.8 million that
    was scheduled to mature in 2013. The lender agreed to substitute
    the 1300 North 17th Street property, located in Arlington,
    Virginia, as replacement collateral. As a result, no prepayment
    penalty was incurred. The terms of the mortgage note were
    otherwise unchanged as a result of this transaction. In December
    2005, we obtained additional mortgage financing on the 1300
    North 17th Street property. This additional mortgage has a
    principal balance of $32.1 million, bears interest at a
    fixed coupon rate of 6.03% and an effective interest rate of
    6.07%. The mortgage matures in January 2013.

103



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|         |                            
|-------- | ---------------------------
|NOTE 9  | MORTGAGE DEBT  (continued)



|                                                          |                                         |                         |   |           |           |   |   |           |           |  
|--------------------------------------------------------- | --------------------------------------- | ----------------------- | - | --------- | --------- | - | - | --------- | --------- | -
|                                                          |                                         | December 31,            |  
|                                                          |                                         |                         |  
|                                                          |                                         | 2005                    |   |           | 2004      |  
|                                                          |                                         |                         |   |           |           |  
|                                                          |                                         | (Dollars in thousands)  |  
|Balance                                                   |                                         |                         |   |           |           |   |   |          
|                                                          | Fixed interest rate mortgage debt       |                         | $ | 1,993,562 |           |   | $ | 2,516,554 |          
|                                                          | Variable interest rate mortgage debt    |                         |   | 175,821   |           |   |   | 106,196   |          
|                                                          |                                         |                         |   |           |           |  
|                                                          |                                         | Subtotal                |   |           | 2,169,383 |   |   |           | 2,622,750 |  
|                                                          | Net discount on mortgage debt           |                         |   | (5,185    | )         |   |   | (13,683   | )        
|                                                          |                                         |                         |   |           |           |  
|                                                          |                                         | Total mortgage debt     |   | $         | 2,164,198 |   |   | $         | 2,609,067 |  
|                                                          |                                         |                         |   |           |           |  
|Weighted average effective interest rate at end of period |                                         |                         |   |           |           |   |   |          
|                                                          | Fixed interest rate mortgage debt(a)    |                         |   | 7.01      | %         |   |   | 7.80      | %        
|                                                          | Variable interest rate mortgage debt(b) |                         |   | 5.17      | %         |   |   | 5.53      | %        
|                                                          |                                         |                         |   |           |           |  
|                                                          |                                         | Effective interest rate |   |           | 6.86      | % |   |           | 7.71      | %
|                                                          |                                         |                         |   |           |           |  






|    |  |                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | As of December 31, 2005 and 2004, the effective interest
    rates on the fixed interest rate mortgage debt ranged from 4.56%
    to 8.51% and 5.81% to 8.51%, respectively.
|   
|(b) |  | As of December 31, 2005, the effective interest rates on
    the variable interest rate mortgage debt ranged from 5.06% to
    5.36%.                                       



| |                   
| | ------------------
| | Repayment Schedule



|           |       |                      |         |           | 
|---------- | ----- | -------------------- | ------- | --------- | 
|Year       |       | Dollars in thousands |        
|           |       |                      |        
|2006       |       | $                    | 108,704 |          
|2007       |       |                      | 263,018 |          
|2008       |       |                      | 158,178 |          
|2009       |       |                      | 630,698 |          
|2010       |       |                      | 264,076 |          
|Thereafter |       |                      | 744,709 |          
|           |       |                      |        
|           | Total |                      | $       | 2,169,383 | 
|           |       |                      |        

104



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 10  UNSECURED NOTES




2005:




| |                          
| | -------------------------
| | Unsecured Notes  Issued:

|                    |  |                   |           |             |        |   |       |             |  |  |                   |  |  |                  |             |  |  |  |           | 
|------------------- |  | ----------------- | --------- | ----------- | ------ | - | ----- | ----------- |  |  | ----------------- |  |  | ---------------- | ----------- |  |  |  | --------- | 
|Original Term       |  | Month of Issuance |           |             | Amount |   |       | Coupon Rate |  |  | Effective Rate(a) |  |  | Year of Maturity |            
|                    |  |                   |           |             |        |   |       |             |  |  |                   |  |  |                  |            
|                    |  |                   |           | (Dollars in |        |   |       |             |  |  |                  
|                    |  |                   |           | thousands)  |        |   |       |             |  |  |                  
|2 Years to 4 Years  |  |                   | January   |             |        | $ | 6,221 |             |  |  | 3.45%-4.15%       |  |  |                  | 3.76%-4.39% |  |  |  | 2007-2009 | 
|2 Years to 4 Years  |  |                   | February  |             |        |   | 3,220 |             |  |  | 3.70%-4.15%       |  |  |                  | 4.01%-4.39% |  |  |  | 2007-2009 | 
|3 Years to 5 Years  |  |                   | March     |             |        |   | 4,997 |             |  |  | 4.05%-4.75%       |  |  |                  | 4.33%-5.00% |  |  |  | 2008-2010 | 
|2 Years to 4 Years  |  |                   | April     |             |        |   | 7,672 |             |  |  | 4.30%-4.80%       |  |  |                  | 4.61%-5.04% |  |  |  | 2007-2009 | 
|2 Years to 6 Years  |  |                   | June      |             |        |   | 6,426 |             |  |  | 4.10%-4.63%       |  |  |                  | 4.41%-4.87% |  |  |  | 2007-2011 | 
|3 Years to 4 Years  |  |                   | July      |             |        |   | 4,722 |             |  |  | 4.40%-4.55%       |  |  |                  | 4.68%-4.79% |  |  |  | 2008-2009 | 
|3 Years to 6 Years  |  |                   | September |             |        |   | 5,739 |             |  |  | 4.40%-4.70%       |  |  |                  | 4.68%-4.92% |  |  |  | 2008-2011 | 
|3 Years to 6 Years  |  |                   | October   |             |        |   | 1,805 |             |  |  | 4.55%-5.00%       |  |  |                  | 4.83%-5.22% |  |  |  | 2008-2011 | 
|Less Issuance Costs |  |                   | (253      | )           |        |   |       |             |  |  |                   |  |  |                  |             | 
|                    |  |                   |           |             |        |   |       |             |  |  |                   | 
|Net Proceeds        |  | $                 | 40,549    |             |        |   |       |             |  |  |                   |  |  |                  |             | 
|                    |  |                   |           |             |        |   |       |             |  |  |                   | 



| |                          
| | -------------------------
| | Unsecured Notes  Repaid:

|             |                         |             |         |         |             |  |       |                   |  |  |       |       | 
|------------ | ----------------------- | ----------- | ------- | ------- | ----------- |  | ----- | ----------------- |  |  | ----- | ----- | 
|Month Repaid |                         | Amount      |         |         | Coupon Rate |  |       | Effective Rate(a) | 
|             |                         |             |         |         |             |  |       |                   | 
|             |                         | (Dollars in |         |         |             |  |      
|             |                         | thousands)  |         |         |             |  |      
|February     |                         | $           | 125,000 |         |             |  | 6.88% |                   |  |  | 6.40% |      
|February     |                         |             | 400,000 |         |             |  | 6.63% |                   |  |  | 4.99% |      
|July         |                         |             | 100,000 |         |             |  | 8.00% |                   |  |  | 6.49% |      
|September    |                         |             | 50,000  |         |             |  | 7.36% |                   |  |  | 7.69% |      
|             |                         |             |         |         |             |  |       |                   | 
|             | Total/ Weighted Average |             | $       | 675,000 |             |  |       | 6.93%             |  |  |       | 5.67% | 
|             |                         |             |         |         |             |  |       |                   | 

105



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 10  UNSECURED NOTES 
(continued)


2004:




| |                          
| | -------------------------
| | Unsecured Notes  Issued:

|                     |  |                   |           |             |        |   |           |             |  |  |                   |     |  |                  |             |  |  |  |            | 
|-------------------- |  | ----------------- | --------- | ----------- | ------ | - | --------- | ----------- |  |  | ----------------- | --- |  | ---------------- | ----------- |  |  |  | ---------- | 
|Original Term        |  | Month of Issuance |           |             | Amount |   |           | Coupon Rate |  |  | Effective Rate(a) |     |  | Year of Maturity |            
|                     |  |                   |           |             |        |   |           |             |  |  |                   |     |  |                  |            
|                     |  |                   |           | (Dollars in |        |   |           |             |  |  |                  
|                     |  |                   |           | thousands)  |        |   |           |             |  |  |                  
|10 Years             |  |                   | March     |             |        | $ | 1,000,000 |             |  |  | 4.75%             |     |  |                  | 4.25%       |  |  |  | 2014       | 
|10 Years             |  |                   | May       |             |        |   | 45,000    |             |  |  | 3.16%             | (b) |  |                  | 3.26%       |  |  |  | 2014       | 
|4 Years to 6 Years   |  |                   | June      |             |        |   | 4,342     |             |  |  | 4.75%-5.25%       |     |  |                  | 4.98%-5.46% |  |  |  | 2008- 2010 | 
|4 Years to 6.5 Years |  |                   | July      |             |        |   | 17,570    |             |  |  | 3.70%-5.15%       |     |  |                  | 3.97%-5.36% |  |  |  | 2008- 2011 | 
|6 Years              |  |                   | October   |             |        |   | 800,000   |             |  |  | 4.65%             |     |  |                  | 4.81%       |  |  |  | 2010       | 
|6 Years              |  |                   | October   |             |        |   | 200,000   |             |  |  | 2.64%             | (b) |  |                  | 2.77%       |  |  |  | 2010       | 
|4 Years              |  |                   | October   |             |        |   | 3,771     |             |  |  | 3.80%-4.00%       |     |  |                  | 4.04%-4.24% |  |  |  | 2008       | 
|2 Years to 4 Years   |  |                   | November  |             |        |   | 1,677     |             |  |  | 3.30%-3.90%       |     |  |                  | 3.61%-4.14% |  |  |  | 2006- 2008 | 
|2 Years to 4.5 Years |  |                   | December  |             |        |   | 6,894     |             |  |  | 3.35%-4.10%       |     |  |                  | 3.66%-4.34% |  |  |  | 2006- 2009 | 
|Less Issuance Costs  |  |                   | (17,275   | )           |        |   |           |             |  |  |                   |     |  |                  |             | 
|                     |  |                   |           |             |        |   |           |             |  |  |                   |    
|Net Proceeds         |  | $                 | 2,061,979 |             |        |   |           |             |  |  |                   |     |  |                  |             | 
|                     |  |                   |           |             |        |   |           |             |  |  |                   |    



| |                          
| | -------------------------
| | Unsecured Notes  Repaid:

|             |                         |             |         |           |             |  |      |                   |   |  |      |      |  
|------------ | ----------------------- | ----------- | ------- | --------- | ----------- |  | ---- | ----------------- | - |  | ---- | ---- | -
|Month Repaid |                         | Amount      |         |           | Coupon Rate |  |      | Effective Rate(a) |  
|             |                         |             |         |           |             |  |      |                   |  
|             |                         | (Dollars in |         |           |             |  |     
|             |                         | thousands)  |         |           |             |  |     
|January      |                         | $           | 300,000 |           |             |  | 6.50 | %                 |   |  | 4.59 | %   
|January      |                         |             | 100,000 |           |             |  | 6.90 | %                 |   |  | 6.27 | %   
|May          |                         |             | 200,000 |           |             |  | 6.80 | %                 |   |  | 6.10 | %   
|June         |                         |             | 250,000 |           |             |  | 6.50 | %                 |   |  | 5.31 | %   
|September    |                         |             | 30,000  |           |             |  | 7.24 | %                 |   |  | 7.26 | %   
|November     |                         |             | 325,000 | (c)       |             |  | 7.25 | %                 |   |  | 7.64 | %   
|             |                         |             |         |           |             |  |      |                   |  
|             | Total/ Weighted Average |             | $       | 1,205,000 |             |  |      | 6.80              | % |  |      | 6.02 | %
|             |                         |             |         |           |             |  |      |                   |  

106



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 10  UNSECURED NOTES 
(continued)




|                            |                                                    |        |      |      |           |             |      |           |   |   |               |           |  |  |                   |  | 
|--------------------------- | -------------------------------------------------- | ------ | ---- | ---- | --------- | ----------- | ---- | --------- | - | - | ------------- | --------- |  |  | ----------------- |  | 
|                            |                                                    | Coupon |      |      | Effective |             |      | Principal |   |   |              
|Original Term               |                                                    | Rate   |      |      | Rate(a)   |             |      | Balance   |   |   | Maturity Date |          
|                            |                                                    |        |      |      |           |             |      |           |   |   |               |          
|                            |                                                    |        |      |      |           | (Dollars in |      |           |  
|                            |                                                    |        |      |      |           | thousands)  |      |           |  
|Fixed Rate Unsecured Notes: |                                                    |        |      |      |           |             |      |           |   |   |               |           |  |  |                   | 
|6 Years                     |                                                    |        | 8.38 | %    |           |             | 7.65 | %         |   | $ | 500,000       |           |  |  | 03/15/06          | 
|9 Years                     |                                                    |        | 7.44 | %    |           |             | 7.74 | %         |   |   | 50,000        |           |  |  | 09/01/06          | 
|10 Years                    |                                                    |        | 7.13 | %    |           |             | 6.74 | %         |   |   | 100,000       |           |  |  | 12/01/06          | 
|9 Years                     |                                                    |        | 7.00 | %    |           |             | 6.80 | %         |   |   | 1,500         |           |  |  | 02/02/07          | 
|9 Years                     |                                                    |        | 6.88 | %    |           |             | 6.83 | %         |   |   | 25,000        |           |  |  | 04/30/07          | 
|9 Years                     |                                                    |        | 6.76 | %    |           |             | 6.76 | %         |   |   | 300,000       |           |  |  | 06/15/07          | 
|10 Years                    |                                                    |        | 7.41 | %    |           |             | 7.70 | %         |   |   | 50,000        |           |  |  | 09/01/07          | 
|7 Years                     |                                                    |        | 7.75 | %    |           |             | 7.91 | %         |   |   | 600,000       |           |  |  | 11/15/07          | 
|10 Years                    |                                                    |        | 6.75 | %    |           |             | 6.97 | %         |   |   | 150,000       |           |  |  | 01/15/08          | 
|10 Years                    |                                                    |        | 6.75 | %    |           |             | 7.01 | %         |   |   | 300,000       |           |  |  | 02/15/08          | 
|10 Years                    |                                                    |        | 6.80 | %    |           |             | 6.94 | %         |   |   | 500,000       |           |  |  | 01/15/09          | 
|10 Years                    |                                                    |        | 7.25 | %    |           |             | 7.14 | %         |   |   | 200,000       |           |  |  | 05/01/09          | 
|11 Years                    |                                                    |        | 7.13 | %    |           |             | 6.97 | %         |   |   | 150,000       |           |  |  | 07/01/09          | 
|10 Years                    |                                                    |        | 8.10 | %    |           |             | 8.22 | %         |   |   | 360,000       |           |  |  | 08/01/10          | 
|6 Years                     |                                                    |        | 4.65 | %    |           |             | 4.81 | %         |   |   | 800,000       |           |  |  | 10/01/10          | 
|10 Years                    |                                                    |        | 7.65 | %    |           |             | 7.20 | %         |   |   | 200,000       |           |  |  | 12/15/10          | 
|10 Years                    |                                                    |        | 7.00 | %    |           |             | 6.83 | %         |   |   | 1,100,000     |           |  |  | 07/15/11          | 
|10 Years                    |                                                    |        | 6.75 | %    |           |             | 7.02 | %         |   |   | 500,000       |           |  |  | 02/15/12          | 
|10 Years                    |                                                    |        | 5.88 | %    |           |             | 5.98 | %         |   |   | 500,000       |           |  |  | 01/15/13          | 
|10 Years(d)                 |                                                    |        | 4.75 | %    |           |             | 5.54 | %         |   |   | 1,000,000     |           |  |  | 03/15/14          | 
|20 Years                    |                                                    |        | 7.88 | %    |           |             | 8.08 | %         |   |   | 25,000        |           |  |  | 12/01/16          | 
|20 Years                    |                                                    |        | 7.35 | %    |           |             | 8.08 | %         |   |   | 200,000       |           |  |  | 12/01/17          | 
|20 Years                    |                                                    |        | 7.25 | %    |           |             | 7.54 | %         |   |   | 250,000       |           |  |  | 02/15/18          | 
|30 Years                    |                                                    |        | 7.50 | %    |           |             | 8.24 | %         |   |   | 150,000       |           |  |  | 10/01/27          | 
|30 Years                    |                                                    |        | 7.25 | %    |           |             | 7.31 | %         |   |   | 225,000       |           |  |  | 06/15/28          | 
|30 Years                    |                                                    |        | 7.50 | %    |           |             | 7.55 | %         |   |   | 200,000       |           |  |  | 04/19/29          | 
|30 Years                    |                                                    |        | 7.88 | %    |           |             | 7.94 | %         |   |   | 300,000       |           |  |  | 07/15/31          | 
|EOP InterNotes(e)           |                                                    |        | 4.30 | %    |           |             | 4.56 | %         |   |   | 75,056        |           |  |  | 11/15/06-10/15/11 | 
|                            |                                                    |        |      |      |           |             |      |           |   |   |               |          
|                            | Total/ Weighted Average Fixed Rate Unsecured Notes |        |      | 6.67 | %         |             |      | 6.80      | % |   |               | 8,811,556 |  |  |                   |  | 
|                            |                                                    |        |      |      |           |             |      |           |   |   |               |          

107



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 10  UNSECURED NOTES 
(continued)


|                                |                                                       |                       |      |      |           |             |      |           |         |   |                   |         |   |  |          |  |  | 
|------------------------------- | ----------------------------------------------------- | --------------------- | ---- | ---- | --------- | ----------- | ---- | --------- | ------- | - | ----------------- | ------- | - |  | -------- |  |  | 
|                                |                                                       | Coupon                |      |      | Effective |             |      | Principal |         |   |                  
|Original Term                   |                                                       | Rate                  |      |      | Rate(a)   |             |      | Balance   |         |   | Maturity Date     |        
|                                |                                                       |                       |      |      |           |             |      |           |         |   |                   |        
|                                |                                                       |                       |      |      |           | (Dollars in |      |           |        
|                                |                                                       |                       |      |      |           | thousands)  |      |           |        
|Variable Rate Unsecured Notes:  |                                                       |                       |      |      |           |             |      |           |         |   |                   |         |   |  |          | 
|6 Years                         |                                                       |                       | 4.65 | %    |           |             | 4.78 | %         |         |   | 200,000           |         |   |  | 10/01/10 | 
|10 Years                        |                                                       |                       | 5.17 | %    |           |             | 5.27 | %         |         |   | 45,000            |         |   |  | 05/27/14 | 
|                                |                                                       |                       |      |      |           |             |      |           |         |   |                   |        
|                                | Total/ Weighted Average Variable Rate Unsecured Notes |                       |      | 4.75 | % 6.62%   |             |      | 4.87      | % 6.75% |   | 245,000 9,056,556 |         |   |  |         
|                                | Total/ Weighted Average Unsecured Notes               |                       |      |      |           |             |      |           |         |   |                   | (23,936 | ) |  |          |  | 
|Net Discount on Unsecured Notes |                                                       |                       |      |      |           |             |      |           |         | $ | 9,032,620         |         |   |  |          | 
|                                |                                                       | Total Unsecured Notes |      |      |           |             |      |           |         |   |                   |         |   |  |          |  |  | 
|                                |                                                       |                       |      |      |           |             |      |           |         |   |                   |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes the effect of settled interest rate protection and
    interest rate swaps, offering and transaction costs and premiums
    and discounts.                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(b) | The $45 million notes have a variable interest rate of
    LIBOR plus 77.5 basis points plus an additional
    10 basis points attributed to loan costs. The
    $200 million notes have a variable interest rate of LIBOR
    plus 60 basis points plus an additional 13 basis
    points attributed to loan costs.                                                                                                                                                                                                                                               
|   
|(c) | In November 2004, we redeemed our 7.25% Senior Exchangeable
    Notes due November 15, 2008. The total paid on the
    redemption date was the principal amount of $325 million
    plus accrued interest. In conjunction with the redemption, we
    expensed $5.3 million of unamortized loan costs, which are
    included in amortization of deferred financing costs and
    prepayment expenses on the consolidated statements of operations.                                                                                                                
|   
|(d) | In March 2004, we entered into four interest rate swaps that
    each had a notional amount of $250 million for a combined
    notional amount of $1 billion that effectively converted
    these notes to a variable interest rate based on the
    6-month LIBOR rate. One
    of the interest rate swaps was terminated during June 2005 and
    the remaining swaps were terminated in September 2005. The
    termination of the swaps effectively converted the notes back to
    a fixed interest rate (see Note 12  Derivative
    Financial Instruments).
|   
|(e) | In June 2004, we launched a new program allowing for the
    issuance of up to $500 million of unsecured medium-term
    notes for sale to retail investors through licensed brokers
    (EOP InterNotes). The rates shown are weighted
    average rates. The coupon rates on the EOP InterNotes range from
    3.30% to 5.25%. Including all offering expenses, the all-in
    effective rates of the EOP InterNotes range from 3.61% to 5.46%.                                                                                                                

108



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 10  UNSECURED NOTES 
(continued)




| |                                                 
| | ------------------------------------------------
| | Restrictions and Covenants under Unsecured Notes





|                                                                                                                    |  |  |  | 
|------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Covenants (in each case as defined in the respective indenture)                                                     |  | 
|                                                                                                                    |  | 
| Debt to Adjusted Total Assets may not be greater
    than 60%;                                                    |  |  |  | 
| Secured Debt to Adjusted Total Assets may not be
    greater than 40%;                                            |  |  |  | 
| Consolidated Income Available for Debt Service to
    Annual Debt Service Charge may not be less than 1.50:1; and |  |  |  | 
| Total Unencumbered Assets to Unsecured Debt may not
    be less than 150%(a)                                      |  |  |  | 






|    |  |                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The unsecured notes we assumed in the merger with Spieker, of
    which $1.2 billion are still outstanding at
    December 31, 2005, are subject to a minimum ratio of 165%.

NOTE 11  LINES OF CREDIT




| |               
| | --------------
| | Line of Credit





| |                  
| | -----------------
| | Bridge Facilities







109



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 11  LINES OF
CREDIT  (continued)






| |                    
| | -------------------
| | Financial Covenants





| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | total debt to total asset value may not exceed 0.60:1 at any
    time and, in certain circumstances, may not exceed 0.65:1;                                                                                                                                   
|
| |  | cash flow to fixed charges may not be less than 1.5:1;                                                                                                                                                                                                        
|
| |  | secured debt to total asset value may not exceed 0.40:1;                                                                                                                                                                                                      
|
| |  | unsecured debt to unencumbered asset value may not exceed 0.60:1
    and, in certain circumstances, may not exceed 0.65:1; and                                                                                                                                
|
| |  | our investments in unimproved assets, developments, joint
    venture interests, mortgages and securities, and properties
    which constitute primarily warehouse distribution facilities, in
    the aggregate, may not exceed 30% of our total asset value.

NOTE 12  DERIVATIVE FINANCIAL INSTRUMENTS




| |                    
| | -------------------
| | Interest Rate Swaps

fixed-to


fixed-to


110



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 12  DERIVATIVE FINANCIAL
INSTRUMENTS  (continued)




| |                                     
| | ------------------------------------
| | Forward-Starting Interest Rate Swaps





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In May 2004, we settled five forward-starting interest rate
    swaps with a combined notional amount of $500 million and
    recognized a gain of $24.0 million, which is classified as
    realized gain on settlement of derivatives and sale of
    marketable securities on the consolidated statements of
    operations. The swaps were entered into in 2003 to hedge an
    unsecured note offering that was expected to occur in June 2004,
    but did not occur. The market value of these swaps at
    December 31, 2003 represented an asset of
    $11.1 million which was recorded in other assets with a
    corresponding adjustment to accumulated other comprehensive
    income.                                                                                                                                                                                                                                                                                
|
| |  | In conjunction with the issuance of $1.0 billion of 4.75%
    unsecured notes in March 2004 due March 2014, we paid
    $69.1 million to settle four forward-starting interest rate
    swaps that had a combined notional amount of $800 million
    that were previously entered into to hedge the interest rate of
    the $1.0 billion notes. $0.2 million of the settlement
    amount was immediately recognized in interest expense because
    the hedge was not perfectly effective and the remaining
    $68.9 million was charged to accumulated other
    comprehensive income. The amount charged to accumulated other
    comprehensive income is being amortized to interest expense over
    the 10-year term of the
    hedged notes. The market value of these swaps at
    December 31, 2003 represented a liability of
    $21.5 million which was recorded in other liabilities and a
    corresponding adjustment to accumulated other comprehensive
    income.
|
| |  | $6.8 million will be reclassified from accumulated other
    comprehensive income to interest expense in 2006 related to
    amortization of net payments on settlements of forward starting
    interest rate swaps.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

NOTE 13  IMPACT OF HURRICANE KATRINA




NOTE 14  MINORITY INTERESTS IN PARTIALLY
OWNED PROPERTIES




111



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 14  MINORITY INTERESTS IN PARTIALLY
OWNED PROPERTIES  (continued)




|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      |  |       |   |  |  |       |  
|----------------------------------------------------------- | ------------------------------ | -------- |  | ----------------- | ----------- |  | ---------------- | ------------ |  | ------------------ | --------- | --------- |  | ---- |  | ----- | - |  |  | ----- | -
|                                                            |                                |          |  |                   |             |  |                  | Our Economic | 
|                                                            |                                |          |  |                   |             |  |                  | Interest     | 
|                                                            |                                |          |  | Total Office      |             |  | Effective Office |              |  | As of December 31, |          
|                                                            |                                |          |  | Portfolio         |             |  | Portfolio        |              |  |                    |          
|Property                                                    |                                | Location |  |                   | Square Feet |  |                  | Square Feet  |  |                    | 2005      |           |  | 2004 | 
|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      | 
|Joint Ventures with Contractual Termination Dates:          |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      |  |       |   |  |  |      
|                                                            | The Plaza at La Jolla Village  |          |  | San Diego, CA     |             |  |                  | 635,419      |  |                    |           | 423,634   |  |      |  | 66.7  | % |  |  | 66.7  | %
|                                                            | 222 Berkley Street             |          |  | Boston, MA        |             |  |                  | 519,608      |  |                    |           | 475,441   |  |      |  | 91.5  | % |  |  | 91.5  | %
|                                                            | 500 Boylston Street            |          |  | Boston, MA        |             |  |                  | 706,864      |  |                    |           | 646,781   |  |      |  | 91.5  | % |  |  | 91.5  | %
|                                                            | Wells Fargo Center             |          |  | Minneapolis, MN   |             |  |                  | 1,117,439    |  |                    |           | 838,079   |  |      |  | 75.0  | % |  |  | 75.0  | %
|                                                            | Ferry Building(a)              |          |  | San Francisco, CA |             |  |                  | 243,812      |  |                    |           | 243,812   |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | 2951 28th Street               |          |  | Santa Monica, CA  |             |  |                  | 85,000       |  |                    |           | 83,300    |  |      |  | 98.0  | % |  |  | 98.0  | %
|                                                            | San Felipe Plaza(b)            |          |  | Houston, TX       |             |  |                  |             |  |                    |           |          |  |      |  |      |   |  |  | 100.0 | %
|                                                            | Four Forest Plaza(b)           |          |  | Dallas, TX        |             |  |                  |             |  |                    |           |          |  |      |  |      |   |  |  | 100.0 | %
|                                                            | Market Square                  |          |  | Washington, D.C.  |             |  |                  | 681,051      |  |                    |           | 681,051   |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | One Ninety One Peachtree Tower |          |  | Atlanta, GA       |             |  |                  | 1,215,288    |  |                    |           | 1,215,288 |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | Brea Corporate Plaza           |          |  | Brea, CA          |             |  |                  | 117,195      |  |                    |           | 117,195   |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | Northborough Tower(b)          |          |  | Houston, TX       |             |  |                  |             |  |                    |           |          |  |      |  |      |   |  |  | 100.0 | %
|                                                            | Sixty State Street             |          |  | Boston, MA        |             |  |                  | 823,014      |  |                    |           | 823,014   |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | Worldwide Plaza Amenities      |          |  | New York, NY      |             |  |                  | 108,391      |  |                    |           | 108,391   |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      | 
|Total Joint Ventures with Contractual Termination Dates:    |                                |          |  |                   |             |  | 6,253,081        |              |  |                    | 5,655,986 |           |  |      |  |       |   |  |  |      
|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      | 
|Joint Ventures without Contractual Termination Dates:       |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      |  |       |   |  |  |      
|                                                            | Waters Edge(b)                |          |  | Playa Vista, CA   |             |  |                  |             |  |                    |           |          |  |      |  |      |   |  |  | 87.5  | %
|                                                            | Park Avenue Tower              |          |  | New York, NY      |             |  |                  | 568,060      |  |                    |           | 568,060   |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | 850 Third Avenue               |          |  | New York, NY      |             |  |                  | 568,867      |  |                    |           | 563,178   |  |      |  | 99.0  | % |  |  | 99.0  | %
|                                                            | Washington Mutual Tower        |          |  | Seattle, WA       |             |  |                  | 1,207,823    |  |                    |           | 905,867   |  |      |  | 75.0  | % |  |  | 75.0  | %
|                                                            | 1301 Avenue of the Americas    |          |  | New York, NY      |             |  |                  | 1,765,694    |  |                    |           | 1,765,694 |  |      |  | 100.0 | % |  |  | 100.0 | %
|                                                            | SunAmerica Center              |          |  | Century City, CA  |             |  |                  | 780,063      |  |                    |           | 524,772   |  |      |  | 67.27 | % |  |  | 67.27 | %
|                                                            | Concar(b)                      |          |  | San Mateo, CA     |             |  |                  |             |  |                    |           |          |  |      |  |      |   |  |  | 79.96 | %
|                                                            | Dulles Station(b)              |          |  | Herndon, VA       |             |  |                  |             |  |                    |           |          |  |      |  |      |   |  |  | 70.0  | %
|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      | 
|Total Joint Ventures without Contractual Termination Dates: |                                |          |  |                   |             |  | 4,890,507        |              |  |                    | 4,327,571 |           |  |      |  |       |   |  |  |      
|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      | 
|Total                                                       |                                |          |  |                   |             |  | 11,143,588       |              |  |                    | 9,983,557 |           |  |      |  |       |   |  |  |      
|                                                            |                                |          |  |                   |             |  |                  |              |  |                    |           |           |  |      | 






|    |  |                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | A joint venture between us and other unaffiliated parties leased
    the Ferry Building from the City and County of
    San Francisco, through its Port Commission (the
    Port). Under this lease, the Port is paid a

112



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 14  MINORITY INTERESTS IN PARTIALLY
OWNED PROPERTIES  (continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | stated base rent. In addition, once the joint venture has
    received from the project a cumulative preferred return of 8%
    (prior to stabilization) and 11% (after stabilization), then 50%
    of the proceeds from the operation and ownership of the project
    are paid to the Port as percentage rent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | The joint venture redeveloped the Ferry Building in a manner to
    permit the use of federal rehabilitation tax credits
    (Historic Tax Credits). Since the original members
    of the joint venture could not take full advantage of the
    Historic Tax Credits, the joint venture admitted a new member
    who could do so. This investor member contributed
    $24.7 million in equity and is entitled to a 3% preferred
    return. This investor members interest is subject to
    put/call rights during 2009 and 2010. Upon the purchase of the
    investor members interest pursuant to the put/call, it is
    estimated that the joint venture will retain $11 million of
    the capital contributed by the investor member (based on a
    formula to determine the purchase price for the investor
    members interest and after taking into account the
    preferred return that will have been paid to the investor member
    by such time).
|   
|    |  | Through the creation of a master lease, our effective ownership
    percentage in the net cash flow of the Ferry Building project is
    100% after the payment to the Port of the percentage rent
    described above and the distribution of the preferred returns.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(b) |  | During 2005, we sold our entire interests in these properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



|          |                                                                     
|--------- | --------------------------------------------------------------------
|NOTE 15  | SHAREHOLDERS EQUITY AND MANDATORILY REDEEMABLE
    PREFERRED SHARES

Common Shares




|                            |                                                                                                                                                            |                     |             |             |      |  |             |            |  
|--------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | ----------- | ----------- | ---- |  | ----------- | ---------- | -
|                            |                                                                                                                                                            | For the years ended |            
|                            |                                                                                                                                                            | December 31,        |            
|                            |                                                                                                                                                            |                     |            
|                            |                                                                                                                                                            | 2005                |             |             | 2004 | 
|                            |                                                                                                                                                            |                     |             |             |      | 
|Outstanding at January 1,   |                                                                                                                                                            |                     | 403,842,441 |             |      |  | 400,460,388 |           
|                            | Repurchased and retired under our open market repurchase program
    (at an average purchase price of $30.68 and $25.80 per
    share, respectively)(a)    |                     |             | (30,986,900 | )    |  |             | (1,260,600 | )
|                            | Repurchased and retired under our Supplemental Retirement
    Savings Plan (at an average purchase price of $31.44 and
    $29.44 per share, respectively) |                     |             | (267,410    | )    |  |             | (152,630   | )
|                            | Repurchased in 2004 under our Supplemental Retirement Savings
    Plan, but retired in 2005 (at an average purchase price of
    $29.63 per share)         |                     |             | (25,728     | )    |  |             |           |  
|                            | Issued upon exercise of share options                                                                                                                      |                     |             | 5,256,055   |      |  |             | 2,489,462  |  
|                            | Issued upon redemption of Units                                                                                                                            |                     |             | 2,114,915   |      |  |             | 1,390,129  |  
|                            | Restricted shares issued to employees, net of cancellations                                                                                                |                     |             | 720,612     |      |  |             | 915,692    |  
|                            | Common Shares issued as compensation for Board of Trustee fees                                                                                             |                     |             | 20,915      |      |  |             |           |  
|                            | Issued upon conversion of 70 Series B Preferred Shares                                                                                                     |                     |             | 98          |      |  |             |           |  
|                            |                                                                                                                                                            |                     |             |             |      | 
|Outstanding at December 31, |                                                                                                                                                            |                     | 380,674,998 |             |      |  | 403,842,441 |           
|                            |                                                                                                                                                            |                     |             |             |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Under our open market repurchase program announced in July 2002,
    as amended, we have been authorized to repurchase in the open
    market or in privately-negotiated transactions up to
    $2.1 billion of Common Shares through May 31, 2006. As
    of December 31, 2005, $557.3 million of Common Shares
    are available for repurchase under the program. Common Shares
    repurchased to fund our employee benefit programs, including the
    Employee Share Purchase Plan and Supplemental Retirement Savings
    Plan, are

113



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                                                                   
|--------- | ----------------------------------------------------------------------------------
|NOTE 15  | SHAREHOLDERS EQUITY AND MANDATORILY REDEEMABLE
    PREFERRED SHARES  (continued)



| |                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | not considered part of the repurchase program. During the years
    ended December 31, 2005 and 2004, 30,986,900 and 1,260,600
    Common Shares were repurchased under our open market purchase
    program for $950.7 million and $32.5 million, respectively.

Distributions




Mandatorily Redeemable Preferred Shares




Preferred Shares


The Effect on the
Calculation of Earnings per Share for the Redemption or Induced
Conversion of Preferred Stock.




|            |  |                                  |        |  |      |   |            |      |  |   |           | 
|----------- |  | -------------------------------- | ------ |  | ---- | - | ---------- | ---- |  | - | --------- | 
|            |  | For the years ended December 31, |       
|            |  |                                  |       
|            |  | 2005                             |        |  | 2004 |   |            | 2003 | 
|            |  |                                  |        |  |      |   |            |      | 
|Series B    |  | $                                | 2.625  |  |      | $ | 2.625      |      |  | $ | 2.625     | 
|Series C(a) |  | $                                |       |  |      | $ | 0.12578125 |      |  | $ | 2.15625   | 
|Series E(b) |  | $                                |       |  |      | $ |           |      |  | $ | 1.3015625 | 
|Series F(c) |  | $                                |       |  |      | $ |           |      |  | $ | 1.00      | 
|Series G    |  | $                                | 1.9375 |  |      | $ | 1.9375     |      |  | $ | 1.9375    | 






|    |                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In January 2004, we redeemed all 4,562,900 outstanding 8.625%
    Series C Cumulative Redeemable Preferred Shares of
    Beneficial Interest (Series C). The
    Series C were redeemed at a redemption price of
    $25.00 per share for an aggregate redemption price of
    $114.1 million. The deferred issuance costs of $4.1 million
    were reflected as a preferred distribution.
|   
|(b) | In June 2003, we redeemed all 6,000,000 outstanding 7.875%
    Series E Cumulative Redeemable Preferred Shares, which were
    issued in connection with the Spieker Merger, at a redemption
    price of $25.00 per share for an aggregate redemption price
    of $151.9 million, which includes $1.9 million of
    accrued and unpaid distributions.                                    

114



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                                                                   
|--------- | ----------------------------------------------------------------------------------
|NOTE 15  | SHAREHOLDERS EQUITY AND MANDATORILY REDEEMABLE
    PREFERRED SHARES  (continued)



|    |                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | In June 2003, we redeemed all 4,000,000 outstanding 8.0%
    Series F Cumulative Redeemable Preferred Shares, which were
    issued in connection with the Spieker Merger, at a redemption
    price of $25.00 per share for an aggregate redemption price
    of $100.0 million.

Accumulated Other Comprehensive Loss




|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 |                |  |               |         |  |             |                 |        |              |       |   |               |   |  |   |        |   |  |   |         |  
|---------------------------- |  | ------------------------------------ | ------- | ---------------- | -------------- | - | ---------------- | ----------- | -------------- | - | --------------- | -------------- |  | ------------- | ------- |  | ----------- | --------------- | ------ | ------------ | ----- | - | ------------- | - |  | - | ------ | - |  | - | ------- | -
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 | Investments    |  |               |        
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 | in Marketable  |  |               |        
|                             |  |                                      |         | Securities       |                |   |                 
|                             |  | Forward-Starting Interest Rate Swaps |         |                  |                |   |                  |            
|                             |  |                                      |         |                  |                |   | Reclassification |             |                |  
|                             |  |                                      |         | Reclassification |                |   |                  |             | Unrealized     |   |                 | adjustment for |  |               |        
|                             |  |                                      |         | Reversal of      |                |   |                  |             | of ineffective |   |                 | Amortization   |  |               | holding |  |             | realized losses |        |              | Total |  
|                             |  | Unrealized                           |         |                  | unrealized     |   |                  | Proceeds    |                |   | portion of swap |                |  | of (proceeds) |         |  | gains       |                 |        | (gains) from |       |   | Accumulated   |  
|                             |  | holding                              |         |                  | holding (gain) |   |                  | (payments)  |                |   | settlement      |                |  | payments      |         |  | (losses)    |                 |        | investments  |       |   | Other         |  
|                             |  | (losses)                             |         |                  | loss on        |   |                  | from        |                |   | payment to net  |                |  | from          |         |  | from        |                 |        | included in  |       |   | Comprehensive |  
|                             |  | gains                                |         |                  | settlements    |   |                  | settlements |                |   | income          |                |  | settlements   |         |  | investments |                 |        | net income   |       |   | Loss          |  
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 |                |  |               |         |  |             |                 |        |              |       |   |               |  
|                             |  | (Dollars in thousands)               |        
|Balance at December 31, 2002 |  | $                                    | (18,611 | )                |                | $ |                 |             |                | $ |                |                |  | $             |        |  |             | $               |       |              |       | $ | 280           |   |  | $ | 116    |   |  | $ | (18,215 | )
|Change during the period     |  |                                      | 8,930   |                  |                |   | (768             | )           |                |   | 768             |                |  |               |        |  |             |                 | (73    | )            |       |   | 848           |   |  |   | (1,142 | ) |  |   | 8,562   |  
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 |                |  |               |         |  |             |                 |        |              |       |   |               |  
|Balance at December 31, 2003 |  |                                      | (9,682  | )                |                |   | (768             | )           |                |   | 768             |                |  |               |        |  |             |                 | (73    | )            |       |   | 1,128         |   |  |   | (1,026 | ) |  |   | (9,653  | )
|Change during the period     |  |                                      | (34,665 | )                |                |   | 45,115           |             |                |   | (69,130         | )              |  |               | 212     |  |             |                 | 5,206  |              |       |   | 23            |   |  |   | (31    | ) |  |   | (53,270 | )
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 |                |  |               |         |  |             |                 |        |              |       |   |               |  
|Balance at December 31, 2004 |  |                                      | (44,347 | )                |                |   | 44,347           |             |                |   | (68,362         | )              |  |               | 212     |  |             |                 | 5,133  |              |       |   | 1,151         |   |  |   | (1,057 | ) |  |   | (62,923 | )
|Change during the period     |  |                                      |        |                  |                |   |                 |             |                |   |                |                |  |               |        |  |             |                 | 6,815  |              |       |   | (250          | ) |  |   |       |   |  |   | 6,565   |  
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 |                |  |               |         |  |             |                 |        |              |       |   |               |  
|Balance at December 31, 2005 |  | $                                    | (44,347 | )                |                | $ | 44,347           |             |                | $ | (68,362         | )              |  | $             | 212     |  |             | $               | 11,948 |              |       | $ | 901           |   |  | $ | (1,057 | ) |  | $ | (56,358 | )
|                             |  |                                      |         |                  |                |   |                  |             |                |   |                 |                |  |               |         |  |             |                 |        |              |       |   |               |  

NOTE 16  FUTURE MINIMUM RENTS




|           |       |                      |           |            | 
|---------- | ----- | -------------------- | --------- | ---------- | 
|Year       |       | Dollars in thousands
|           |       |                     
|2006       |       | $                    | 2,356,994 |           
|2007       |       |                      | 2,164,140 |           
|2008       |       |                      | 1,917,083 |           
|2009       |       |                      | 1,632,476 |           
|2010       |       |                      | 1,331,385 |           
|Thereafter |       |                      | 3,889,649 |           
|           |       |                      |           |           
|           | Total |                      | $         | 13,291,727 | 
|           |       |                      |           |           



115



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 17  FUTURE MINIMUM LEASE PAYMENTS




|           |       |                      |           |           | 
|---------- | ----- | -------------------- | --------- | --------- | 
|Year       |       | Dollars in thousands
|           |       |                     
|2006       |       | $                    | 22,124    |          
|2007       |       |                      | 22,119    |          
|2008       |       |                      | 21,855    |          
|2009       |       |                      | 21,644    |          
|2010       |       |                      | 21,733    |          
|Thereafter |       |                      | 1,211,027 |          
|           |       |                      |           |          
|           | Total |                      | $         | 1,320,502 | 
|           |       |                      |           |          



116



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                   
|--------- | ------------------
|NOTE 18  | EARNINGS PER SHARE



|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |            |   |             |            |            | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------------------------------ | ----------- | ---------- | ---------- | - | ----------- | ---------- | ---------- | - | ----------- | ---------- | ---------- | 
|                                                                                                                                                                                 |                                     | For the years ended December 31,                 |            
|                                                                                                                                                                                 |                                     |                                                  |            
|                                                                                                                                                                                 |                                     | 2005                                             |             |            | 2004       |   |             | 2003       |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|                                                                                                                                                                                 |                                     | (Dollars in thousands, except per share amounts) |            
|Numerator:                                                                                                                                                                       |                                     |                                                  |             |            |            |   |             |            |            |   |             |           
|Income from continuing operations                                                                                                                                                |                                     | $                                                | 203,894     |            |            | $ | 253,811     |            |            | $ | 430,603     |           
|Preferred distributions                                                                                                                                                          |                                     |                                                  | (34,803     | )          |            |   | (39,093     | )          |            |   | (51,872     | )         
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Income from continuing operations available to common
    shareholders                                                                                                           |                                     |                                                  | 169,091     |            |            |   | 214,718     |            |            |   | 378,731     |           
|Discontinued operations (including net gain on sales of real
    estate and provision for (loss) on properties held for sale of
    $(22,082), $5,473 and $61,953, respectively) |                                     |                                                  | (160,955    | )          |            |   | (82,807     | )          |            |   | 224,459     |           
|Cumulative effect of a change in accounting principle                                                                                                                            |                                     |                                                  |            |            |            |   | (33,697     | )          |            |   |            |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Numerator for basic earnings per share  net income
    available to common shareholders                                                                                         |                                     |                                                  | 8,136       |            |            |   | 98,214      |            |            |   | 603,190     |           
|Add back income allocated to minority interests in EOP
    Partnership                                                                                                           |                                     |                                                  | 907         |            |            |   | 11,747      |            |            |   | 74,152      |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Numerator for diluted earnings per share  net income
    available to common shareholders                                                                                       |                                     | $                                                | 9,043       |            |            | $ | 109,961     |            |            | $ | 677,342     |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Denominator:                                                                                                                                                                     |                                     |                                                  |             |            |            |   |             |            |            |   |             |           
|Denominator for basic earnings per share  weighted
    average Common Shares outstanding                                                                                        |                                     |                                                  | 403,147,751 |            |            |   | 400,755,733 |            |            |   | 401,016,093 |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Effect of dilutive potential common shares:                                                                                                                                      |                                     |                                                  |             |            |            |   |             |            |            |   |             |           
|                                                                                                                                                                                 | Units                               |                                                  |             | 45,199,136 |            |   |             | 48,163,569 |            |   |             | 49,578,372 |           
|                                                                                                                                                                                 | Share options and restricted shares |                                                  |             | 3,699,568  |            |   |             | 2,077,945  |            |   |             | 1,966,888  |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|                                                                                                                                                                                 |                                     | Dilutive potential common shares                 |             |            | 48,898,704 |   |             |            | 50,241,514 |   |             |            | 51,545,260 | 
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Denominator for diluted earnings per share  weighted
    average Common Shares outstanding and dilutive potential common
    shares                                             |                                     |                                                  | 452,046,455 |            |            |   | 450,997,247 |            |            |   | 452,561,353 |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Earnings per share  basic:                                                                                                                                                      |                                     |                                                  |             |            |            |   |             |            |            |   |             |           
|Income from continuing operations available to common
    shareholders, net of minority interests                                                                                |                                     | $                                                | 0.38        |            |            | $ | 0.50        |            |            | $ | 1.01        |           
|Discontinued operations, net of minority interests                                                                                                                               |                                     |                                                  | (0.36       | )          |            |   | (0.18       | )          |            |   | 0.50        |           
|Cumulative effect of a change in accounting principle, net of
    minority interests                                                                                             |                                     |                                                  |            |            |            |   | (0.08       | )          |            |   |            |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Net income available to common shareholders, net of minority
    interests(a)                                                                                                    |                                     | $                                                | 0.02        |            |            | $ | 0.25        |            |            | $ | 1.50        |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Earnings per share  diluted:                                                                                                                                                    |                                     |                                                  |             |            |            |   |             |            |            |   |             |           
|Income from continuing operations available to common
    shareholders                                                                                                           |                                     | $                                                | 0.38        |            |            | $ | 0.50        |            |            | $ | 1.00        |           
|Discontinued operations                                                                                                                                                          |                                     |                                                  | (0.36       | )          |            |   | (0.18       | )          |            |   | 0.50        |           
|Cumulative effect of a change in accounting principle                                                                                                                            |                                     |                                                  |            |            |            |   | (0.07       | )          |            |   |            |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           
|Net income available to common shareholders(a)                                                                                                                                   |                                     | $                                                | 0.02        |            |            | $ | 0.24        |            |            | $ | 1.50        |           
|                                                                                                                                                                                 |                                     |                                                  |             |            |            |   |             |            |           

117



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                 
|--------- | --------------------------------
|NOTE 18  | EARNINGS PER SHARE  (continued)






|    |                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------
|(a) | Net income available to common shareholders per share may not
    total the sum of the per share components due to rounding.



|                             |       |                  |        |                                  |  |      |           |           |  |  |            |            |  |  |            |            | 
|---------------------------- | ----- | ---------------- | ------ | -------------------------------- |  | ---- | --------- | --------- |  |  | ---------- | ---------- |  |  | ---------- | ---------- | 
|                             |       |                  |        | For the years ended December 31,
|                             |       | Weighted Average |        |                                 
|Antidilutive Securities      |       | Exercise Price   |        | 2005                             |  | 2004 |           | 2003     
|                             |       |                  |        |                                  |  |      |           |          
|Share options                |       | $                | 32.960 |                                  |  |      | 562,765   |           |  |  |           |            |  |  |           |           
|Share options                |       | $                | 29.134 |                                  |  |      |          |           |  |  | 15,153,748 |            |  |  |           |           
|Share options                |       | $                | 29.220 |                                  |  |      |          |           |  |  |           |            |  |  | 13,436,967 |           
|Series B Preferred Shares(b) |       | $                | 35.700 |                                  |  |      | 8,389,265 |           |  |  | 8,389,354  |            |  |  | 8,389,354  |           
|                             |       |                  |        |                                  |  |      |           |           |  |  |            |            |  |  |            |           
|                             | Total |                  |        |                                  |  |      |           | 8,952,030 |  |  |            | 23,543,102 |  |  |            | 21,826,321 | 
|                             |       |                  |        |                                  |  |      |           |           |  |  |            |            |  |  |            |           






|    |  |                                                                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | The amounts shown represent the resulting Common Shares upon
    conversion (see Note 15  Shareholders
    Equity and Mandatorily Redeemable Preferred Shares).





|          |                    
|--------- | -------------------
|NOTE 19  | SEGMENT INFORMATION



|                             |                       |                                           |   |           |           |  |   |           |           |  |   |           |           | 
|---------------------------- | --------------------- | ----------------------------------------- | - | --------- | --------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                             |                       | As of or for the years ended December 31, |  
|                             |                       |                                           |  
|                             |                       | 2005                                      |   |           | 2004      |  |   | 2003      |          
|                             |                       |                                           |   |           |           |  |   |           |          
|                             |                       | (Dollars in thousands)                    |  
|Property Operating Revenues: |                       |                                           |   |           |           |  |   |           |           |  |   |          
|                             | Rental                |                                           | $ | 2,340,922 |           |  | $ | 2,278,286 |           |  | $ | 2,224,934 |          
|                             | Tenant reimbursements |                                           |   | 422,436   |           |  |   | 403,816   |           |  |   | 405,290   |          
|                             | Parking               |                                           |   | 114,057   |           |  |   | 108,061   |           |  |   | 103,107   |          
|                             | Other(a)              |                                           |   | 105,434   |           |  |   | 69,643    |           |  |   | 76,628    |          
|                             |                       |                                           |   |           |           |  |   |           |          
|                             |                       | Total Property Operating Revenues         |   |           | 2,982,849 |  |   |           | 2,859,806 |  |   |           | 2,809,959 | 
|                             |                       |                                           |   |           |           |  |   |           |          

118



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                  
|--------- | ---------------------------------
|NOTE 19  | SEGMENT INFORMATION  (continued)

|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |           |   |           |          |           |  
|-------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------- | -------- | --------- | - | --------- | -------- | --------- | - | --------- | -------- | --------- | -
|                                                                                                                     |                                                                                                                                                   | As of or for the years ended December 31,                |          
|                                                                                                                     |                                                                                                                                                   |                                                          |          
|                                                                                                                     |                                                                                                                                                   | 2005                                                     |           |          | 2004      |   |           | 2003     |          
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|                                                                                                                     |                                                                                                                                                   | (Dollars in thousands)                                   |          
|Property Operating Expenses:                                                                                         |                                                                                                                                                   |                                                          |           |          |           |   |           |          |           |   |           |         
|                                                                                                                     | Real estate taxes                                                                                                                                 |                                                          |           | 339,006  |           |   |           | 324,481  |           |   |           | 305,588  |          
|                                                                                                                     | Insurance                                                                                                                                         |                                                          |           | 59,567   |           |   |           | 29,521   |           |   |           | 19,846   |          
|                                                                                                                     | Repairs and maintenance                                                                                                                           |                                                          |           | 340,904  |           |   |           | 312,928  |           |   |           | 297,677  |          
|                                                                                                                     | Property operating                                                                                                                                |                                                          |           | 441,834  |           |   |           | 390,454  |           |   |           | 370,487  |          
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|                                                                                                                     |                                                                                                                                                   | Total Property Operating Expenses                        |           |          | 1,181,311 |   |           |          | 1,057,384 |   |           |          | 993,598   |  
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|                                                                                                                     |                                                                                                                                                   | Property Net Operating Income from Continuing Operations |           | $        | 1,801,538 |   |           | $        | 1,802,422 |   |           | $        | 1,816,361 |  
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|Property Operating Margin from Continuing Operations(b)                                                              |                                                                                                                                                   |                                                          | 60.4      | %        |           |   | 63.0      | %        |           |   | 64.6      | %       
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|Reconciliation of Property Net Operating Income from
    Continuing Operations to Income from Continuing Operations: |                                                                                                                                                   |                                                          |           |          |           |   |           |          |           |   |           |         
|Property Net Operating Income from Continuing Operations                                                             |                                                                                                                                                   | $                                                        | 1,801,538 |          |           | $ | 1,802,422 |          |           | $ | 1,816,361 |         
|Add: Fee income                                                                                                      |                                                                                                                                                   |                                                          | 17,740    |          |           |   | 14,226    |          |           |   | 15,861    |         
|Less:                                                                                                                |                                                                                                                                                   |                                                          |           |          |           |   |           |          |           |   |           |         
|                                                                                                                     | Depreciation                                                                                                                                      |                                                          |           | (656,102 | )         |   |           | (614,748 | )         |   |           | (561,033 | )        
|                                                                                                                     | Amortization                                                                                                                                      |                                                          |           | (93,663  | )         |   |           | (72,954  | )         |   |           | (56,428  | )        
|                                                                                                                     | Ground rent                                                                                                                                       |                                                          |           | (22,517  | )         |   |           | (20,912  | )         |   |           | (20,227  | )        
|                                                                                                                     | Corporate general and administrative                                                                                                              |                                                          |           | (66,536  | )         |   |           | (52,242  | )         |   |           | (62,479  | )        
|                                                                                                                     | Impairment                                                                                                                                        |                                                          |           | (65,738  | )         |   |           | (38,534  | )         |   |           |         |          
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|Operating Income                                                                                                     |                                                                                                                                                   |                                                          | 914,722   |          |           |   | 1,017,258 |          |           |   | 1,132,055 |         
|Less:                                                                                                                |                                                                                                                                                   |                                                          |           |          |           |   |           |          |           |   |           |         
|                                                                                                                     | Other expenses                                                                                                                                    |                                                          |           | (815,672 | )         |   |           | (811,660 | )         |   |           | (791,592 | )        
|                                                                                                                     | Income taxes                                                                                                                                      |                                                          |           | 272      |           |   |           | (1,981   | )         |   |           | (5,429   | )        
|                                                                                                                     | Minority interests:                                                                                                                               |                                                          |           |          |           |   |           |          |           |   |           |          |          
|                                                                                                                     |                                                                                                                                                   | EOP Partnership                                          |           |          | (907      | ) |           |          | (11,747   | ) |           |          | (74,152   | )
|                                                                                                                     |                                                                                                                                                   | Partially owned properties                               |           |          | (9,825    | ) |           |          | (10,264   | ) |           |          | (9,271    | )
|Add:                                                                                                                 |                                                                                                                                                   |                                                          |           |          |           |   |           |          |           |   |           |         
|                                                                                                                     | Income from investments in unconsolidated joint ventures
    (including gain on sales of real estate of $26,499, $0 and
    $7,063, respectively) |                                                          |           | 68,996   |           |   |           | 50,304   |           |   |           | 79,882   |          
|                                                                                                                     | Gain on sales of real estate                                                                                                                      |                                                          |           | 46,308   |           |   |           | 21,901   |           |   |           | 99,110   |          
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|Income from Continuing Operations                                                                                    |                                                                                                                                                   | $                                                        | 203,894   |          |           | $ | 253,811   |          |           | $ | 430,603   |         
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|Capital and tenant improvements and lease commissions                                                                |                                                                                                                                                   | $                                                        | 471,020   |          |           | $ | 565,538   |          |           | $ | 545,183   |         
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          
|Investments in unconsolidated joint ventures                                                                         |                                                                                                                                                   | $                                                        | 947,557   |          |           | $ | 1,116,748 |          |           | $ | 1,128,175 |         
|                                                                                                                     |                                                                                                                                                   |                                                          |           |          |           |   |           |          |          






|    |  |                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------
|(a) |  | Other income consists primarily of income from early lease
    terminations and ancillary income from tenants.       
|   
|(b) |  | Defined as Property Net Operating Income from Continuing
    Operations divided by Total Property Operating Revenues.

119



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 20  QUARTERLY DATA (UNAUDITED)


|                                            |                             |                                                  |         |      |         |   |         |         |  |   |          |       |   |   |         |      | 
|------------------------------------------- | --------------------------- | ------------------------------------------------ | ------- | ---- | ------- | - | ------- | ------- |  | - | -------- | ----- | - | - | ------- | ---- | 
|                                            |                             | For the three months ended                       |        
|                                            |                             |                                                  |        
|                                            |                             | 12/31/05                                         |         |      | 9/30/05 |   |         | 6/30/05 |  |   | 3/31/05  |      
|                                            |                             |                                                  |         |      |         |   |         |         |  |   |          |      
|                                            |                             | (Dollars in thousands, except per share amounts) |        
|Total revenues(a)                           |                             | $                                                | 786,555 |      |         | $ | 732,081 |         |  | $ | 723,839  |       |   | $ | 758,114 |     
|Operating income(a)                         |                             | $                                                | 177,291 |      |         | $ | 221,652 |         |  | $ | 220,689  |       |   | $ | 295,089 |     
|(Loss) income from continuing operations(a) |                             | $                                                | (6,897  | )    |         | $ | 70,746  |         |  | $ | 63,150   |       |   | $ | 76,895  |     
|Discontinued operations(a)                  |                             | $                                                | 34,560  |      |         | $ | 31,700  |         |  | $ | (259,891 | )     |   | $ | 32,676  |     
|Net income (loss)                           |                             | $                                                | 27,663  |      |         | $ | 102,446 |         |  | $ | (196,741 | )     |   | $ | 109,571 |     
|Earnings (loss) per share  basic:          |                             |                                                  |         |      |         |   |         |         |  |   |          |       |   |   |         |     
|                                            | Net income (loss) per share |                                                  | $       | 0.05 |         |   | $       | 0.23    |  |   | $        | (0.51 | ) |   | $       | 0.25 | 
|Earnings (loss) per share  diluted:        |                             |                                                  |         |      |         |   |         |         |  |   |          |       |   |   |         |     
|                                            | Net income (loss) per share |                                                  | $       | 0.05 |         |   | $       | 0.23    |  |   | $        | (0.51 | ) |   | $       | 0.25 | 






|    |                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The amounts presented for the first three quarters are not equal
    to the same amounts previously reported in
    Form 10-Q for each
    period as a result of discontinued operations. Below is a
    reconciliation to the amounts previously reported in
    Form 10-Q:

|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|--------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ------- | - | -------- | ------- |  | - | ------- | -
|                                                                                                          |  | For the three months ended |        
|                                                                                                          |  |                            |        
|                                                                                                          |  | 9/30/05                    |         |   | 6/30/05 |   |          | 3/31/05 | 
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|                                                                                                          |  | (Dollars in thousands)     |        
|Total revenues previously reported                                                                        |  | $                          | 738,594 |   |         | $ | 757,093  |         |  | $ | 825,756 |  
|Discontinued operations                                                                                   |  |                            | (6,513  | ) |         |   | (33,254  | )       |  |   | (67,642 | )
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Revised total revenues                                                                                    |  | $                          | 732,081 |   |         | $ | 723,839  |         |  | $ | 758,114 |  
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Operating income previously reported                                                                      |  | $                          | 223,554 |   |         | $ | 77,819   |         |  | $ | 316,559 |  
|Discontinued operations                                                                                   |  |                            | (1,902  | ) |         |   | 142,870  |         |  |   | (21,470 | )
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Revised operating income                                                                                  |  | $                          | 221,652 |   |         | $ | 220,689  |         |  | $ | 295,089 |  
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Income (loss) from continuing operations previously reported                                              |  | $                          | 72,903  |   |         | $ | (79,647  | )       |  | $ | 98,040  |  
|Discontinued operations                                                                                   |  |                            | (2,157  | ) |         |   | 142,797  |         |  |   | (21,145 | )
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Revised income from continuing operations                                                                 |  | $                          | 70,746  |   |         | $ | 63,150   |         |  | $ | 76,895  |  
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Discontinued operations previously reported                                                               |  | $                          | 29,543  |   |         | $ | (117,094 | )       |  | $ | 11,531  |  
|Additional discontinued operations from properties sold
    subsequent to the respective reporting period |  |                            | 2,157   |   |         |   | (142,797 | )       |  |   | 21,145  |  
|                                                                                                          |  |                            |         |   |         |   |          |         | 
|Revised discontinued operations                                                                           |  | $                          | 31,700  |   |         | $ | (259,891 | )       |  | $ | 32,676  |  
|                                                                                                          |  |                            |         |   |         |   |          |         | 

120



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 20  QUARTERLY DATA
(UNAUDITED)  (continued)


|                                                                               |                                                                                          |                                                  |         |      |         |   |          |         |   |   |         |      |  |   |         |      | 
|------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------- | ------------------------------------------------ | ------- | ---- | ------- | - | -------- | ------- | - | - | ------- | ---- |  | - | ------- | ---- | 
|                                                                               |                                                                                          | For the three months ended                       |        
|                                                                               |                                                                                          |                                                  |        
|                                                                               |                                                                                          | 12/31/04                                         |         |      | 9/30/04 |   |          | 6/30/04 |   |   | 3/31/04 |     
|                                                                               |                                                                                          |                                                  |         |      |         |   |          |         |   |   |         |     
|                                                                               |                                                                                          | (Dollars in thousands, except per share amounts) |        
|Total revenues(b)                                                              |                                                                                          | $                                                | 738,724 |      |         | $ | 715,130  |         |   | $ | 713,591 |      |  | $ | 706,587 |     
|Operating income(b)                                                            |                                                                                          | $                                                | 248,060 |      |         | $ | 220,255  |         |   | $ | 267,577 |      |  | $ | 281,368 |     
|Income from continuing operations(b)                                           |                                                                                          | $                                                | 54,591  |      |         | $ | 41,341   |         |   | $ | 79,627  |      |  | $ | 78,257  |     
|Discontinued operations(b)                                                     |                                                                                          | $                                                | 15,448  |      |         | $ | (161,620 | )       |   | $ | 29,881  |      |  | $ | 33,479  |     
|Income (loss) before cumulative effect of a change in accounting
    principle |                                                                                          | $                                                | 70,039  |      |         | $ | (120,279 | )       |   | $ | 109,508 |      |  | $ | 111,736 |     
|Cumulative effect of a change in accounting principle                          |                                                                                          | $                                                |        |      |         | $ |         |         |   | $ |        |      |  | $ | (33,697 | )   
|Net income (loss)                                                              |                                                                                          | $                                                | 70,039  |      |         | $ | (120,279 | )       |   | $ | 109,508 |      |  | $ | 78,039  |     
|Earnings (loss) per share  basic:                                             |                                                                                          |                                                  |         |      |         |   |          |         |   |   |         |      |  |   |         |     
|                                                                               | Income (loss) before cumulative effect of a change in accounting
    principle per share |                                                  | $       | 0.15 |         |   | $        | (0.32   | ) |   | $       | 0.25 |  |   | $       | 0.23 | 
|Earnings (loss) per share  diluted:                                           |                                                                                          |                                                  |         |      |         |   |          |         |   |   |         |      |  |   |         |     
|                                                                               | Income (loss) before cumulative effect of a change in accounting
    principle per share |                                                  | $       | 0.15 |         |   | $        | (0.32   | ) |   | $       | 0.25 |  |   | $       | 0.23 | 






|    |                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The amounts presented for the four quarters are not equal to the
    same amounts previously reported in
    Form 10-Q or
    Form 10-K for each
    period as a result of discontinued operations. Below is a
    reconciliation to the amounts previously reported in
    Form 10-Q or
    Form 10-K:

|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ------- | - | -------- | ------- |  | - | ------- | - |  | - | ------- | -
|                                                                                                          |  | For the three months ended |        
|                                                                                                          |  |                            |        
|                                                                                                          |  | 12/31/04                   |         |   | 9/30/04 |   |          | 6/30/04 |  |   | 3/31/04 |  
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|                                                                                                          |  | (Dollars in thousands)     |        
|Total revenues previously reported                                                                        |  | $                          | 819,528 |   |         | $ | 721,883  |         |  | $ | 748,930 |   |  | $ | 777,803 |  
|Discontinued operations                                                                                   |  |                            | (80,804 | ) |         |   | (6,753   | )       |  |   | (35,339 | ) |  |   | (71,216 | )
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Revised total revenues                                                                                    |  | $                          | 738,724 |   |         | $ | 715,130  |         |  | $ | 713,591 |   |  | $ | 706,587 |  
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Operating income previously reported                                                                      |  | $                          | 266,594 |   |         | $ | 214,537  |         |  | $ | 278,723 |   |  | $ | 305,857 |  
|Discontinued operations                                                                                   |  |                            | (18,534 | ) |         |   | 5,718    |         |  |   | (11,146 | ) |  |   | (24,489 | )
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Revised operating income                                                                                  |  | $                          | 248,060 |   |         | $ | 220,255  |         |  | $ | 267,577 |   |  | $ | 281,368 |  
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Income from continuing operations previously reported                                                     |  | $                          | 72,821  |   |         | $ | 36,327   |         |  | $ | 90,749  |   |  | $ | 101,476 |  
|Discontinued operations                                                                                   |  |                            | (18,230 | ) |         |   | 5,014    |         |  |   | (11,122 | ) |  |   | (23,219 | )
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Revised income from continuing operations                                                                 |  | $                          | 54,591  |   |         | $ | 41,341   |         |  | $ | 79,627  |   |  | $ | 78,257  |  
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Discontinued operations previously reported                                                               |  | $                          | (2,782  | ) |         | $ | (156,606 | )       |  | $ | 18,759  |   |  | $ | 10,260  |  
|Additional discontinued operations from properties sold
    subsequent to the respective reporting period |  |                            | 18,230  |   |         |   | (5,014   | )       |  |   | 11,122  |   |  |   | 23,219  |  
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  
|Revised discontinued operations                                                                           |  | $                          | 15,448  |   |         | $ | (161,620 | )       |  | $ | 29,881  |   |  | $ | 33,479  |  
|                                                                                                          |  |                            |         |   |         |   |          |         |  |   |         |  

121



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 21  RELATED PARTY TRANSACTIONS




|                                                             |       |                        |       |       |      |   |       |       |  |   |       |       | 
|------------------------------------------------------------ | ----- | ---------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                                             |       | For the years ended    |      
|                                                             |       | December 31,           |      
|                                                             |       |                        |      
|                                                             |       | 2005                   |       |       | 2004 |   |       | 2003  | 
|                                                             |       |                        |       |       |      |   |       |       | 
|                                                             |       | (Dollars in thousands) |      
|Office rent(a)                                               |       | $                      | 4,726 |       |      | $ | 3,755 |       |  | $ | 3,959 |      
|Development fees, leasing commissions and management fees(b) |       |                        |      |       |      |   | 1,532 |       |  |   | 3,569 |      
|                                                             |       |                        |       |       |      |   |       |       | 
|                                                             | Total |                        | $     | 4,726 |      |   | $     | 5,287 |  |   | $     | 7,528 | 
|                                                             |       |                        |       |       |      |   |       |       | 
|Payable to related parties at year end(a)(b)(c)              |       | $                      | 1,018 |       |      | $ | 313   |       |  | $ | 273   |      
|                                                             |       |                        |       |       |      |   |       |       | 






|    |                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | We lease office space from Two North Riverside Plaza Joint
    Venture, a partnership composed of trusts established for the
    benefit of the families of Samuel Zell, the Chairman of our
    Board of Trustees (Mr. Zell), and Robert Lurie,
    a deceased former business partner of Mr. Zell. The term of
    the lease expires on May 31, 2014.



| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Amounts payable to related parties as of December 31, 2005
    and 2004 include $0.3 million of office rent expense
    incurred but not yet paid.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The amounts paid for the periods shown above were paid to an
    affiliate of William Wilson III, one of our trustees
    through May 2004. We entered into a joint venture agreement with
    Wilson Investors in 2000 for the purpose of developing,
    constructing, leasing and managing developments in northern
    California. We own 49.9% of Wilson/ Equity Office, LLC (W/
    EO) and Wilson Investors owns 50.1% of W/ EO. William
    Wilson III, through his ownership of Wilson Investors,
    indirectly owns 22% of W/ EO and 30% of any promote to which
    Wilson Investors is entitled under the joint venture agreement.
    Our investment in W/ EO as of December 31, 2004 and 2003
    was $0.4 million and $1.3 million, respectively, which
    represents an indirect interest in Concar (a consolidated office
    property sold during 2005). As of December 31, 2005, our
    investment in W/ EO was $0.4 million.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We created joint ventures with W/ EO and also, in certain cases,
    unaffiliated parties for the development of various office
    properties. We agreed to provide first mortgage financing to the
    ownership entities of each of these developments at the greater
    of 6.5% or LIBOR plus 3.25%, generally maturing 36 months
    after initial funding or earlier at our option, in the event
    alternative financing sources are available on terms reasonably
    acceptable to Wilson Investors and any unaffiliated party. The
    aggregate amount of any such financing would generally be capped
    at 70% of budgeted construction costs (76% in the case of
    Concar). At December 31, 2002, we had committed to make
    mortgage loans for Foundry Square IV and Concar totaling
    $96 million of which $74 million in principal and
    $0.4 million in accrued interest was outstanding. The
    mortgage loan for Foundry Square IV was repaid in 2003 in
    connection with the sale of the property. Following this sale,
    W/ EOs sole asset was its ownership interest in Concar.
    The total principal and interest outstanding on the mortgage
    loans at December 31, 2004 and 2003 was $40 million,
    which was repaid in 2005 in connection with the sale of Concar.
|
| | A Wilson Investors subsidiary provided development management
    services to the Foundry Square II, Ferry Building and
    Concar properties through project stabilization. In 2004, the
    final project reached stabilization and accordingly, the
    subsidiary of Wilson Investors has ceased providing development
    management services. We also engaged a subsidiary of Wilson
    Investors to provide leasing brokerage services for Foundry
    Square II and the Ferry Building. As of December 31,
    2003, $0.3 million was payable to Wilson Investors in
    relation to such services. These services for Foundry
    Square II were terminated by us and these services for the
    Ferry Building were terminated in part by us in January 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

122



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 21  RELATED PARTY
TRANSACTIONS  (continued)




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | We owned the San Felipe Plaza office property in a
    partnership with an affiliate of Mr. Zell. In accordance
    with the agreements governing the ownership of this property, we
    agreed to pay any capital gains tax incurred by the affiliate if
    the property was sold. As a result of the sale of this property
    in August 2005, we are obligated to pay $0.7 million to
    this affiliate, which is due in April 2006, to cover its capital
    gains tax liability.



| |                                      
| | -------------------------------------
| | Amounts Received from Related Parties











NOTE 22  SHARE-BASED EMPLOYEE COMPENSATION
PLANS






123



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 22  SHARE-BASED EMPLOYEE COMPENSATION
PLANS  (continued)










|                                               |  |                    |          |  |      |  |          |      |  |  |          | 
|---------------------------------------------- |  | ------------------ | -------- |  | ---- |  | -------- | ---- |  |  | -------- | 
|                                               |  | Options Granted in |         
|                                               |  |                    |         
|Assumptions:                                   |  | 2005               |          |  | 2004 |  |          | 2003 | 
|                                               |  |                    |          |  |      |  |          |      | 
|Risk-free interest rate                        |  |                    | 4.1%     |  |      |  | 3.6%     |      |  |  | 3.2%     | 
|Expected dividend yield                        |  |                    | 7.0%     |  |      |  | 7.0%     |      |  |  | 6.6%     | 
|Volatility                                     |  |                    | 0.21     |  |      |  | 0.21     |      |  |  | 0.22     | 
|Weighted average expected life of the Options  |  |                    | 7  years |  |      |  | 7  years |      |  |  | 7  years | 
|Weighted average fair value of Options granted |  |                    | $2.37    |  |      |  | $2.18    |      |  |  | $2.36    | 



124



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 22  SHARE-BASED EMPLOYEE COMPENSATION
PLANS  (continued)






|                             |                   |                    |            |                  |                |   |       |       | 
|---------------------------- | ----------------- | ------------------ | ---------- | ---------------- | -------------- | - | ----- | ----- | 
|                             |                   |                    |            | Weighted Average |               
|                             |                   | Common Shares      |            |                  | Exercise Price |  
|                             |                   | Subject to Options |            |                  | Per Option     |  
|                             |                   |                    |            |                  |                |  
|Balance at December 31, 2002 |                   |                    | 20,495,093 |                  |                | $ | 27.18 |      
|                             | Options granted   |                    |            | 3,550,017        |                |   |       | 24.70 | 
|                             | Options canceled  |                    |            | (1,358,070       | )              |   |       | 27.78 | 
|                             | Options exercised |                    |            | (1,661,333       | )              |   |       | 22.72 | 
|                             |                   |                    |            |                  |                |  
|Balance at December 31, 2003 |                   |                    | 21,025,707 |                  |                |   | 27.10 |      
|                             | Options granted   |                    |            | 3,929,195        |                |   |       | 28.50 | 
|                             | Options canceled  |                    |            | (1,237,162       | )              |   |       | 28.42 | 
|                             | Options exercised |                    |            | (2,489,462       | )              |   |       | 23.81 | 
|                             |                   |                    |            |                  |                |  
|Balance at December 31, 2004 |                   |                    | 21,228,278 |                  |                |   | 27.66 |      
|                             | Options granted   |                    |            | 4,003,203        |                |   |       | 29.59 | 
|                             | Options canceled  |                    |            | (303,206         | )              |   |       | 27.67 | 
|                             | Options exercised |                    |            | (5,256,055       | )              |   |       | 27.01 | 
|                             |                   |                    |            |                  |                |  
|Balance at December 31, 2005 |                   |                    | 19,672,220 |                  |                | $ | 28.23 |      
|                             |                   |                    |            |                  |                |  



|                         |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       |  |  |           |  |  |   |       | 
|------------------------ |  | ------------------- | ---------- | ---------------- | ------------------- |  | --------- | ----------------------- |  | - | ------- | --------- |  | ----- | ---------- |  | --------- | - | ----- | ----- |  |  | --------- |  |  | - | ----- | 
|                         |  | Options Outstanding |            |                  | Options Exercisable |  |           | Options Not Exercisable | 
|                         |  |                     |            |                  |                     |  |           |                         | 
|                         |  |                     |            | Weighted-        |                     |  |           |                         |  |   |        
|                         |  |                     |            | average          |                     |  | Weighted- |                         |  |   |         | Weighted- |  |       |            |  | Weighted- |  
|                         |  |                     |            | remaining        |                     |  | average   |                         |  |   |         | average   |  |       |            |  | average   |  
|                         |  |                     |            | contractual life |                     |  | exercise  |                         |  |   |         | exercise  |  |       |            |  | exercise  |  
|Range of Exercise Prices |  | Options             |            |                  | in years(a)         |  |           | price                   |  |   | Options |           |  | price |            |  | Options   |   |       | price | 
|                         |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       | 
|$18.10 to $23.40         |  |                     | 573,000    |                  |                     |  | 2.0       |                         |  | $ | 21.60   |           |  |       | 573,000    |  |           | $ | 21.60 |       |  |  |          |  |  | $ |      | 
|$24.23 to $26.95         |  |                     | 3,533,105  |                  |                     |  | 6.1       |                         |  |   | 24.66   |           |  |       | 2,654,738  |  |           |   | 24.62 |       |  |  | 878,367   |  |  |   | 24.80 | 
|$27.45 to $28.36         |  |                     | 3,395,856  |                  |                     |  | 5.8       |                         |  |   | 28.32   |           |  |       | 3,387,725  |  |           |   | 28.32 |       |  |  | 8,131     |  |  |   | 27.57 | 
|$28.54 to $29.19         |  |                     | 3,214,339  |                  |                     |  | 8.0       |                         |  |   | 28.56   |           |  |       | 1,017,874  |  |           |   | 28.60 |       |  |  | 2,196,465 |  |  |   | 28.54 | 
|$29.50 to $29.76         |  |                     | 5,490,685  |                  |                     |  | 6.9       |                         |  |   | 29.51   |           |  |       | 1,797,490  |  |           |   | 29.50 |       |  |  | 3,693,195 |  |  |   | 29.52 | 
|$29.98 to $33.30         |  |                     | 3,465,235  |                  |                     |  | 4.6       |                         |  |   | 30.53   |           |  |       | 3,382,699  |  |           |   | 30.48 |       |  |  | 82,536    |  |  |   | 32.73 | 
|                         |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       | 
|$18.10 to $33.30         |  |                     | 19,672,220 |                  |                     |  | 6.2       |                         |  | $ | 28.23   |           |  |       | 12,813,526 |  |           | $ | 28.01 |       |  |  | 6,858,694 |  |  | $ | 28.64 | 
|                         |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       | 






|    |                                                            
|--- | -----------------------------------------------------------
|(a) | Expiration dates ranged from January 2006 to December 2015.

Restricted Shares




125



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 22  SHARE-BASED EMPLOYEE COMPENSATION
PLANS  (continued)


Non-Qualified Purchase Plan




NOTE 23  401(K) PLAN




NOTE 24  COMMITMENTS AND CONTINGENCIES


Concentration of Credit Risk




Environmental




126



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 24  COMMITMENTS AND
CONTINGENCIES  (continued)


Litigation




Property Acquisitions








Contingencies


Accounting for
Contingencies,






127



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 24  COMMITMENTS AND
CONTINGENCIES  (continued)




Insurance


Property Damage, Business Interruption, Earthquake and
Terrorism:


|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                          
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Type of Insurance                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Third-Party Coverage                     
|Coverage                                     |  | Equity Office Loss Exposure/Deductible                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | Limitation                               
|                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                          
|Property damage and business interruption(a) |  | $50 million per occurrence and $75 million annual
    aggregate exposure (which includes amounts paid for earthquake
    loss), plus $1 million per occurrence deductible                                                                                                                                                                                                                                                                                                                                        |  | $1.0 billion per occurrence(c)           
|Earthquake(a)(b)                             |  | $75 million per occurrence and annual aggregate exposure
    (which includes amounts paid for property damage and business
    interruption loss), plus $1 million per occurrence
    deductible                                                                                                                                                                                                                                                                                                                 |  | $325 million in the aggregate per year(c)
|Acts of terrorism(d)                         |  | $4.9 million per occurrence deductible (plus 10% of the
    remainder of each and every loss with a maximum per occurrence
    exposure of $37.4 million which includes the
    $4.9 million deductible); however, TRIEA provides that if
    the aggregate industry loss as a result of any such foreign
    terrorism occurrence is less than $50 million
    ($100 million in 2007), we are responsible for 100% of such
    loss. Our intent is to insure such amounts in excess of
    $50 million in 2007. |  | $825 million per occurrence(e)           






|    |  |                                                                                                                                                                                                                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We retain up to $75 million annual aggregate loss
    throughout the portfolio. In the event of a loss in excess of
    the per occurrence or annual aggregate amount, the third-party
    insurance carriers would be obligated to cover the losses up to
    the stated coverage amounts in the table above.      
|   
|(b) |  | The amount of the third party insurance relating to earthquakes
    is based on maximum probable loss studies performed by
    independent third parties. The maximum annual aggregate payment
    amount for earthquake loss is $325 million, inclusive of
    our loss exposure of $75 million plus $1 million per

128



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




| |                                                          
| | ---------------------------------------------------------
| | NOTE 24  COMMITMENTS AND
    CONTINGENCIES  (continued)





|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | These amounts include our loss exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(d) |  | This coverage includes nuclear, chemical and biological events
    under the Terrorism Risk Insurance Act of 2002
    (TRIA). This coverage does not apply to non-TRIA
    events (which are terrorism events that are not committed by a
    foreigner or a foreign country). We maintain separate insurance
    with a $325 million annual aggregate limit subject to a
    deductible of $1 million for non-TRIA events. This separate
    coverage for non-TRIA events excludes nuclear, biological and
    chemical events.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | TRIA established the Terrorism Risk Insurance Program
    (TRIP) to mandate that insurance carriers offer
    insurance covering physical damage from terrorist incidents
    certified by the U.S. government as foreign terrorist acts.
    Under TRIP, the federal government shares in the risk of loss
    associated with certain future terrorist acts. TRIA was extended
    for two years under the Terrorism Risk Insurance Extension Act
    (TRIEA), which established new requirements and
    expires on December 31, 2007. TRIEA created a new program
    trigger for any certified act of terrorism occurring after
    March 31, 2006 that prohibits payment of federal
    compensation unless the aggregate industry insured losses
    resulting from that act of terrorism exceed $50 million for
    2006 and $100 million for 2007. The trigger for federal
    reimbursement through March 31, 2006 is $5 million,
    rather than $50 million.



|    |  |                                                    
|--- |  | ---------------------------------------------------
|(e) |  | This amount is in excess of our deductible amounts.

Pollution:


Workers Compensation, Automobile Liability and General
Liability:


NOTE 25  SUBSEQUENT EVENTS






| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | We repurchased 13.0 million Common Shares under our open
    market repurchase program at an average purchase price of
    $31.49 per share for $408.6 million. EOP Partnership
    also redeemed 2.3 million Units at an average purchase
    price of $30.48 per Unit for $69.0 million.                                                                                                                                                                                                                                    
|
| | 2. | In January 2006, we exercised our option to draw an additional
    $250 million on our $750 million term loan, which
    increased the amount outstanding under the facility to
    $1.0 billion. As of March 8, 2006, we also had
    $478 million outstanding under our $1.25 billion
    revolving credit facility.                                                                                                                                                                                                        
|
| | 3. | On February 28, 2006, we obtained a $500 million unsecured
    term loan facility, which we fully drew upon on March 8,
    2006. The loan matures in February 2007 and bears interest at
    the higher of the Prime Rate or the federal funds rate plus
    50 basis points; plus a spread of 55 basis points (the
    spread is subject to change based on EOP Partnerships
    credit rating). The proceeds from this loan will primarily be
    used to repay unsecured notes scheduled to mature on
    March 15, 2006.

129



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 25  SUBSEQUENT
EVENTS  (continued)




| |    |                                      
| | -- | -------------------------------------
| | 4. | We acquired the following properties:

|                           |  |               |  |             |           |  |           |                            |   |                        |  |  |                |  |  |   |        | 
|-------------------------- |  | ------------- |  | ----------- | --------- |  | --------- | -------------------------- | - | ---------------------- |  |  | -------------- |  |  | - | ------ | 
|                           |  |               |  |             |           |  |           | Effective Office Portfolio |  
|                           |  |               |  |             |           |  |           |                            |  
|                           |  |               |  | Acquisition |           |  | Number of |                            |   | Square                 |  |  |               
|Property                   |  | Location      |  | Date        |           |  | Buildings |                            |   | Feet                   |  |  | Purchase Price | 
|                           |  |               |  |             |           |  |           |                            |   |                        |  |  |                | 
|                           |  |               |  |             |           |  |           |                            |   | (Dollars in thousands) | 
|One and Three Harbor Drive |  | Sausalito, CA |  |             | 1/19/2006 |  |           |                            | 2 |                        |  |  | 111,772        |  |  | $ | 32,500 | 
|Pointe OHare(a)           |  | Rosemont, IL  |  |             | 3/8/2006  |  |           |                            | 1 |                        |  |  | 262,991        |  |  |   | 55,675 | 
|                           |  |               |  |             |           |  |           |                            |   |                        |  |  |                | 
|                           |  |               |  |             | Total     |  |           |                            | 3 |                        |  |  | 374,763        |  |  | $ | 88,175 | 
|                           |  |               |  |             |           |  |           |                            |   |                        |  |  |                | 






| |     |                                                                                                                                                                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | In addition to our acquisition of a wholly owned interest in
    this office property, we also contributed $2.0 million to a
    new joint venture formed with the seller of Pointe OHare,
    who contributed a vacant land parcel and a parking structure
    adjacent to the building.



| |    |                                                                           
| | -- | --------------------------------------------------------------------------
| | 5. | We disposed of whole or partial interests in the following
    properties:

|                                      |  |                   |  |             |           |  |           |                            |    |                        |  |  |             |  |  |   |         | 
|------------------------------------- |  | ----------------- |  | ----------- | --------- |  | --------- | -------------------------- | -- | ---------------------- |  |  | ----------- |  |  | - | ------- | 
|                                      |  |                   |  |             |           |  |           | Effective Office Portfolio |   
|                                      |  |                   |  |             |           |  |           |                            |   
|                                      |  |                   |  | Disposition |           |  | Number of |                            |    | Square                 |  |  |            
|Property                              |  | Location          |  | Date        |           |  | Buildings |                            |    | Feet                   |  |  | Sales Price | 
|                                      |  |                   |  |             |           |  |           |                            |    |                        |  |  |             | 
|                                      |  |                   |  |             |           |  |           |                            |    | (Dollars in thousands) | 
|120 Montgomery(a)                     |  | San Francisco, CA |  |             | 1/20/2006 |  |           |                            | 1  |                        |  |  | 430,523     |  |  | $ | 67,500  | 
|Westridge and Pacific Corporate Plaza |  | San Diego, CA     |  |             | 2/8/2006  |  |           |                            | 3  |                        |  |  | 158,173     |  |  |   | 30,500  | 
|8-16 Perimeter(a)                     |  | Atlanta, GA       |  |             | 2/17/2006 |  |           |                            | 5  |                        |  |  | 65,350      |  |  |   | 10,712  | 
|One Crosswoods                        |  | Columbus, OH      |  |             | 3/3/2006  |  |           |                            | 1  |                        |  |  | 129,583     |  |  |   | 5,300   | 
|                                      |  |                   |  |             |           |  |           |                            |    |                        |  |  |             | 
|                                      |  |                   |  |             | Total     |  |           |                            | 10 |                        |  |  | 783,629     |  |  | $ | 114,012 | 
|                                      |  |                   |  |             |           |  |           |                            |    |                        |  |  |             | 






| |     |                                                                            
| | --- | ---------------------------------------------------------------------------
| | (a) | These properties were classified as held for sale at
    December 31, 2005.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | During February 2006, the ownership structure of the Sixty State
    Street property was restructured. Pursuant to this restructure,
    we converted our former debt position in this property into an
    approximate 95% equity interest. In addition, new mortgage
    financing was obtained on the property. The new mortgage loan
    has a principal balance of $180.0 million, bears interest
    at a fixed coupon rate of 5.629% and matures on March 1,
    2011. Following this restructure, we will continue to
    consolidate the financial position and results of operations of
    this property because we continue to control the property.
|
| | 7. | We collected the $66.3 million note receivable related to
    the One Phoenix property that was sold in 2005 and recognized
    the $25.6 million gain on sale that had previously been
    deferred.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | 8. | Paces West, an office property comprising two buildings and
    646,471 square feet located in Atlanta, GA, was classified
    as held for sale. The investment in real estate, net of
    accumulated depreciation for this property is
    $73.5 million. This disposition is subject to certain
    contingencies and is expected to close in the second quarter
    of 2006.                                                                                                                                                                                                                                                                                

130



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements With Accountants on Accounting
    and Financial Disclosure.








|         |                         
|-------- | ------------------------
|Item 9A. | Controls and Procedures.

Evaluation of Disclosure Controls and Procedures


13a-15(e) 15d-15(e)


Managements Report on Internal Control over Financial
Reporting


13a-15(f) 15d-15(f).




Changes in Internal Control over Financial Reporting









Item 9B.     Other
Information.




131



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##### Table of Contents






PART III







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












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








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








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








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



132



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##### Table of Contents






PART IV







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







| |                                                             
| | ------------------------------------------------------------
| | Consolidated Balance Sheets as of December 31, 2005 and 2004



| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | Consolidated Statements of Operations for the years ended
    December 31, 2005, 2004 and 2003                     
|
| | Consolidated Statements of Changes in Shareholders Equity
    for the years ended December 31, 2005, 2004 and 2003
|
| | Consolidated Statements of Net Comprehensive Income for the
    years ended December 31, 2005, 2004 and 2003       
|
| | Consolidated Statements of Cash Flows for the years ended
    December 31, 2005, 2004 and 2003                     













| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | The exhibits required by this item are set forth on the
    Exhibit Index attached hereto.





| |                         
| | ------------------------
| | See Item 15(a)(3) above.





| |                                                                                     
| | ------------------------------------------------------------------------------------
| | Schedule III  Real Estate and Accumulated
    Depreciation as of December 31, 2005.

133



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##### Table of Contents



SIGNATURES






| |                                   
| | ----------------------------------
| | Equity Office Properties
    Trust



| |     |                       
| | --- | ----------------------
| | By: | /s/ Richard D. Kincaid

| |                                      
| | -------------------------------------
| |                                      
| | Richard D. Kincaid                   
| | President and Chief Executive Officer
|
| | Date: March 14, 2006                 



| |                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to the requirements of the Securities Exchange Act of
    1934, this report has been signed below by the following persons
    on behalf of the registrant in the capacities indicated as of
    March 14, 2006.

|                                                   |  |                                                                                        |  | 
|-------------------------------------------------- |  | -------------------------------------------------------------------------------------- |  | 
|Signature                                          |  | Title                                                                                 
|                                                   |  |                                                                                       
|                                                  
|/s/ Richard D. KincaidRichard D. Kincaid           |  | President, Chief Executive Officer and Trustee
    (principal executive officer)      
|                                                  
|/s/ Marsha C. WilliamsMarsha C. Williams           |  | Executive Vice President and Chief Financial Officer (principal
    financial officer)
|                                                  
|/s/ Virginia L.
    SeggermanVirginia L. Seggerman |  | Senior Vice President and Chief Accounting Officer (principal
    accounting officer) 
|                                                  
|/s/ Samuel ZellSamuel Zell                         |  | Chairman of the Board of Trustees                                                     
|                                                  
|/s/ Marilyn A.
    AlexanderMarilyn A. Alexander   |  | Trustee                                                                               
|                                                  
|/s/ Thomas E. DobrowskiThomas E. Dobrowski         |  | Trustee                                                                               
|                                                  
|/s/ William M. GoodyearWilliam M. Goodyear         |  | Trustee                                                                               
|                                                  
|/s/ James D.
    Harper, Jr.James D. Harper, Jr.   |  | Trustee                                                                               
|                                                  
|/s/ David K. McKownDavid K. McKown                 |  | Trustee                                                                               
|                                                  
|/s/ Sheli Z. RosenbergSheli Z. Rosenberg           |  | Trustee                                                                               

134



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|                                                         |  |         |  | 
|-------------------------------------------------------- |  | ------- |  | 
|Signature                                                |  | Title  
|                                                         |  |        
|                                                        
|/s/ Stephen I. SadoveStephen I. Sadove                   |  | Trustee
|                                                        
|/s/ Sally SusmanSally Susman                             |  | Trustee
|                                                        
|/s/ Jan H.W.R. van der
    VlistJan H.W.R. van der Vlist |  | Trustee

135



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EXHIBIT INDEX


|            |      |  |             |                                                                                                                                                                                                                                                                                                                |          |                                                                                                             
|----------- | ---- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                                                                                                                                | Location
|            |      |  |             |                                                                                                                                                                                                                                                                                                                |         
|            | 3.1  |  |             | Restated Declaration of Trust                                                                                                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 3.2 to Equity
    Offices 2003 Third Quarter Form 10-Q                
|           
|            | 3.2  |  |             | Third Amended and Restated Bylaws                                                                                                                                                                                                                                                                              |          | Incorporated by reference to Exhibit 3.1 to Equity
    Offices 2003 First Quarter Form 10-Q                
|           
|            | 4.1  |  |             | Indenture, dated as of September 2, 1997, between EOP
    Partnership and State Street Bank and Trust Company                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 4.1 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended 
|           
|            | 4.2  |  |             | First Supplemental Indenture, dated as of February 9, 1998,
    between EOP Partnership and State Street Bank and Trust Company                                                                                                                                                                                |          | Incorporated by reference to Exhibit 4.2 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended 
|           
|            | 4.3  |  |             | $200,000,000 6.625% Note due 2005. Another $200,000,000
    6.625% Note due 2005, identical in all material respects to
    the Note filed as Exhibit 4.4 to Equity Offices 1997
    Annual Report on Form 10-K, as amended, has not been filed.                                                              |          | Incorporated by reference to Exhibit 4.4 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended 
|           
|            | 4.4  |  |             | $200,000,000 6.750% Note due 2008. A $100,000,000
    6.750% Note due 2008, identical in all material respects
    other than principal amount to the Note filed as
    Exhibit 4.5 to Equity Offices 1997 Annual Report on
    Form 10-K, as amended, has not been filed.                                    |          | Incorporated by reference to Exhibit 4.5 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended 
|           
|            | 4.5  |  |             | $200,000,000 7.250% Note due 2018. A $50,000,000
    7.250% Note due 2018, identical in all material respects
    other than principal amount to the Note filed as
    Exhibit 4.6 to Equity Offices Annual Report on
    Form 10-K for the year ended December 31, 1997, as
    amended, has not been filed. |          | Incorporated by reference to Exhibit 4.6 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended 
|           
|            | 4.6  |  |             | $50,000,000 7.36% Senior Note due 2005                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 4.9 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended 
|           
|            | 4.7  |  |             | $50,000,000 7.44% Senior Note due 2006                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 4.10 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended
|           
|            | 4.8  |  |             | $50,000,000 7.41% Senior Note due 2007                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 4.11 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended
|           
|            | 4.9  |  |             | $300,000,000 6.763% Notes due 2007                                                                                                                                                                                                                                                                             |          | Incorporated by reference to Exhibit 4.13 to Equity
    Offices 2000 Annual Report on Form 10-K, as amended
|           
|            | 4.10 |  |             | $225,000,000 7.25% Notes due 2028                                                                                                                                                                                                                                                                              |          | Incorporated by reference to Exhibit 4.14 to Equity
    Offices 2000 Annual Report on Form 10-K, as amended

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|            |      |  |             |                                                                                                                                                                                                 |          |                                                                                                                                              
|----------- | ---- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                 | Location
|            |      |  |             |                                                                                                                                                                                                 |         
|           
|            | 4.11 |  |             | $500,000,000 6.8% Notes due 2009                                                                                                                                                                |          | Incorporated by reference to Exhibit 4.17 to Equity
    Offices 2000 Annual Report on Form 10-K, as amended                                 
|           
|            | 4.12 |  |             | $200,000,000 7.5% Notes due April 19, 2029                                                                                                                                                      |          | Incorporated by reference to Exhibit 4.23 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on April 19, 1999       
|           
|            | 4.13 |  |             | $400,000,000 8.375% Note due March 15, 2006                                                                                                                                                     |          | Incorporated by reference to Exhibit 4.24 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on March 24, 2000       
|           
|            | 4.14 |  |             | $100,000,000 8.375% Note due March 15, 2006                                                                                                                                                     |          | Incorporated by reference to Exhibit 4.25 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on March 24, 2000       
|           
|            | 4.15 |  |             | $360,000,000 8.10% Note due August 1, 2010 of EOP
    Partnership                                                                                                                               |          | Incorporated by reference to Exhibit 4.1 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on August 8, 2000        
|           
|            | 4.16 |  |             | Indenture, dated August 29, 2000, by and between EOP
    Partnership and U.S. Bank National Association (formerly
    known as U.S. Bank Trust National Association)                            |          | Incorporated by reference to Exhibit 4.1 to EOP
    Partnerships Registration Statement on Form S-3, as
    amended (SEC File No. 333-43530)
|           
|            | 4.17 |  |             | First Supplemental Indenture, dated June 18, 2001, among
    EOP Partnership, Equity Office and U.S. Bank National
    Association (formerly known as U.S. Bank Trust National
    Association) |          | Incorporated by reference to Exhibit 4.2 to Equity
    Offices Registration Statement on Form S-3, as
    amended (SEC File No. 333-58976)  
|           
|            | 4.18 |  |             | $400,000,000
    73/4% Note
    due 2007                                                                                                                                                        |          | Incorporated by reference to Exhibit 4.5 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on November 20, 2000     
|           
|            | 4.19 |  |             | $200,000,000
    73/4% Note
    due 2007                                                                                                                                                        |          | Incorporated by reference to Exhibit 4.6 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on November 20, 2000     
|           
|            | 4.20 |  |             | $500,000,000 7.000% Note due July 15, 2011, and
    related Guarantee                                                                                                                           |          | Incorporated by reference to Exhibit 4.4 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on July 18, 2001         

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|            |      |  |             |                                                                                                                                                       |          |                                                                                                                                         
|----------- | ---- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                       | Location
|            |      |  |             |                                                                                                                                                       |         
|           
|            | 4.21 |  |             | $500,000,000 7.000% Note due July 15, 2011, and
    related Guarantee                                                                                 |          | Incorporated by reference to Exhibit 4.5 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on July 18, 2001    
|           
|            | 4.22 |  |             | $100,000,000 7.000% Note due July 15, 2011, and
    related Guarantee                                                                                 |          | Incorporated by reference to Exhibit 4.6 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on July 18, 2001    
|           
|            | 4.23 |  |             | $300,000,000 7.875% Note due July 15, 2031, and
    related Guarantee                                                                                 |          | Incorporated by reference to Exhibit 4.7 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on July 18, 2001    
|           
|            | 4.24 |  |             | $400,000,000
    63/4% Note
    due February 15, 2012, and related Guarantee                                                                          |          | Incorporated by reference to Exhibit 4.1 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on February 15, 2002
|           
|            | 4.25 |  |             | $100,000,000
    63/4% Note
    due February 15, 2012, and related Guarantee                                                                          |          | Incorporated by reference to Exhibit 4.2 to EOP
    Partnerships Current Report on Form 8-K filed with
    the SEC on February 15, 2002
|           
|            | 4.26 |  |             | Indenture, dated as of December 6, 1995, among Spieker and
    State Street Bank and Trust, as Trustee                                                |          | Incorporated by reference to Exhibit 99.17.1 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001   
|           
|            | 4.27 |  |             | Sixth Supplemental Indenture, dated as of December 10,
    1996, among Spieker, Spieker Partnership and State Street Bank
    and Trust, as Trustee   |          | Incorporated by reference to Exhibit 99.17.12 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001  
|           
|            | 4.28 |  |             | $100,000,000 7.125% Note due December 1, 2006                                                                                                         |          | Incorporated by reference to Exhibit 99.17.13 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001  
|           
|            | 4.29 |  |             | Seventh Supplemental Indenture, dated as of December 10,
    1996, among Spieker, Spieker Partnership and State Street Bank
    and Trust, as Trustee |          | Incorporated by reference to Exhibit 99.17.14 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001  
|           
|            | 4.30 |  |             | $25,000,000 7.875% Note due December 1, 2016                                                                                                          |          | Incorporated by reference to Exhibit 99.17.15 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001  
|           
|            | 4.31 |  |             | Eighth Supplemental Indenture, dated as of July 14, 1997,
    among Spieker, Spieker Partnership and State Street Bank and
    Trust, as Trustee      |          | Incorporated by reference to Exhibit 99.17.16 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001  
|           
|            | 4.32 |  |             | $150,000,000 7.125% Note due July 1, 2009                                                                                                             |          | Incorporated by reference to Exhibit 99.17.17 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001  

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|            |      |  |             |                                                                                                                                                                                                                                        |          |                                                                                                                                       
|----------- | ---- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                                                        | Location
|            |      |  |             |                                                                                                                                                                                                                                        |         
|           
|            | 4.33 |  |             | Ninth Supplemental Indenture, dated as of September 29,
    1997, among Spieker, Spieker Partnership, First Trust of
    California, National Association, as Trustee, and State Street
    Bank and Trust                             |          | Incorporated by reference to Exhibit 99.17.18 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.34 |  |             | $150,000,000 7.50% Debenture due October 1, 2027                                                                                                                                                                                       |          | Incorporated by reference to Exhibit 99.17.19 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.35 |  |             | Tenth Supplemental Indenture, dated as of December 8, 1997,
    among Spieker, Spieker Partnership and First Trust of
    California, National Association, as Trustee, and State Street
    Bank and Trust                            |          | Incorporated by reference to Exhibit 99.17.20 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.36 |  |             | $200,000,000 7.35% Debenture due December 1, 2017                                                                                                                                                                                      |          | Incorporated by reference to Exhibit 99.17.21 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.37 |  |             | Eleventh Supplemental Indenture, dated as of January 27,
    1998, among Spieker, Spieker Partnership and First Trust of
    California, National Association, as Trustee                                                              |          | Incorporated by reference to Exhibit 99.17.22 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.38 |  |             | $150,000,000 6.75% Note due January 15, 2008                                                                                                                                                                                           |          | Incorporated by reference to Exhibit 99.17.23 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.39 |  |             | Twelfth Supplemental Indenture, dated as of February 2,
    1998, among Spieker, Spieker Partnership and First Trust of
    California, National Association, as Trustee                                                               |          | Incorporated by reference to Exhibit 99.17.24 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.40 |  |             | $125,000,000 6.875% Note due February 1, 2005                                                                                                                                                                                          |          | Incorporated by reference to Exhibit 99.17.25 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.41 |  |             | Thirteenth Supplemental Indenture, dated as of February 2,
    1998, among Spieker, Spieker Partnership and First Trust of
    California, National Association, as Trustee                                                            |          | Incorporated by reference to Exhibit 99.17.26 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.42 |  |             | $1,500,000 7.0% Note due February 1, 2007                                                                                                                                                                                              |          | Incorporated by reference to Exhibit 99.17.27 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001
|           
|            | 4.43 |  |             | Fourteenth Supplemental Indenture, dated as of April 29,
    1998, among Spieker, Spieker Partnership and U.S. Bank
    Trust National Association (formerly known as First Trust of
    California, National Association), as Trustee |          | Incorporated by reference to Exhibit 99.17.28 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001

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|            |      |  |             |                                                                                                                                                                                                                                                                                                                                                    |          |                                                                                                                                             
|----------- | ---- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | --------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                                                                                                                                                                    | Location
|            |      |  |             |                                                                                                                                                                                                                                                                                                                                                    |         
|           
|            | 4.44 |  |             | $25,000,000 6.88% Note due April 30, 2007                                                                                                                                                                                                                                                                                                          |          | Incorporated by reference to Exhibit 99.17.29 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 4.45 |  |             | Fifteenth Supplemental Indenture, dated as of May 11, 1999,
    among Spieker, Spieker Partnership and U.S. Bank Trust
    National Association, as Trustee                                                                                                                                                                                        |          | Incorporated by reference to Exhibit 99.17.30 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 4.46 |  |             | $200,000,000 7.25% Note due May 1, 2009                                                                                                                                                                                                                                                                                                            |          | Incorporated by reference to Exhibit 99.17.32 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 4.47 |  |             | Sixteenth Supplemental Indenture, dated as of December 11,
    2000, among Spieker, Spieker Partnership and U.S. Bank
    Trust National Association, as Trustee                                                                                                                                                                                   |          | Incorporated by reference to Exhibit 99.17.33 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 4.48 |  |             | $200,000,000 7.65% Note due December 15, 2010                                                                                                                                                                                                                                                                                                      |          | Incorporated by reference to Exhibit 99.17.34 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 4.49 |  |             | Seventeenth Supplemental Indenture, dated as of July 2,
    2001, relating to the substitution of Equity Office and EOP
    Partnership as successor entities for Spieker and Spieker
    Partnership, respectively                                                                                                                                |          | Incorporated by reference to Exhibit 99.17.35 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 4.50 |  |             | $400,000,000 5.875% Note due January 15, 2013, and
    related Guarantee                                                                                                                                                                                                                                                                           |          | Incorporated by reference to Exhibit 4.1 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    January 15, 2003
|           
|            | 4.51 |  |             | $100,000,000 5.875% Note due January 15, 2013, and
    related Guarantee                                                                                                                                                                                                                                                                           |          | Incorporated by reference to Exhibit 4.2 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    January 15, 2003
|           
|            | 4.52 |  |             | $500,000,000 4.75% Note due March 15, 2014 and related
    Guarantee (another $500,000,000 4.75% Note due
    March 15, 2014 and related Guarantee, identical in all
    material respects to the Note filed as Exhibit 4.3 to the
    Current Report on Form 8-K of EOP Partnership filed with
    the SEC on March 26, 2004, has not been filed) |          | Incorporated by reference to Exhibit 4.3 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    March 26, 2004  
|           
|            | 4.53 |  |             | $45,000,000 Floating Rate Note due May 27, 2014 and related
    Guarantee                                                                                                                                                                                                                                                                          |          | Incorporated by reference to Exhibit 4.3 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    May 26, 2004    

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|            |      |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                   |          |                                                                                                                                            
|----------- | ---- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                                                                                                                                                                                                                                   | Location
|            |      |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                   |         
|           
|            | 4.54 |  |             | $500,000,000 4.65% Fixed Rate Note due October 1, 2010 and
    related Guarantee (another $300,000,000 4.65% Fixed Rate Note
    due October 1, 2010 and related Guarantee, identical in all
    material respects, other than the principal amount, to the Note
    filed as Exhibit 4.3 to the Current Report on Form 8-K
    of EOP Partnership filed with the SEC on October 7, 2004,
    has not been filed) |          | Incorporated by reference to Exhibit 4.3 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    October 7, 2004
|           
|            | 4.55 |  |             | $200,000,000 Floating Rate Note due October 1, 2010 and
    related Guarantee                                                                                                                                                                                                                                                                                                                                     |          | Incorporated by reference to Exhibit 4.4 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    October 7, 2004
|           
|            | 4.56 |  |             | Form of Medium-Term InterNote (Fixed Rate) and related Guarantee                                                                                                                                                                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 4.3 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    June 15, 2004  
|           
|            | 4.57 |  |             | Form of Medium-Term InterNote (Floating Rate) and related
    Guarantee                                                                                                                                                                                                                                                                                                                                           |          | Incorporated by reference to Exhibit 4.4 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    June 15, 2004  
|           
|            | 4.58 |  |             | New Trustee Appointment Agreement, dated June 10, 2004,
    among EOP Partnership, Equity Office and BNY Midwest Trust
    Company                                                                                                                                                                                                                                                                                |          | Incorporated by reference to Exhibit 4.5 to the Current
    Report on Form 8-K of EOP Partnership filed with the SEC on
    June 15, 2004  
|           
|            | 4.59 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued as of
    June 30, 2004                                                                                                                                                                                                                                                                                                                                    |          | Incorporated by reference to Exhibit 4.5 to EOP
    Partnerships 2004 Second Quarter Form 10-Q                                            
|           
|            | 4.60 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued from
    July 1, 2004 to September 30, 2004                                                                                                                                                                                                                                                                                                                |          | Incorporated by reference to Exhibit 4.6 to EOP
    Partnerships 2004 Third Quarter Form 10-Q                                             
|           
|            | 4.61 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued from
    October 1, 2004 to December 31, 2004                                                                                                                                                                                                                                                                                                              |          | Incorporated by reference to Exhibit 4.73 to EOP
    Partnerships 2004 Annual Report on Form 10-K                                         
|           
|            | 4.62 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued from
    January 1, 2005 to March 31, 2005                                                                                                                                                                                                                                                                                                                 |          | Incorporated by reference to Exhibit 4.5 to EOP
    Partnerships 2005 First Quarter Form 10-Q                                             
|           
|            | 4.63 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued from
    April 1, 2005 to June 30, 2005                                                                                                                                                                                                                                                                                                                    |          | Incorporated by reference to Exhibit 4.5 to EOP
    Partnerships 2005 Second Quarter Form 10-Q                                            
|           
|            | 4.64 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued from
    July 1, 2005 to September 30, 2005                                                                                                                                                                                                                                                                                                                |          | Incorporated by reference to Exhibit 4.5 to EOP
    Partnerships 2005 Third Quarter Form 10-Q                                             
|           
|            | 4.65 |  |             | Schedule of Medium-Term InterNotes (Fixed Rate) issued from
    October 1, 2005 to December 31, 2005                                                                                                                                                                                                                                                                                                              |          | Incorporated by reference to Exhibit 4.65 to EOP
    Partnerships 2005 Annual Report on Form 10-K                                         

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|            |        |  |             |                                                                                                                                                                                                                                                           |          |                                                                                                                                         
|----------- | ------ |  | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |        |  | Description |                                                                                                                                                                                                                                                           | Location
|            |        |  |             |                                                                                                                                                                                                                                                           |         
|           
|            | 10.1   |  |             | Third Amended and Restated Agreement of Limited Partnership of
    EOP Partnership                                                                                                                                                                        |          | Incorporated by reference to Exhibit 99.8 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on July 5, 2001      
|           
|            | 10.2   |  |             | First Amendment to Third Amended and Restated Agreement of
    Limited Partnership of EOP Partnership                                                                                                                                                     |          | Incorporated by reference to Exhibit 4.1 to EOP
    Partnerships 2002 Third Quarter Form 10-Q                                          
|           
|            | 10.3   |  |             | Second Amendment to the Third Amended and Restated Agreement of
    Limited Partnership of EOP Partnership                                                                                                                                                |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices 2003 Second Quarter Form 10-Q                                          
|           
|            | 10.4   |  |             | Third Amendment to the Third Amended and Restated Agreement of
    Limited Partnership of EOP Partnership                                                                                                                                                 |          | Incorporated by reference to Exhibit 10.4 to Equity
    Offices 2003 Annual Report on Form 10-K                                        
|           
|            | 10.5   |  |             | Fourth Amendment to the Third Amended and Restated Agreement of
    Limited Partnership of EOP Partnership                                                                                                                                                |          | Incorporated by reference to Exhibit 3.1 to EOP
    Partnerships 2004 Second Quarter Form 10-Q                                         
|           
|            | 10.6   |  |             | Fifth Amendment to the Third Amended and Restated Agreement of
    Limited Partnership of EOP Partnership                                                                                                                                                 |          | Incorporated by reference to Exhibit 3.1 to EOP
    Partnerships 2005 Second Quarter Form 10-Q                                         
|           
|            | 10.7   |  |             | Registration Rights Agreement, dated as of July 11, 1997                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended                            
|           
|            | 10.8   |  |             | Noncompetition Agreement between Equity Office and Samuel Zell                                                                                                                                                                                            |          | Incorporated by reference to Exhibit 10.3 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended                            
|           
|            | 10.9  |  |             | First Amended and Restated 1997 Share Option and Share
    Award Plan                                                                                                                                                                                     |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices 2003 Second Quarter Form 10-Q                                          
|           
|            | 10.10 |  |             | First Amendment to First Amended and Restated 1997 Share
    Option and Share Award Plan                                                                                                                                                                  |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices 2003 Third Quarter Form 10-Q                                           
|           
|            | 10.11 |  |             | Second Amendment to First Amended and Restated 1997 Share
    Option and Share Award Plan                                                                                                                                                                 |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices 2004 Second Quarter Form 10-Q                                          
|           
|            | 10.12 |  |             | Form of Share Appreciation Rights Agreement between Equity
    Office and Jan H. W. R. van der Vlist                                                                                                                                                      |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices 2002 First Quarter Form 10-Q                                           
|           
|            | 10.13 |  |             | Share Appreciation Rights Agreement dated September 20,
    2004 between Equity Office and Jan H. W. R. van der Vlist (for
    SARs expiring June 15, 2013)                                                                                               |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on September 23, 2004
|           
|            | 10.14 |  |             | First Amendment dated May 31, 2005 to Equity Office
    Properties Trust Share Appreciation Rights Agreement dated
    September 20, 2004 between Equity Office Properties Trust
    and Jan H. W. R. van der Vlist (for SARs expiring June 15,
    2013) |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices 2005 Second Quarter Form 10-Q                                          

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|            |        |  |             |                                                                                                                                                                                                                                                             |          |                                                                                                                                         
|----------- | ------ |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |        |  | Description |                                                                                                                                                                                                                                                             | Location
|            |        |  |             |                                                                                                                                                                                                                                                             |         
|           
|            | 10.15 |  |             | Second Amendment dated June 29, 2005 to Equity Office
    Properties Trust Share Appreciation Rights Agreement dated
    September 20, 2004 between Equity Office Properties Trust
    and Jan H. W. R. van der Vlist (for SARs expiring June 15,
    2013) |          | Incorporated by reference to Exhibit 10.4 to Equity
    Offices 2005 Second Quarter Form 10-Q                                          
|           
|            | 10.16 |  |             | Share Appreciation Rights Agreement dated September 20,
    2004 between Equity Office and Jan H. W. R. van der Vlist (for
    SARs expiring June 15, 2014)                                                                                                 |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on September 23, 2004
|           
|            | 10.17 |  |             | First Amendment dated May 31, 2005 to Equity Office
    Properties Trust Share Appreciation Rights Agreement dated
    September 20, 2004 between Equity Office Properties Trust
    and Jan H. W. R. van der Vlist (for SARs expiring June 15,
    2014)   |          | Incorporated by reference to Exhibit 10.3 to Equity
    Offices 2005 Second Quarter Form 10-Q                                          
|           
|            | 10.18 |  |             | Second Amendment dated June 29, 2005 to Equity Office
    Properties Trust Share Appreciation Rights Agreement dated
    September 20, 2004 between Equity Office Properties Trust
    and Jan H. W. R. van der Vlist (for SARs expiring June 15,
    2014) |          | Incorporated by reference to Exhibit 10.5 to Equity
    Offices 2005 Second Quarter Form 10-Q                                          
|           
|            | 10.19 |  |             | 2003 Share Option and Share Incentive Plan                                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 10.3 to Equity
    Offices 2003 Second Quarter Form 10-Q                                          
|           
|            | 10.20 |  |             | First Amendment to 2003 Share Option and Share Incentive
    Plan                                                                                                                                                                                           |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices 2003 Third Quarter Form 10-Q                                           
|           
|            | 10.21 |  |             | Second Amendment to 2003 Share Option and Share Incentive
    Plan                                                                                                                                                                                          |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on December 21, 2005 
|           
|            | 10.22 |  |             | Third Amended and Restated Supplemental Retirement Savings Plan,
    as amended and restated effective October 5, 2004                                                                                                                                      |          | Incorporated by reference to Exhibit 10.19 to Equity
    Offices 2004 Annual Report on Form 10-K                                       
|           
|            | 10.23 |  |             | Second Amended and Restated 1997 Non- Qualified Employee Share
    Purchase Plan, effective as of October 5, 2004                                                                                                                                           |          | Incorporated by reference to Exhibit 10.20 to Equity
    Offices 2004 Annual Report on Form 10-K                                       
|           
|            | 10.24 |  |             | First Amendment to the Second Amended and Restated 1997
    Non-Qualified Employee Share Purchase Plan, effective as of
    December 7, 2004                                                                                                                |          | Incorporated by reference to Exhibit 10.21 to Equity
    Offices 2004 Annual Report on Form 10-K                                       
|           
|            | 10.25 |  |             | Change in Control Agreement by and between Equity Office
    Management L.L.C., Equity Office and Richard D. Kincaid                                                                                                                                        |          | Incorporated by reference to Exhibit 10.7 to Equity
    Offices 2003 Third Quarter Form 10-Q                                           
|           
|            | 10.26 |  |             | Change in Control Agreement by and between Equity Office
    Properties Management Corp., Equity Office and Stanley M. Stevens                                                                                                                              |          | Incorporated herein by reference to Exhibit 10.8 to Equity
    Offices 2001 Third Quarter Form 10-Q                                    

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|            |        |  |             |                                                                                                                                                                                                        |          |                                                                                                                                        
|----------- | ------ |  | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------- | ---------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |        |  | Description |                                                                                                                                                                                                        | Location
|            |        |  |             |                                                                                                                                                                                                        |         
|           
|            | 10.27 |  |             | Assumption and Amendment to Change in Control Agreement by and
    between Equity Office Properties Management Corp., Equity
    Office, EOP Partnership and Stanley M. Stevens                        |          | Incorporated by reference to Exhibit 10.4 to Equity
    Offices 2002 Third Quarter Form 10-Q                                          
|           
|            | 10.28 |  |             | Second Assumption and Amendment to Change in Control Agreement
    by and between Equity Office Management L.L.C., Equity Office,
    EOP Partnership and Stanley M. Stevens                           |          | Incorporated by reference to Exhibit 10.26 to Equity
    Offices 2003 Annual Report on Form 10-K                                      
|           
|            | 10.29 |  |             | Change in Control Agreement by and between EOP Partnership,
    Equity Office and Marsha C. Williams                                                                                                   |          | Incorporated herein by reference to Exhibit 10.1 to Equity
    Offices 2004 First Quarter Form 10-Q                                   
|           
|            | 10.30 |  |             | Assumption to Change in Control Agreement by and between Equity
    Office Management L.L.C., Equity Office, Equity Office
    Properties Management Corp., EOP Partnership and Marsha C.
    Williams |          | Incorporated herein by reference to Exhibit 10.2 to Equity
    Offices 2004 First Quarter Form 10-Q                                   
|           
|            | 10.31 |  |             | Change in Control Agreement by and between Equity Office
    Management L.L.C., Equity Office and Jeffrey L. Johnson                                                                                   |          | Incorporated herein by reference to Exhibit 10.3 to Equity
    Offices 2004 First Quarter Form 10-Q                                   
|           
|            | 10.32 |  |             | Change in Control Agreement by and between Equity Office
    Management L.L.C., Equity Office and Peyton H. Owen                                                                                       |          | Incorporated herein by reference to Exhibit 10.2 to Equity
    Offices 2005 First Quarter Form 10-Q                                   
|           
|            | 10.33 |  |             | Trustee Compensation Agreement between Sam Zell and Equity
    Office, as amended                                                                                                                      |          | Incorporated by reference to Exhibit 10.28 to Equity
    Offices 2003 Annual Report on Form 10-K                                      
|           
|            | 10.34 |  |             | First Amendment to Trustee Compensation Agreement between Sam
    Zell and Equity Office, as amended                                                                                                   |          | Incorporated herein by reference to Exhibit 10.1 to Equity
    Offices 2005 First Quarter Form 10-Q                                   
|           
|            | 10.35 |  |             | Form of Non-Qualified Share Option Agreement for Members of the
    Board of Trustees                                                                                                                  |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on February 23, 2005
|           
|            | 10.36 |  |             | Form of Participant Summary and Restricted Share Agreement for
    Trustees                                                                                                                            |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on February 23, 2005
|           
|            | 10.37 |  |             | Form of Non-Qualified Share Option Agreement for Employees                                                                                                                                             |          | Filed herewith                                                                                                                         
|           
|            | 10.38 |  |             | Form of Participant Summary and Restricted Share Agreement for
    Employees                                                                                                                           |          | Filed herewith                                                                                                                         
|           
|            | 10.39 |  |             | Summary of 2005 Trustee Compensation Program                                                                                                                                                           |          | Incorporated by reference to Exhibit 10.1 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on May 27, 2005     

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|            |        |  |             |                                                                                                                                                                                                                                                                                          |          |                                                                                                                                        
|----------- | ------ |  | ----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ---------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |        |  | Description |                                                                                                                                                                                                                                                                                          | Location
|            |        |  |             |                                                                                                                                                                                                                                                                                          |         
|           
|            | 10.40 |  |             | Form of Participant Summary and Performance Award Agreement
    (LTIP)                                                                                                                                                                                                                   |          | Incorporated by reference to Exhibit 10.2 to Equity
    Offices Current Report on Form 8-K filed with the SEC
    on December 21, 2005
|           
|            | 10.41  |  |             | Revolving Credit Agreement for $1,250,000,000 Revolving Credit
    Facility dated as of August 4, 2005 among EOP Operating
    Limited Partnership and the Banks listed therein, and related
    Guaranty of Payment                                                                     |          | Incorporated herein by reference to Exhibit 10.1 to EOP
    Partnerships 2005 Second Quarter Form 10-Q                                
|           
|            | 10.42  |  |             | Amended and Restated Credit Agreement for $750,000,000 Credit
    Facility dated as of December 9, 2005 among EOP Operating
    Limited Partnership and the Banks listed therein (including
    option to expand by $250,000,000 to $1,000,000,000), and related
    Guaranty of Payment |          | Incorporated by reference to Exhibit 10.10 to EOP
    Partnerships 2005 Annual Report on Form 10-K                                    
|           
|            | 10.43  |  |             | Credit Agreement for $500,000,000 Credit Facility dated as of
    February 28, 2006 among EOP Operating Limited Partnership,
    the Banks listed therein, Merrill Lynch Bank USA, and Merrill,
    Lynch, Pierce, Fenner & Smith Incorporated, and related
    Guaranty of Payment      |          | Incorporated by reference to Exhibit 10.11 to EOP
    Partnerships 2005 Annual Report on Form 10-K                                    
|           
|            | 12.1   |  |             | Statement of Earnings to Fixed Charges                                                                                                                                                                                                                                                   |          | Filed herewith                                                                                                                         
|           
|            | 21.1   |  |             | List of Subsidiaries                                                                                                                                                                                                                                                                     |          | Incorporated by reference to Exhibit 21.1 to Equity
    Offices 2002 Annual Report on Form 10-K                                       
|           
|            | 23.1   |  |             | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                 |          | Filed herewith                                                                                                                         
|           
|            | 31.1   |  |             | Certifications of Chief Executive Officer pursuant to
    Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as
    amended                                                                                                                                                        |          | Filed herewith                                                                                                                         
|           
|            | 31.2   |  |             | Certifications of Chief Financial Officer pursuant to
    Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as
    amended                                                                                                                                                        |          | Filed herewith                                                                                                                         
|           
|            | 32.1   |  |             | Certifications of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                           |          | Filed herewith                                                                                                                         
|           
|            | 99.1   |  |             | 1997 Non-Qualified Employee Share Purchase Plan Financial
    Statements as of and for the years ended December 31, 2005,
    2004 and 2003                                                                                                                                              |          | Filed herewith                                                                                                                         






|  |                                                                                    
|- | -----------------------------------------------------------------------------------
| | Represents a management contract or compensatory plan, contract
    or arrangement.

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Schedule III  Real Estate and Accumulated
Depreciation as of December 31, 2005


| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          |  |  |   |         |   |  |           |  |          |  |  |    | 
| |  | --------------------------------------------- |  | ----- | --- |  | -------- | ---------- | ------- | ------------ | -- | ------------ | ------- | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ---- | - | ------- | ------------ | ------------ | - | ---- |  | ------- | ------------ | ------- | - | ------------- | - | ------ | --------------- | ----------- | - | ---------- |  | -------- | - | -------- |  |  | - | ------- | - |  | --------- |  | -------- |  |  | -- | 
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |      |   |         |              |              |   |      |  |         |             
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         | Subsequent to |              |                   | Close of Period |              |                         |              |      |   |         |              |              |   |      | 
| |  |                                               |  |       |     |  |          |            |         |              |    | Initial Cost |         |               | Acquisition  |                   |                 | 12/31/05     |                         |              |      |   |         |              |              |   |      |  |        
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              | Date of      |   |      |  |        
| |  |                                               |  |       |     |  |          |            |         | Encumbrances |    |              |         |               | Building and |                   |                 |              |                         | Building and |      |   |         |              | Building and |   |      |  |         | Accumulated  |         |   | Construction/ |   | Date   |                 | Depreciable |  
| |  | Description                                   |  | Notes |     |  | Location |            | State   |              |    | at 12/31/05  |         |               | Land         |                   |                 | Improvements |                         |              | Land |   |         | Improvements |              |   | Land |  |         | Improvements |         |   | Total(1)      |   |        | Depreciation(1) |             |   | Renovation |  | Acquired |   | Lives(2) | 
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          | 
| |  | Office Properties:                            |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          |  |  |   |         |   |  |           |  |          |  |  |    | 
| |  | Atlanta Region                                |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          |  |  |   |         |   |  |           |  |          |  |  |    | 
| |  | 200 Galleria                                  |  |       |     |  |          | Atlanta    |         |              | GA |              |         | $             |             |                   |                 | $            | 10,282                  |              |      | $ | 58,266  |              |              | $ |     |  |         | $            | 4,914   |   |               | $ | 10,282 |                 |             | $ | 63,180     |  |          | $ | 73,462   |  |  | $ | (9,919  | ) |  | 1985      |  | 06/19/00 |  |  | 40 | 
| |  | One Ninety One Peachtree Tower                |  |       |     |  |          | Atlanta    |         |              | GA |              |         |               |             |                   |                 |              | 46,500                  |              |      |   | 263,500 |              |              |   |     |  |         |              | 1,194   |   |               |   | 46,500 |                 |             |   | 264,694    |  |          |   | 311,194  |  |  |   | (37,093 | ) |  | 1991      |  | 06/19/00 |  |  | 40 | 
| |  | Central Park                                  |  |       |     |  |          | Atlanta    |         |              | GA |              |         |               |             |                   |                 |              | 9,163                   |              |      |   | 82,463  |              |              |   |     |  |         |              | 9,123   |   |               |   | 9,163  |                 |             |   | 91,586     |  |          |   | 100,749  |  |  |   | (20,931 | ) |  | 1986      |  | 10/17/95 |  |  | 40 | 
| |  | Lakeside Office Park                          |  |       |     |  |          | Atlanta    |         |              | GA |              |         |               |             |                   |                 |              | 4,792                   |              |      |   | 43,132  |              |              |   |     |  |         |              | 4,173   |   |               |   | 4,792  |                 |             |   | 47,305     |  |          |   | 52,097   |  |  |   | (10,179 | ) |  | 1972-1978 |  | 12/19/97 |  |  | 40 | 
| |  | Paces West                                    |  |       |     |  |          | Atlanta    |         |              | GA |              |         |               |             |                   |                 |              | 8,336                   |              |      |   | 75,025  |              |              |   |     |  |         |              | 9,652   |   |               |   | 8,336  |                 |             |   | 84,677     |  |          |   | 93,013   |  |  |   | (19,203 | ) |  | 1988      |  | 10/31/94 |  |  | 40 | 
| |  | Perimeter Center                              |  |       |     |  |          | Atlanta    |         |              | GA |              |         |               |             |                   |                 |              | 43,464                  |              |      |   | 391,237 |              |              |   | 267  |  |         |              | 38,880  |   |               |   | 43,731 |                 |             |   | 430,117    |  |          |   | 473,848  |  |  |   | (95,651 | ) |  | 1970/1989 |  | 12/19/97 |  |  | 40 | 
| |  | 211 Perimeter Center                          |  |       | (3) |  |          | Atlanta    |         |              | GA |              |         |               |             |                   |                 |              | 15,379                  |              |      |   | 28,055  |              |              |   |     |  |         |              |        |   |               |   | 15,379 |                 |             |   | 28,055     |  |          |   | 43,434   |  |  |   | (327    | ) |  | 1980/2000 |  | 11/10/05 |  |  | 24 | 
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          | 
|
| |  | Atlanta Region Totals                         |  |       |     |  |          |            |        |              |    |              | 137,916 |               |              |                   | 941,678         |              |                         |              | 267  |   |         |              | 67,936       |   |      |  | 138,183 |              |         |   | 1,009,614     |   |        |                 | 1,147,797   |   |            |  | (193,303 | ) |          |  |  |   |         |   |  |          
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |           
|
| |  | Boston Region                                 |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          |  |  |   |         |   |  |           |  |          |  |  |    | 
| |  | Crosby Corporate Center                       |  |       | (4) |  |          | Bedford    |         |              | MA |              |         |               |             |                   |                 |              | 5,958                   |              |      |   | 53,620  |              |              |   | 115  |  |         |              | (27,529 | ) |               |   | 6,073  |                 |             |   | 26,091     |  |          |   | 32,164   |  |  |   |        |   |  | 1996      |  | 12/19/97 |  |  | 40 | 
| |  | Crosby Corporate Center II                    |  |       | (4) |  |          | Bedford    |         |              | MA |              |         |               |             |                   |                 |              | 9,385                   |              |      |   | 27,584  |              |              |   | 8    |  |         |              | (13,411 | ) |               |   | 9,393  |                 |             |   | 14,173     |  |          |   | 23,566   |  |  |   |        |   |  | 1998      |  | 12/19/97 |  |  | 40 | 
| |  | 125 Summer Street                             |  |       |     |  |          | Boston     |         |              | MA |              |         |               | 67,665       |                   |                 |              | 18,000                  |              |      |   | 102,000 |              |              |   |     |  |         |              | 13,593  |   |               |   | 18,000 |                 |             |   | 115,593    |  |          |   | 133,593  |  |  |   | (17,925 | ) |  | 1989      |  | 06/19/00 |  |  | 40 | 
| |  | 222 Berkeley Street                           |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 25,593                  |              |      |   | 145,029 |              |              |   |     |  |         |              | 6,040   |   |               |   | 25,593 |                 |             |   | 151,069    |  |          |   | 176,662  |  |  |   | (22,565 | ) |  | 1991      |  | 06/19/00 |  |  | 40 | 
| |  | 500 Boylston Street                           |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 39,000                  |              |      |   | 221,000 |              |              |   |     |  |         |              | 3,383   |   |               |   | 39,000 |                 |             |   | 224,383    |  |          |   | 263,383  |  |  |   | (31,162 | ) |  | 1988      |  | 06/19/00 |  |  | 40 | 
| |  | Sixty State Street                            |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              |                        |              |      |   | 256,000 |              |              |   |     |  |         |              | 9,382   |   |               |   |       |                 |             |   | 265,382    |  |          |   | 265,382  |  |  |   | (37,318 | ) |  | 1979      |  | 06/19/00 |  |  | 40 | 
| |  | 100 Summer Street                             |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 22,271                  |              |      |   | 200,439 |              |              |   |     |  |         |              | 68,756  |   |               |   | 22,271 |                 |             |   | 269,195    |  |          |   | 291,466  |  |  |   | (53,208 | ) |  | 1974/1990 |  | 03/18/98 |  |  | 40 | 
| |  | 150 Federal Street                            |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 14,131                  |              |      |   | 127,182 |              |              |   |     |  |         |              | 18,543  |   |               |   | 14,131 |                 |             |   | 145,725    |  |          |   | 159,856  |  |  |   | (35,348 | ) |  | 1988      |  | 12/19/97 |  |  | 40 | 
| |  | 175 Federal Street                            |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 4,894                   |              |      |   | 44,045  |              |              |   |     |  |         |              | 6,047   |   |               |   | 4,894  |                 |             |   | 50,092     |  |          |   | 54,986   |  |  |   | (11,017 | ) |  | 1977      |  | 12/19/97 |  |  | 40 | 
| |  | 225 Franklin Street                           |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 34,608                  |              |      |   | 311,471 |              |              |   |     |  |         |              | 15,149  |   |               |   | 34,608 |                 |             |   | 326,620    |  |          |   | 361,228  |  |  |   | (67,999 | ) |  | 1966/1996 |  | 12/19/97 |  |  | 40 | 
| |  | 28 State Street                               |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 9,513                   |              |      |   | 85,623  |              |              |   |     |  |         |              | 42,960  |   |               |   | 9,513  |                 |             |   | 128,583    |  |          |   | 138,096  |  |  |   | (40,474 | ) |  | 1968/1997 |  | 01/23/95 |  |  | 40 | 
| |  | Center Plaza                                  |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 18,942                  |              |      |   | 170,480 |              |              |   |     |  |         |              | 17,634  |   |               |   | 18,942 |                 |             |   | 188,114    |  |          |   | 207,056  |  |  |   | (39,019 | ) |  | 1969      |  | 12/19/97 |  |  | 40 | 
| |  | Russia Wharf                                  |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              | 3,891                   |              |      |   | 35,023  |              |              |   |     |  |         |              | 2,956   |   |               |   | 3,891  |                 |             |   | 37,979     |  |          |   | 41,870   |  |  |   | (9,040  | ) |  | 1978-1982 |  | 12/19/97 |  |  | 40 | 
| |  | South Station                                 |  |       |     |  |          | Boston     |         |              | MA |              |         |               |             |                   |                 |              |                        |              |      |   | 31,074  |              |              |   |     |  |         |              | 2,279   |   |               |   |       |                 |             |   | 33,353     |  |          |   | 33,353   |  |  |   | (6,911  | ) |  | 1988      |  | 12/19/97 |  |  | 40 | 
| |  | 25 Mall Road                                  |  |       | (3) |  |          | Burlington |         |              | MA |              |         |               |             |                   |                 |              | 5,217                   |              |      |   | 49,739  |              |              |   |     |  |         |              | 745     |   |               |   | 5,217  |                 |             |   | 50,484     |  |          |   | 55,701   |  |  |   | (1,299  | ) |  | 1987      |  | 07/07/05 |  |  | 45 | 
| |  | New England Executive Park                    |  |       |     |  |          | Burlington |         |              | MA |              |         |               |             |                   |                 |              | 14,733                  |              |      |   | 132,594 |              |              |   | 194  |  |         |              | 17,465  |   |               |   | 14,927 |                 |             |   | 150,059    |  |          |   | 164,986  |  |  |   | (33,805 | ) |  | 1970/1985 |  | 12/19/97 |  |  | 40 | 
| |  | New England Executive Park 17                 |  |       |     |  |          | Burlington |         |              | MA |              |         |               |             |                   |                 |              | 904                     |              |      |   | 8,135   |              |              |   | 8    |  |         |              | 952     |   |               |   | 912    |                 |             |   | 9,087      |  |          |   | 9,999    |  |  |   | (2,151  | ) |  | 1970/1985 |  | 12/19/97 |  |  | 40 | 
| |  | The Tower at N.E.E.P                          |  |       |     |  |          | Burlington |         |              | MA |              |         |               |             |                   |                 |              | 2,793                   |              |      |   | 31,462  |              |              |   | 5    |  |         |              | 11,590  |   |               |   | 2,798  |                 |             |   | 43,052     |  |          |   | 45,850   |  |  |   | (9,036  | ) |  | 1971/1999 |  | 03/31/98 |  |  | 40 | 
| |  | Cambridge Science Center (a.k.a. Riverview I) |  |       | (5) |  |          | Cambridge  |         |              | MA |              |         |               |             |                   |                 |              | 1,959                   |              |      |   | 35,916  |              |              |   |     |  |         |              | 7,476   |   |               |   | 1,959  |                 |             |   | 43,392     |  |          |   | 45,351   |  |  |   | (2,343  | ) |  | 1984/2004 |  | 12/19/97 |  |  | 40 | 
| |  | 245 First Street (a.k.a Riverview II)         |  |       |     |  |          | Cambridge  |         |              | MA |              |         |               |             |                   |                 |              | 3,978                   |              |      |   | 35,804  |              |              |   | 6    |  |         |              | 3,914   |   |               |   | 3,984  |                 |             |   | 39,718     |  |          |   | 43,702   |  |  |   | (9,754  | ) |  | 1985-1986 |  | 12/19/97 |  |  | 40 | 
| |  | One Memorial Drive                            |  |       |     |  |          | Cambridge  |         |              | MA |              |         |               | 54,754       |                   |                 |              | 14,862                  |              |      |   | 88,216  |              |              |   |     |  |         |              | 5,492   |   |               |   | 14,862 |                 |             |   | 93,708     |  |          |   | 108,570  |  |  |   | (13,569 | ) |  | 1985      |  | 06/19/00 |  |  | 40 | 
| |  | One Canal Park                                |  |       |     |  |          | Cambridge  |         |              | MA |              |         |               |             |                   |                 |              | 2,006                   |              |      |   | 18,054  |              |              |   |     |  |         |              | 2,177   |   |               |   | 2,006  |                 |             |   | 20,231     |  |          |   | 22,237   |  |  |   | (4,337  | ) |  | 1987      |  | 12/19/97 |  |  | 40 | 
| |  | Ten Canal Park                                |  |       |     |  |          | Cambridge  |         |              | MA |              |         |               |             |                   |                 |              | 2,383                   |              |      |   | 21,448  |              |              |   |     |  |         |              | 181     |   |               |   | 2,383  |                 |             |   | 21,629     |  |          |   | 24,012   |  |  |   | (4,345  | ) |  | 1987      |  | 12/19/97 |  |  | 40 | 
| |  | Riverside Center                              |  |       |     |  |          | Newton     |         |              | MA |              |         |               |             |                   |                 |              | 24,000                  |              |      |   | 69,849  |              |              |   |     |  |         |              | 19,933  |   |               |   | 24,000 |                 |             |   | 89,782     |  |          |   | 113,782  |  |  |   | (18,112 | ) |  | 2000      |  | 12/19/97 |  |  | 40 | 
| |  | 175 Wyman Street                              |  |       |     |  |          | Walthan    |         |              | MA |              |         |               |             |                   |                 |              | 14,600                  |              |      |   | 5,400   |              |              |   | 3    |  |         |              | 2,127   |   |               |   | 14,603 |                 |             |   | 7,527      |  |          |   | 22,130   |  |  |   | (6,831  | ) |  | 1999      |  | 12/19/97 |  |  | 40 | 
| |  | Wellesley Office Park 1-4                     |  |       |     |  |          | Wellesley  |         |              | MA |              |         |               |             |                   |                 |              | 5,518                   |              |      |   | 49,662  |              |              |   | 6    |  |         |              | 6,625   |   |               |   | 5,524  |                 |             |   | 56,287     |  |          |   | 61,811   |  |  |   | (12,159 | ) |  | 1963/1984 |  | 12/19/97 |  |  | 40 | 
| |  | Wellesley 5-7                                 |  |       |     |  |          | Wellesley  |         |              | MA |              |         |               |             |                   |                 |              | 9,335                   |              |      |   | 84,018  |              |              |   | 13   |  |         |              | 6,841   |   |               |   | 9,348  |                 |             |   | 90,859     |  |          |   | 100,207  |  |  |   | (18,734 | ) |  | 1963/1984 |  | 12/19/97 |  |  | 40 | 
| |  | Wellesley 8                                   |  |       |     |  |          | Wellesley  |         |              | MA |              |         |               |             |                   |                 |              | 1,639                   |              |      |   | 14,754  |              |              |   | 2    |  |         |              | 289     |   |               |   | 1,641  |                 |             |   | 15,043     |  |          |   | 16,684   |  |  |   | (3,033  | ) |  | 1963/1984 |  | 12/19/97 |  |  | 40 | 
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          | 
|
| |  | Boston Region Totals                          |  |       |     |  |          |            | 122,419 |              |    |              | 310,113 |               |              |                   | 2,455,621       |              |                         |              | 360  |   |         |              | 251,589      |   |      |  | 310,473 |              |         |   | 2,707,210     |   |        |                 | 3,017,683   |   |            |  | (511,494 | ) |          |  |  |   |         |   |  |          
| |  |                                               |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |           
|
| |  | Chicago Region                                |  |       |     |  |          |            |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |   |         |              |              |   |      |  |         |              |         |   |               |   |        |                 |             |   |            |  |          |   |          |  |  |   |         |   |  |           |  |          |  |  |    | 
| |  | 300 W. 6th Street                             |  |       | (3) |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 8,359                   |              |      |   | 122,714 |              |              |   |     |  |         |              |        |   |               |   | 8,359  |                 |             |   | 122,714    |  |          |   | 131,073  |  |  |   | (636    | ) |  | 2002      |  | 10/04/05 |  |  | 56 | 
| |  | Great Hills Plaza                             |  |       |     |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 3,559                   |              |      |   | 14,238  |              |              |   |     |  |         |              |        |   |               |   | 3,559  |                 |             |   | 14,238     |  |          |   | 17,797   |  |  |   | (11     | ) |  | 1985      |  | 12/21/05 |  |  | 42 | 
| |  | Park 22                                       |  |       | (3) |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 2,779                   |              |      |   | 32,223  |              |              |   |     |  |         |              | 93      |   |               |   | 2,779  |                 |             |   | 32,316     |  |          |   | 35,095   |  |  |   | (1,332  | ) |  | 2000      |  | 03/22/05 |  |  | 40 | 
| |  | One Congress Plaza                            |  |       |     |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 6,502                   |              |      |   | 58,521  |              |              |   |     |  |         |              | 9,033   |   |               |   | 6,502  |                 |             |   | 67,554     |  |          |   | 74,056   |  |  |   | (15,314 | ) |  | 1987      |  | 11/12/93 |  |  | 40 | 
| |  | One American Center                           |  |       |     |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              |                        |              |      |   | 70,812  |              |              |   |     |  |         |              | 12,222  |   |               |   |       |                 |             |   | 83,034     |  |          |   | 83,034   |  |  |   | (18,674 | ) |  | 1984      |  | 11/01/95 |  |  | 40 | 
| |  | Research Park Plaza I & II                    |  |       | (3) |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 6,301                   |              |      |   | 47,470  |              |              |   |     |  |         |              | 206     |   |               |   | 6,301  |                 |             |   | 47,676     |  |          |   | 53,977   |  |  |   | (939    | ) |  | 1999      |  | 06/16/05 |  |  | 54 | 
| |  | San Jacinto Center                            |  |       |     |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 5,075                   |              |      |   | 45,671  |              |              |   |     |  |         |              | 9,920   |   |               |   | 5,075  |                 |             |   | 55,591     |  |          |   | 60,666   |  |  |   | (12,482 | ) |  | 1987      |  | 12/13/91 |  |  | 40 | 
| |  | Stonebridge II                                |  |       | (3) |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 1,505                   |              |      |   | 35,379  |              |              |   |     |  |         |              |        |   |               |   | 1,505  |                 |             |   | 35,379     |  |          |   | 36,884   |  |  |   | (382    | ) |  | 2001      |  | 08/19/05 |  |  | 46 | 
| |  | Westech 360                                   |  |       | (3) |  |          | Austin     |         |              | TX |              |         |               |             |                   |                 |              | 2,680                   |              |      |   | 25,961  |              |              |   |     |  |         |              | 243     |   |               |   | 2,680  |                 |             |   | 26,204     |  |          |   | 28,884   |  |  |   | (2,430  | ) |  | 1986      |  | 11/19/04 |  |  | 33 | 
| |  | 101 North Wacker                              |  |       |     |  |          | Chicago    |         |              | IL |              |         |               |             |                   |                 |              | 10,035                  |              |      |   | 90,319  |              |              |   |     |  |         |              | 5,877   |   |               |   | 10,035 |                 |             |   | 96,196     |  |          |   | 106,231  |  |  |   | (21,139 | ) |  | 1980/1990 |  | 12/19/97 |  |  | 40 | 
| |  | 200 West Adams                                |  |       |     |  |          | Chicago    |         |              | IL |              |         |               |             |                   |                 |              | 11,654                  |              |      |   | 104,887 |              |              |   |     |  |         |              | 10,405  |   |               |   | 11,654 |                 |             |   | 115,292    |  |          |   | 126,946  |  |  |   | (26,451 | ) |  | 1985/1996 |  | 12/19/97 |  |  | 40 | 
| |  | 30 North LaSalle                              |  |       |     |  |          | Chicago    |         |              | IL |              |         |               |             |                   |                 |              | 12,489                  |              |      |   | 112,401 |              |              |   |     |  |         |              | 9,304   |   |               |   | 12,489 |                 |             |   | 121,705    |  |          |   | 134,194  |  |  |   | (28,152 | ) |  | 1974/1990 |  | 06/13/97 |  |  | 40 | 
| |  | Civic Opera House                             |  |       |     |  |          | Chicago    |         |              | IL |              |         |               |             |                   |                 |              | 12,771                  |              |      |   | 114,942 |              |              |   |     |  |         |              | 9,866   |   |               |   | 12,771 |                 |             |   | 124,808    |  |          |   | 137,579  |  |  |   | (27,672 | ) |  | 1929/1996 |  | 12/19/97 |  |  | 40 | 

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##### Table of Contents





| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         |               |              |                   |                 |              |                         |              |       |  |         |              |              |  |      |  |         |              |         |   |               |  |        |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |                  |  |          |  |  |    | 
| |  | ----------------------------------------- |  | ----- | ------ |  | -------- | ---------------- | ------- | ------------ | -- | ------------ | ------- | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ----- |  | ------- | ------------ | ------------ |  | ---- |  | ------- | ------------ | ------- | - | ------------- |  | ------ | --------------- | ----------- |  | ---------- |  | -------- | - | -------- |  |  |  | ------- | - |  | ---------------- |  | -------- |  |  | -- | 
| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |       |  |         |              |              |  |      |  |         |             
| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         | Subsequent to |              |                   | Close of Period |              |                         |              |       |  |         |              |              |  |      | 
| |  |                                           |  |       |        |  |          |                  |         |              |    | Initial Cost |         |               | Acquisition  |                   |                 | 12/31/05     |                         |              |       |  |         |              |              |  |      |  |        
| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         |               |              |                   |                 |              |                         |              |       |  |         |              | Date of      |  |      |  |        
| |  |                                           |  |       |        |  |          |                  |         | Encumbrances |    |              |         |               | Building and |                   |                 |              |                         | Building and |       |  |         |              | Building and |  |      |  |         | Accumulated  |         |   | Construction/ |  | Date   |                 | Depreciable | 
| |  | Description                               |  | Notes |        |  | Location |                  | State   |              |    | at 12/31/05  |         |               | Land         |                   |                 | Improvements |                         |              | Land  |  |         | Improvements |              |  | Land |  |         | Improvements |         |   | Total(1)      |  |        | Depreciation(1) |             |  | Renovation |  | Acquired |   | Lives(2) | 
| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         |               |              |                   |                 |              |                         |              |       |  |         |              |              |  |      |  |         |              |         |   |               |  |        |                 |             |  |            |  |          |   |          | 
| |  | One North Franklin                        |  |       |        |  |          | Chicago          |         |              | IL |              |         |               |             |                   |                 |              | 9,830                   |              |       |  | 88,474  |              |              |  |     |  |         |              | 10,809  |   |               |  | 9,830  |                 |             |  | 99,283     |  |          |   | 109,113  |  |  |  | (21,412 | ) |  | 1991             |  | 12/31/92 |  |  | 40 | 
| |  | Presidents Plaza                          |  |       |        |  |          | Chicago          |         |              | IL |              |         |               |             |                   |                 |              | 13,435                  |              |       |  | 120,919 |              |              |  |     |  |         |              | 12,825  |   |               |  | 13,435 |                 |             |  | 133,744    |  |          |   | 147,179  |  |  |  | (28,230 | ) |  | 1980-1982        |  | 12/19/97 |  |  | 40 | 
| |  | Community Corporate Center                |  |       | (4)    |  |          | Columbus         |         |              | OH |              |         |               |             |                   |                 |              | 3,019                   |              |       |  | 27,170  |              |              |  |     |  |         |              | (10,835 | ) |               |  | 3,019  |                 |             |  | 16,335     |  |          |   | 19,354   |  |  |  | (13     | ) |  | 1987             |  | 06/14/90 |  |  | 40 | 
| |  | One Crosswoods                            |  |       | (4)(6) |  |          | Columbus         |         |              | OH |              |         |               |             |                   |                 |              | 1,059                   |              |       |  | 9,530   |              |              |  |     |  |         |              | (6,027  | ) |               |  | 1,059  |                 |             |  | 3,503      |  |          |   | 4,562    |  |  |  | 16      |   |  | 1984             |  | 11/12/93 |  |  | 40 | 
| |  | Corporate 500 Centre                      |  |       |        |  |          | Deerfield        |         |              | IL |              |         |               | 76,597       |                   |                 |              | 20,100                  |              |       |  | 113,900 |              |              |  |     |  |         |              | 12,467  |   |               |  | 20,100 |                 |             |  | 126,367    |  |          |   | 146,467  |  |  |  | (18,867 | ) |  | 1986/1990        |  | 06/19/00 |  |  | 40 | 
| |  | 1700 Higgins Centre                       |  |       |        |  |          | Des Plaines      |         |              | IL |              |         |               |             |                   |                 |              | 1,323                   |              |       |  | 11,908  |              |              |  | 64   |  |         |              | 1,693   |   |               |  | 1,387  |                 |             |  | 13,601     |  |          |   | 14,988   |  |  |  | (3,135  | ) |  | 1986             |  | 11/12/93 |  |  | 40 | 
| |  | Tri-State International                   |  |       |        |  |          | Lincolnshire     |         |              | IL |              |         |               |             |                   |                 |              | 10,925                  |              |       |  | 98,327  |              |              |  | 291  |  |         |              | 7,098   |   |               |  | 11,216 |                 |             |  | 105,425    |  |          |   | 116,641  |  |  |  | (22,620 | ) |  | 1986             |  | 12/19/97 |  |  | 40 | 
| |  | One Lakeway Center                        |  |       |        |  |          | Metairie         |         |              | LA |              |         |               |             |                   |                 |              | 2,804                   |              |       |  | 25,235  |              |              |  |     |  |         |              | 4,538   |   |               |  | 2,804  |                 |             |  | 29,773     |  |          |   | 32,577   |  |  |  | (7,756  | ) |  | 1981/1996        |  | 11/12/93 |  |  | 40 | 
| |  | Two Lakeway Center                        |  |       |        |  |          | Metairie         |         |              | LA |              |         |               |             |                   |                 |              | 4,644                   |              |       |  | 41,792  |              |              |  | 49   |  |         |              | 5,302   |   |               |  | 4,693  |                 |             |  | 47,094     |  |          |   | 51,787   |  |  |  | (11,391 | ) |  | 1984/1996        |  | 11/12/93 |  |  | 40 | 
| |  | Three Lakeway Center                      |  |       |        |  |          | Metairie         |         |              | LA |              |         |               |             |                   |                 |              | 4,695                   |              |       |  | 43,661  |              |              |  | 59   |  |         |              | 4,536   |   |               |  | 4,754  |                 |             |  | 48,197     |  |          |   | 52,951   |  |  |  | (11,625 | ) |  | 1987/1996        |  | 11/12/93 |  |  | 40 | 
| |  | LaSalle Plaza                             |  |       | (4)    |  |          | Minneapolis      |         |              | MN |              |         |               |             |                   |                 |              | 9,681                   |              |       |  | 87,127  |              |              |  |     |  |         |              | (15,749 | ) |               |  | 9,681  |                 |             |  | 71,378     |  |          |   | 81,059   |  |  |  | (1,055  | ) |  | 1991             |  | 11/25/97 |  |  | 40 | 
| |  | Wells Fargo Center                        |  |       |        |  |          | Minneapolis      |         |              | MN |              |         |               | 110,000      |                   |                 |              | 39,045                  |              |       |  | 221,255 |              |              |  |     |  |         |              | 3,510   |   |               |  | 39,045 |                 |             |  | 224,765    |  |          |   | 263,810  |  |  |  | (31,249 | ) |  | 1988             |  | 06/19/00 |  |  | 40 | 
| |  | 1111 West 22nd Street                     |  |       |        |  |          | Oakbrook         |         |              | IL |              |         |               |             |                   |                 |              | 4,834                   |              |       |  | 43,508  |              |              |  | 48   |  |         |              | 2,961   |   |               |  | 4,882  |                 |             |  | 46,469     |  |          |   | 51,351   |  |  |  | (9,583  | ) |  | 1984             |  | 12/19/97 |  |  | 40 | 
| |  | Commerce Plaza                            |  |       | (3)    |  |          | Oakbrook         |         |              | IL |              |         |               |             |                   |                 |              | 18,000                  |              |       |  | 76,149  |              |              |  |     |  |         |              | 1,269   |   |               |  | 18,000 |                 |             |  | 77,418     |  |          |   | 95,418   |  |  |  | (8,433  | ) |  | 1972-1974/1988   |  | 09/23/04 |  |  | 35 | 
| |  | One Lincoln Centre                        |  |       |        |  |          | Oakbrook         |         |              | IL |              |         |               |             |                   |                 |              | 7,350                   |              |       |  | 41,650  |              |              |  |     |  |         |              | 5,471   |   |               |  | 7,350  |                 |             |  | 47,121     |  |          |   | 54,471   |  |  |  | (7,355  | ) |  | 1986             |  | 06/19/00 |  |  | 40 | 
| |  | Oakbrook Terrace Tower                    |  |       |        |  |          | Oakbrook Terrace |         |              | IL |              |         |               |             |                   |                 |              | 11,950                  |              |       |  | 107,552 |              |              |  | 486  |  |         |              | 7,927   |   |               |  | 12,436 |                 |             |  | 115,479    |  |          |   | 127,915  |  |  |  | (26,679 | ) |  | 1988             |  | 04/16/97 |  |  | 40 | 
| |  | Westbrook Corporate Center                |  |       |        |  |          | Westchester      |         |              | IL |              |         |               | 92,102       |                   |                 |              | 24,875                  |              |       |  | 223,874 |              |              |  | 30   |  |         |              | 29,275  |   |               |  | 24,905 |                 |             |  | 253,149    |  |          |   | 278,054  |  |  |  | (54,902 | ) |  | 1985/1996        |  | 12/19/97 |  |  | 40 | 
| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         |               |              |                   |                 |              |                         |              |       |  |         |              |              |  |      |  |         |              |         |   |               |  |        |                 |             |  |            |  |          |   |          | 
| |  | Chicago Region Totals                     |  |       |        |  |          |                  | 278,699 |              |    |              | 271,278 |               |              |                   | 2,257,569       |              |                         |              | 1,027 |  |         |              | 144,239      |  |      |  | 272,305 |              |         |   | 2,401,808     |  |        |                 | 2,674,113   |  |            |  | (419,903 | ) |          |  |  |  |         |   |  |                 
| |  |                                           |  |       |        |  |          |                  |         |              |    |              |         |               |              |                   |                 |              |                         |              |       |  |         |              |              |  |      |  |         |              |         |   |               |  |        |                 |             |  |           
| |  | Los Angeles Region                        |  |       |        |  |          |                  |         |              |    |              |         |               |              |                   |                 |              |                         |              |       |  |         |              |              |  |      |  |         |              |         |   |               |  |        |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |                  |  |          |  |  |    | 
| |  | Stadium Towers                            |  |       |        |  |          | Anaheim          |         |              | CA |              |         |               |             |                   |                 |              | 6,509                   |              |       |  | 36,886  |              |              |  |     |  |         |              | 1,804   |   |               |  | 6,509  |                 |             |  | 38,690     |  |          |   | 45,199   |  |  |  | (4,943  | ) |  | 1988             |  | 07/02/01 |  |  | 40 | 
| |  | Brea Corporate Place                      |  |       |        |  |          | Brea             |         |              | CA |              |         |               |             |                   |                 |              |                        |              |       |  | 35,129  |              |              |  |     |  |         |              | 1,780   |   |               |  |       |                 |             |  | 36,909     |  |          |   | 36,909   |  |  |  | (4,516  | ) |  | 1987             |  | 07/02/01 |  |  | 40 | 
| |  | Brea Corporate Plaza                      |  |       |        |  |          | Brea             |         |              | CA |              |         |               |             |                   |                 |              | 1,902                   |              |       |  | 10,776  |              |              |  |     |  |         |              | 697     |   |               |  | 1,902  |                 |             |  | 11,473     |  |          |   | 13,375   |  |  |  | (1,706  | ) |  | 1982             |  | 07/02/01 |  |  | 40 | 
| |  | Brea Financial Commons                    |  |       |        |  |          | Brea             |         |              | CA |              |         |               |             |                   |                 |              | 2,640                   |              |       |  | 14,960  |              |              |  |     |  |         |              | 862     |   |               |  | 2,640  |                 |             |  | 15,822     |  |          |   | 18,462   |  |  |  | (1,928  | ) |  | 1982/1989        |  | 07/02/01 |  |  | 40 | 
| |  | Brea Park Centre                          |  |       |        |  |          | Brea             |         |              | CA |              |         |               |             |                   |                 |              | 2,682                   |              |       |  | 15,198  |              |              |  |     |  |         |              | 2,208   |   |               |  | 2,682  |                 |             |  | 17,406     |  |          |   | 20,088   |  |  |  | (2,690  | ) |  | 1979-1982,1990   |  | 07/02/01 |  |  | 40 | 
| |  | SunAmerica Center                         |  |       | (7)    |  |          | Century City     |         |              | CA |              |         |               | 198,349      |                   |                 |              | 47,863                  |              |       |  | 271,223 |              |              |  |     |  |         |              | 18,915  |   |               |  | 47,863 |                 |             |  | 290,138    |  |          |   | 338,001  |  |  |  | (47,665 | ) |  | 1990             |  | 09/07/99 |  |  | 40 | 
| |  | Cerritos Towne Center                     |  |       |        |  |          | Cerritos         |         |              | CA |              |         |               |             |                   |                 |              |                        |              |       |  | 60,368  |              |              |  |     |  |         |              | 3,646   |   |               |  |       |                 |             |  | 64,014     |  |          |   | 64,014   |  |  |  | (7,868  | ) |  | 1989/1998        |  | 07/02/01 |  |  | 40 | 
| |  | 700 North Brand                           |  |       |        |  |          | Glendale         |         |              | CA |              |         |               | 23,367       |                   |                 |              | 5,970                   |              |       |  | 33,828  |              |              |  |     |  |         |              | 3,554   |   |               |  | 5,970  |                 |             |  | 37,382     |  |          |   | 43,352   |  |  |  | (6,139  | ) |  | 1981             |  | 06/19/00 |  |  | 40 | 
| |  | 18301 Von Karman (a.k.a. Apple  Building) |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 6,027                   |              |       |  | 34,152  |              |              |  |     |  |         |              | 2,173   |   |               |  | 6,027  |                 |             |  | 36,325     |  |          |   | 42,352   |  |  |  | (5,831  | ) |  | 1991             |  | 06/19/00 |  |  | 40 | 
| |  | 18581 Teller                              |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 1,485                   |              |       |  | 8,415   |              |              |  |     |  |         |              | 2,562   |   |               |  | 1,485  |                 |             |  | 10,977     |  |          |   | 12,462   |  |  |  | (1,820  | ) |  | 1983             |  | 07/02/01 |  |  | 40 | 
| |  | 2600 Michelson                            |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 11,291                  |              |       |  | 63,984  |              |              |  |     |  |         |              | 5,391   |   |               |  | 11,291 |                 |             |  | 69,375     |  |          |   | 80,666   |  |  |  | (8,769  | ) |  | 1986             |  | 07/02/01 |  |  | 40 | 
| |  | Fairchild Corporate Center                |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 2,363                   |              |       |  | 13,388  |              |              |  |     |  |         |              | 774     |   |               |  | 2,363  |                 |             |  | 14,162     |  |          |   | 16,525   |  |  |  | (1,816  | ) |  | 1979             |  | 07/02/01 |  |  | 40 | 
| |  | Inwood Park                               |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 3,543                   |              |       |  | 20,079  |              |              |  |     |  |         |              | 1,036   |   |               |  | 3,543  |                 |             |  | 21,115     |  |          |   | 24,658   |  |  |  | (2,682  | ) |  | 1985/1996        |  | 07/02/01 |  |  | 40 | 
| |  | Tower 17                                  |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 7,562                   |              |       |  | 42,849  |              |              |  |     |  |         |              | 2,143   |   |               |  | 7,562  |                 |             |  | 44,992     |  |          |   | 52,554   |  |  |  | (5,596  | ) |  | 1987             |  | 07/02/01 |  |  | 40 | 
| |  | 1920 Main Plaza                           |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 5,481                   |              |       |  | 47,526  |              |              |  |     |  |         |              | 4,932   |   |               |  | 5,481  |                 |             |  | 52,458     |  |          |   | 57,939   |  |  |  | (12,676 | ) |  | 1988             |  | 09/29/94 |  |  | 40 | 
| |  | 2010 Main Plaza                           |  |       |        |  |          | Irvine           |         |              | CA |              |         |               |             |                   |                 |              | 5,197                   |              |       |  | 46,774  |              |              |  |     |  |         |              | 4,877   |   |               |  | 5,197  |                 |             |  | 51,651     |  |          |   | 56,848   |  |  |  | (12,239 | ) |  | 1988             |  | 12/13/94 |  |  | 40 | 
| |  | The Tower in Westwood                     |  |       |        |  |          | Los Angeles      |         |              | CA |              |         |               |             |                   |                 |              | 10,041                  |              |       |  | 56,899  |              |              |  |     |  |         |              | 2,341   |   |               |  | 10,041 |                 |             |  | 59,240     |  |          |   | 69,281   |  |  |  | (6,917  | ) |  | 1989             |  | 07/02/01 |  |  | 40 | 
| |  | 10880 Wilshire Boulevard                  |  |       |        |  |          | Los Angeles      |         |              | CA |              |         |               |             |                   |                 |              | 28,009                  |              |       |  | 149,841 |              |              |  |     |  |         |              | 12,801  |   |               |  | 28,009 |                 |             |  | 162,642    |  |          |   | 190,651  |  |  |  | (34,964 | ) |  | 1970/1992        |  | 12/19/97 |  |  | 40 | 
| |  | 10960 Wilshire Boulevard                  |  |       |        |  |          | Los Angeles      |         |              | CA |              |         |               |             |                   |                 |              | 16,841                  |              |       |  | 151,574 |              |              |  |     |  |         |              | 12,272  |   |               |  | 16,841 |                 |             |  | 163,846    |  |          |   | 180,687  |  |  |  | (32,354 | ) |  | 1971/1992        |  | 12/19/97 |  |  | 40 | 
| |  | 550 South Hope Street                     |  |       |        |  |          | Los Angeles      |         |              | CA |              |         |               |             |                   |                 |              | 10,016                  |              |       |  | 90,146  |              |              |  |     |  |         |              | 11,968  |   |               |  | 10,016 |                 |             |  | 102,114    |  |          |   | 112,130  |  |  |  | (22,413 | ) |  | 1991             |  | 10/06/97 |  |  | 40 | 
| |  | Two California Plaza                      |  |       |        |  |          | Los Angeles      |         |              | CA |              |         |               |             |                   |                 |              |                        |              |       |  | 156,197 |              |              |  |     |  |         |              | 52,346  |   |               |  |       |                 |             |  | 208,543    |  |          |   | 208,543  |  |  |  | (58,879 | ) |  | 1992             |  | 08/23/96 |  |  | 40 | 
| |  | 1201 Dove Street                          |  |       |        |  |          | Newport Beach    |         |              | CA |              |         |               |             |                   |                 |              | 1,998                   |              |       |  | 11,320  |              |              |  |     |  |         |              | 698     |   |               |  | 1,998  |                 |             |  | 12,018     |  |          |   | 14,016   |  |  |  | (1,499  | ) |  | 1975/1989        |  | 07/02/01 |  |  | 40 | 
| |  | Redstone Plaza                            |  |       | (3)    |  |          | Newport Beach    |         |              | CA |              |         |               |             |                   |                 |              | 7,000                   |              |       |  | 29,054  |              |              |  |     |  |         |              | 461     |   |               |  | 7,000  |                 |             |  | 29,515     |  |          |   | 36,515   |  |  |  | (2,987  | ) |  | 1976/1995        |  | 09/23/04 |  |  | 35 | 
| |  | The City  3800 Chapman                   |  |       |        |  |          | Orange           |         |              | CA |              |         |               |             |                   |                 |              | 3,019                   |              |       |  | 17,107  |              |              |  |     |  |         |              | 431     |   |               |  | 3,019  |                 |             |  | 17,538     |  |          |   | 20,557   |  |  |  | (1,952  | ) |  | 1984             |  | 07/02/01 |  |  | 40 | 
| |  | 500 Orange Tower                          |  |       |        |  |          | Orange           |         |              | CA |              |         |               |             |                   |                 |              | 2,943                   |              |       |  | 32,610  |              |              |  |     |  |         |              | 4,354   |   |               |  | 2,943  |                 |             |  | 36,964     |  |          |   | 39,907   |  |  |  | (8,455  | ) |  | 1988             |  | 01/01/01 |  |  | 40 | 
| |  | 500600 City Parkway                      |  |       |        |  |          | Orange           |         |              | CA |              |         |               |             |                   |                 |              | 7,296                   |              |       |  | 41,342  |              |              |  |     |  |         |              | 18,107  |   |               |  | 7,296  |                 |             |  | 59,449     |  |          |   | 66,745   |  |  |  | (10,273 | ) |  | 1974, 1978, 1998 |  | 07/02/01 |  |  | 40 | 
| |  | City Plaza                                |  |       |        |  |          | Orange           |         |              | CA |              |         |               |             |                   |                 |              | 6,809                   |              |       |  | 38,584  |              |              |  |     |  |         |              | 6,738   |   |               |  | 6,809  |                 |             |  | 45,322     |  |          |   | 52,131   |  |  |  | (6,577  | ) |  | 1970             |  | 07/02/01 |  |  | 40 | 
| |  | City Tower                                |  |       |        |  |          | Orange           |         |              | CA |              |         |               |             |                   |                 |              | 10,440                  |              |       |  | 59,160  |              |              |  |     |  |         |              | 4,310   |   |               |  | 10,440 |                 |             |  | 63,470     |  |          |   | 73,910   |  |  |  | (7,917  | ) |  | 1988             |  | 07/02/01 |  |  | 40 | 
| |  | 1100 Executive Tower                      |  |       |        |  |          | Orange           |         |              | CA |              |         |               |             |                   |                 |              | 4,622                   |              |       |  | 41,599  |              |              |  |     |  |         |              | 5,900   |   |               |  | 4,622  |                 |             |  | 47,499     |  |          |   | 52,121   |  |  |  | (10,544 | ) |  | 1987             |  | 12/15/94 |  |  | 40 | 
| |  | 3280 E. Foothill Boulevard                |  |       |        |  |          | Pasadena         |         |              | CA |              |         |               |             |                   |                 |              | 3,396                   |              |       |  | 19,246  |              |              |  |     |  |         |              | 1,800   |   |               |  | 3,396  |                 |             |  | 21,046     |  |          |   | 24,442   |  |  |  | (2,745  | ) |  | 1982             |  | 07/02/01 |  |  | 40 | 
| |  | 790 Colorado                              |  |       |        |  |          | Pasadena         |         |              | CA |              |         |               |             |                   |                 |              | 2,355                   |              |       |  | 13,343  |              |              |  |     |  |         |              | 2,882   |   |               |  | 2,355  |                 |             |  | 16,225     |  |          |   | 18,580   |  |  |  | (2,293  | ) |  | 1981             |  | 07/02/01 |  |  | 40 | 
| |  | Century Square                            |  |       |        |  |          | Pasadena         |         |              | CA |              |         |               |             |                   |                 |              | 6,787                   |              |       |  | 38,457  |              |              |  |     |  |         |              | 534     |   |               |  | 6,787  |                 |             |  | 38,991     |  |          |   | 45,778   |  |  |  | (4,351  | ) |  | 1984             |  | 07/02/01 |  |  | 40 | 
| |  | Pasadena Financial                        |  |       |        |  |          | Pasadena         |         |              | CA |              |         |               |             |                   |                 |              | 4,779                   |              |       |  | 27,084  |              |              |  |     |  |         |              | 1,219   |   |               |  | 4,779  |                 |             |  | 28,303     |  |          |   | 33,082   |  |  |  | (3,300  | ) |  | 1984/1996        |  | 07/02/01 |  |  | 40 | 
| |  | Centerside II                             |  |       |        |  |          | San Diego        |         |              | CA |              |         |               | 21,179       |                   |                 |              | 5,777                   |              |       |  | 32,737  |              |              |  |     |  |         |              | 5,117   |   |               |  | 5,777  |                 |             |  | 37,854     |  |          |   | 43,631   |  |  |  | (5,797  | ) |  | 1987             |  | 06/19/00 |  |  | 40 | 
| |  | La Jolla Centre I & II                    |  |       |        |  |          | San Diego        |         |              | CA |              |         |               |             |                   |                 |              | 12,904                  |              |       |  | 73,122  |              |              |  |     |  |         |              | 4,196   |   |               |  | 12,904 |                 |             |  | 77,318     |  |          |   | 90,222   |  |  |  | (9,924  | ) |  | 1986-1989        |  | 07/02/01 |  |  | 40 | 
| |  | La Jolla Executive Tower                  |  |       | (3)    |  |          | San Diego        |         |              | CA |              |         |               |             |                   |                 |              | 10,200                  |              |       |  | 60,376  |              |              |  |     |  |         |              | 893     |   |               |  | 10,200 |                 |             |  | 61,269     |  |          |   | 71,469   |  |  |  | (3,255  | ) |  | 1990             |  | 11/17/04 |  |  | 39 | 
| |  | Nobel Corporate Plaza                     |  |       |        |  |          | San Diego        |         |              | CA |              |         |               |             |                   |                 |              | 3,697                   |              |       |  | 20,948  |              |              |  |     |  |         |              | 1,227   |   |               |  | 3,697  |                 |             |  | 22,175     |  |          |   | 25,872   |  |  |  | (2,664  | ) |  | 1985             |  | 07/02/01 |  |  | 40 | 
| |  | Pacific Corporate Plaza                   |  |       |        |  |          | San Diego        |         |              | CA |              |         |               |             |                   |                 |              | 2,100                   |              |       |  | 11,900  |              |              |  |     |  |         |              | 658     |   |               |  | 2,100  |                 |             |  | 12,558     |  |          |   | 14,658   |  |  |  | (1,347  | ) |  | 1988             |  | 07/02/01 |  |  | 40 | 

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##### Table of Contents





| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |           |  |          |  |  |       | 
| |  | ----------------------------- |  | ----- | ------- |  | -------- | ------------ | ------- | ------------ | -- | ------------ | ------- | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ---- |  | ------- | ------------ | ------------ |  | ---- |  | ------- | ------------ | ------ | - | ------------- |  | ------- | --------------- | ----------- |  | ---------- |  | -------- | - | -------- |  |  |  | ------- | - |  | --------- |  | -------- |  |  | ----- | 
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |      |  |         |              |              |  |      |  |         |             
| |  |                               |  |       |         |  |          |              |         |              |    |              |         | Subsequent to |              |                   | Close of Period |              |                         |              |      |  |         |              |              |  |      | 
| |  |                               |  |       |         |  |          |              |         |              |    | Initial Cost |         |               | Acquisition  |                   |                 | 12/31/05     |                         |              |      |  |         |              |              |  |      |  |        
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              | Date of      |  |      |  |        
| |  |                               |  |       |         |  |          |              |         | Encumbrances |    |              |         |               | Building and |                   |                 |              |                         | Building and |      |  |         |              | Building and |  |      |  |         | Accumulated  |        |   | Construction/ |  | Date    |                 | Depreciable | 
| |  | Description                   |  | Notes |         |  | Location |              | State   |              |    | at 12/31/05  |         |               | Land         |                   |                 | Improvements |                         |              | Land |  |         | Improvements |              |  | Land |  |         | Improvements |        |   | Total(1)      |  |         | Depreciation(1) |             |  | Renovation |  | Acquired |   | Lives(2) | 
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |            |  |          |   |          | 
| |  | Park Plaza                    |  |       |         |  |          | San Diego    |         |              | CA |              |         |               |             |                   |                 |              | 2,203                   |              |      |  | 12,484  |              |              |  |     |  |         |              | 808    |   |               |  | 2,203   |                 |             |  | 13,292     |  |          |   | 15,495   |  |  |  | (1,553  | ) |  | 1982      |  | 07/02/01 |  |  | 40    | 
| |  | Westridge                     |  |       |         |  |          | San Diego    |         |              | CA |              |         |               |             |                   |                 |              | 1,500                   |              |      |  | 8,500   |              |              |  |     |  |         |              |       |   |               |  | 1,500   |                 |             |  | 8,500      |  |          |   | 10,000   |  |  |  | (947    | ) |  | 1980      |  | 07/02/01 |  |  | 40    | 
| |  | Smith Barney Tower            |  |       |         |  |          | San Diego    |         |              | CA |              |         |               |             |                   |                 |              | 2,658                   |              |      |  | 23,919  |              |              |  |     |  |         |              | 4,273  |   |               |  | 2,658   |                 |             |  | 28,192     |  |          |   | 30,850   |  |  |  | (7,476  | ) |  | 1987      |  | 04/28/97 |  |  | 40    | 
| |  | The Plaza at La Jolla Village |  |       |         |  |          | San Diego    |         |              | CA |              |         |               | 75,727       |                   |                 |              | 11,839                  |              |      |  | 98,243  |              |              |  | 19   |  |         |              | 5,954  |   |               |  | 11,858  |                 |             |  | 104,197    |  |          |   | 116,055  |  |  |  | (23,324 | ) |  | 1987-1990 |  | 03/10/94 |  |  | 40    | 
| |  | Griffin Towers                |  |       |         |  |          | Santa Ana    |         |              | CA |              |         |               |             |                   |                 |              | 14,317                  |              |      |  | 81,127  |              |              |  |     |  |         |              | 6,070  |   |               |  | 14,317  |                 |             |  | 87,197     |  |          |   | 101,514  |  |  |  | (9,246  | ) |  | 1987      |  | 07/02/01 |  |  | 40    | 
| |  | Lincoln Town Center           |  |       |         |  |          | Santa Ana    |         |              | CA |              |         |               |             |                   |                 |              | 4,403                   |              |      |  | 24,950  |              |              |  |     |  |         |              | 2,213  |   |               |  | 4,403   |                 |             |  | 27,163     |  |          |   | 31,566   |  |  |  | (4,295  | ) |  | 1987      |  | 06/19/00 |  |  | 40    | 
| |  | 2951 28th Street              |  |       |         |  |          | Santa Monica |         |              | CA |              |         |               |             |                   |                 |              | 3,612                   |              |      |  | 20,465  |              |              |  |     |  |         |              | 3,015  |   |               |  | 3,612   |                 |             |  | 23,480     |  |          |   | 27,092   |  |  |  | (2,918  | ) |  | 1971      |  | 07/02/01 |  |  | 40    | 
| |  | 429 Santa Monica              |  |       |         |  |          | Santa Monica |         |              | CA |              |         |               |             |                   |                 |              | 2,523                   |              |      |  | 14,298  |              |              |  |     |  |         |              | 1,264  |   |               |  | 2,523   |                 |             |  | 15,562     |  |          |   | 18,085   |  |  |  | (2,347  | ) |  | 1982      |  | 06/19/00 |  |  | 40    | 
| |  | Arboretum Courtyard           |  |       |         |  |          | Santa Monica |         |              | CA |              |         |               |             |                   |                 |              | 6,573                   |              |      |  | 37,245  |              |              |  |     |  |         |              | 1,533  |   |               |  | 6,573   |                 |             |  | 38,778     |  |          |   | 45,351   |  |  |  | (4,698  | ) |  | 1999      |  | 07/02/01 |  |  | 40    | 
| |  | Santa Monica Business Park    |  |       |         |  |          | Santa Monica |         |              | CA |              |         |               | 6,852        |                   |                 |              |                        |              |      |  | 242,155 |              |              |  |     |  |         |              | 12,638 |   |               |  |        |                 |             |  | 254,793    |  |          |   | 254,793  |  |  |  | (29,678 | ) |  | 1979-1981 |  | 07/02/01 |  |  | 40    | 
| |  | Searise Office Tower          |  |       |         |  |          | Santa Monica |         |              | CA |              |         |               |             |                   |                 |              | 4,380                   |              |      |  | 24,818  |              |              |  |     |  |         |              | 1,475  |   |               |  | 4,380   |                 |             |  | 26,293     |  |          |   | 30,673   |  |  |  | (3,922  | ) |  | 1975      |  | 06/19/00 |  |  | 40    | 
| |  | Wilshire Palisades            |  |       |         |  |          | Santa Monica |         |              | CA |              |         |               | 38,375       |                   |                 |              | 9,763                   |              |      |  | 55,323  |              |              |  |     |  |         |              | 2,733  |   |               |  | 9,763   |                 |             |  | 58,056     |  |          |   | 67,819   |  |  |  | (8,364  | ) |  | 1981      |  | 06/19/00 |  |  | 40    | 
| |  | Bixby Ranch                   |  |       |         |  |          | Seal Beach   |         |              | CA |              |         |               | 25,011       |                   |                 |              | 6,450                   |              |      |  | 36,550  |              |              |  |     |  |         |              | 3,307  |   |               |  | 6,450   |                 |             |  | 39,857     |  |          |   | 46,307   |  |  |  | (6,378  | ) |  | 1987      |  | 06/19/00 |  |  | 40    | 
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |            |  |          |   |          | 
| |  | Los Angeles Region Totals     |  |       |         |  |          |              | 388,860 |              |    |              | 341,765 |               |              |                   | 2,608,258       |              |                         |              | 19   |  |         |              | 253,890      |  |      |  | 341,784 |              |        |   | 2,862,148     |  |         |                 | 3,203,932   |  |            |  | (475,437 | ) |          |  |  |  |         |   |  |          
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |           
| |  | New York Region               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |           |  |          |  |  |       | 
| |  | 1301 Avenue of Americas       |  |       |         |  |          | New York     |         |              | NY |              |         |               | 486,605      |                   |                 |              | 151,285                 |              |      |  | 605,788 |              |              |  |     |  |         |              | 32,324 |   |               |  | 151,285 |                 |             |  | 638,112    |  |          |   | 789,397  |  |  |  | (82,694 | ) |  | 1963/1989 |  | 08/03/00 |  |  | 40    | 
| |  | 527 Madison Avenue            |  |       |         |  |          | New York     |         |              | NY |              |         |               |             |                   |                 |              | 9,155                   |              |      |  | 51,877  |              |              |  |     |  |         |              | 7,794  |   |               |  | 9,155   |                 |             |  | 59,671     |  |          |   | 68,826   |  |  |  | (8,709  | ) |  | 1986      |  | 06/19/00 |  |  | 40    | 
| |  | 717 Fifth Avenue              |  |       | (3) (8) |  |          | New York     |         |              | NY |              |         |               |             |                   |                 |              | 47,000                  |              |      |  | 115,058 |              |              |  |     |  |         |              | 1,366  |   |               |  | 47,000  |                 |             |  | 116,424    |  |          |   | 163,424  |  |  |  | (7,103  | ) |  | 1959      |  | 09/08/04 |  |  | 45    | 
| |  | 850 Third Avenue              |  |       | (9)     |  |          | New York     |         |              | NY |              |         |               | 490          |                   |                 |              | 9,606                   |              |      |  | 86,453  |              |              |  | 30   |  |         |              | 18,652 |   |               |  | 9,636   |                 |             |  | 105,105    |  |          |   | 114,741  |  |  |  | (21,753 | ) |  | 1960/1996 |  | 03/20/95 |  |  | 40    | 
| |  | Park Avenue Tower             |  |       | (9)     |  |          | New York     |         |              | NY |              |         |               | 180,000      |                   |                 |              | 48,976                  |              |      |  | 196,566 |              |              |  | 719  |  |         |              | 13,383 |   |               |  | 49,695  |                 |             |  | 209,949    |  |          |   | 259,644  |  |  |  | (41,040 | ) |  | 1986      |  | 07/15/98 |  |  | 40    | 
| |  | Tower 56                      |  |       |         |  |          | New York     |         |              | NY |              |         |               | 21,712       |                   |                 |              | 6,853                   |              |      |  | 38,832  |              |              |  |     |  |         |              | 5,108  |   |               |  | 6,853   |                 |             |  | 43,940     |  |          |   | 50,793   |  |  |  | (6,587  | ) |  | 1983      |  | 06/19/00 |  |  | 40    | 
| |  | WorldWide Plaza               |  |       |         |  |          | New York     |         |              | NY |              |         |               |             |                   |                 |              | 124,919                 |              |      |  | 496,665 |              |              |  |     |  |         |              | 10,475 |   |               |  | 124,919 |                 |             |  | 507,140    |  |          |   | 632,059  |  |  |  | (91,216 | ) |  | 1989      |  | 10/01/98 |  |  | 40    | 
| |  | 177 Broad Street              |  |       |         |  |          | Stamford     |         |              | CT |              |         |               |             |                   |                 |              | 2,562                   |              |      |  | 23,056  |              |              |  |     |  |         |              | 2,762  |   |               |  | 2,562   |                 |             |  | 25,818     |  |          |   | 28,380   |  |  |  | (5,659  | ) |  | 1989      |  | 01/29/97 |  |  | 40    | 
| |  | 300 Atlantic Street           |  |       |         |  |          | Stamford     |         |              | CT |              |         |               |             |                   |                 |              | 4,632                   |              |      |  | 41,691  |              |              |  |     |  |         |              | 3,773  |   |               |  | 4,632   |                 |             |  | 45,464     |  |          |   | 50,096   |  |  |  | (10,466 | ) |  | 1987/1996 |  | 03/30/93 |  |  | 40    | 
| |  | Canterbury Green              |  |       | (10)    |  |          | Stamford     |         |              | CT |              |         |               |             |                   |                 |              |                        |              |      |  | 41,987  |              |              |  | 92   |  |         |              | 2,258  |   |               |  | 92      |                 |             |  | 44,245     |  |          |   | 44,337   |  |  |  | (10,227 | ) |  | 1987      |  | 12/15/92 |  |  | 40    | 
| |  | Four Stamford Plaza           |  |       |         |  |          | Stamford     |         |              | CT |              |         |               |             |                   |                 |              | 4,471                   |              |      |  | 40,238  |              |              |  | 24   |  |         |              | 2,453  |   |               |  | 4,495   |                 |             |  | 42,691     |  |          |   | 47,186   |  |  |  | (9,152  | ) |  | 1979/1994 |  | 08/31/94 |  |  | 40    | 
| |  | One and Two Stamford Plaza    |  |       |         |  |          | Stamford     |         |              | CT |              |         |               |             |                   |                 |              | 8,268                   |              |      |  | 74,409  |              |              |  |     |  |         |              | 9,107  |   |               |  | 8,268   |                 |             |  | 83,516     |  |          |   | 91,784   |  |  |  | (20,135 | ) |  | 1986/1994 |  | 03/30/93 |  |  | 40    | 
| |  | Three Stamford Plaza          |  |       |         |  |          | Stamford     |         |              | CT |              |         |               |             |                   |                 |              | 3,957                   |              |      |  | 35,610  |              |              |  |     |  |         |              | 3,319  |   |               |  | 3,957   |                 |             |  | 38,929     |  |          |   | 42,886   |  |  |  | (8,358  | ) |  | 1980/1994 |  | 12/15/92 |  |  | 40    | 
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |            |  |          |   |          | 
| |  | New York Region Totals        |  |       |         |  |          |              | 688,807 |              |    |              | 421,684 |               |              |                   | 1,848,230       |              |                         |              | 865  |  |         |              | 112,774      |  |      |  | 422,549 |              |        |   | 1,961,004     |  |         |                 | 2,383,553   |  |            |  | (323,099 | ) |          |  |  |  |         |   |  |          
| |  |                               |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |           
| |  | San Francisco Region          |  |       |         |  |          |              |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |  |         |              |        |   |               |  |         |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |           |  |          |  |  |       | 
| |  | Golden Bear Center            |  |       |         |  |          | Berkeley     |         |              | CA |              |         |               | 17,880       |                   |                 |              | 4,500                   |              |      |  | 25,500  |              |              |  |     |  |         |              | 1,545  |   |               |  | 4,500   |                 |             |  | 27,045     |  |          |   | 31,545   |  |  |  | (4,024  | ) |  | 1986      |  | 06/19/00 |  |  | 40    | 
| |  | Bay Park Plaza I & II         |  |       |         |  |          | Burlingame   |         |              | CA |              |         |               |             |                   |                 |              | 12,906                  |              |      |  | 73,133  |              |              |  |     |  |         |              | 2,710  |   |               |  | 12,906  |                 |             |  | 75,843     |  |          |   | 88,749   |  |  |  | (10,798 | ) |  | 1985/1998 |  | 06/19/00 |  |  | 40    | 
| |  | One Bay Plaza                 |  |       |         |  |          | Burlingame   |         |              | CA |              |         |               |             |                   |                 |              | 8,642                   |              |      |  | 48,973  |              |              |  |     |  |         |              | 3,196  |   |               |  | 8,642   |                 |             |  | 52,169     |  |          |   | 60,811   |  |  |  | (7,836  | ) |  | 1979      |  | 06/19/00 |  |  | 40    | 
| |  | Pruneyard Office Towers       |  |       |         |  |          | Campbell     |         |              | CA |              |         |               |             |                   |                 |              | 16,502                  |              |      |  | 154,783 |              |              |  |     |  |         |              | 10,121 |   |               |  | 16,502  |                 |             |  | 164,904    |  |          |   | 181,406  |  |  |  | (23,906 | ) |  | 1971/1999 |  | 06/19/00 |  |  | 40    | 
| |  | One & Two Corporate Center    |  |       |         |  |          | Concord      |         |              | CA |              |         |               |             |                   |                 |              | 6,379                   |              |      |  | 36,146  |              |              |  |     |  |         |              | 3,876  |   |               |  | 6,379   |                 |             |  | 40,022     |  |          |   | 46,401   |  |  |  | (6,370  | ) |  | 1985-1987 |  | 06/19/00 |  |  | 40    | 
| |  | Watergate Office Towers       |  |       |         |  |          | Emeryville   |         |              | CA |              |         |               |             |                   |                 |              | 44,901                  |              |      |  | 254,441 |              |              |  |     |  |         |              | 11,125 |   |               |  | 44,901  |                 |             |  | 265,566    |  |          |   | 310,467  |  |  |  | (31,004 | ) |  | 1973/2001 |  | 07/02/01 |  |  | 40    | 
| |  | Metro Center                  |  |       |         |  |          | Foster City  |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 282,329 |              |              |  |     |  |         |              | 10,422 |   |               |  |        |                 |             |  | 292,751    |  |          |   | 292,751  |  |  |  | (33,661 | ) |  | 1985-1988 |  | 07/02/01 |  |  | 40    | 
| |  | Drakes Landing               |  |       |         |  |          | Larkspur     |         |              | CA |              |         |               |             |                   |                 |              | 5,735                   |              |      |  | 32,499  |              |              |  |     |  |         |              | 1,907  |   |               |  | 5,735   |                 |             |  | 34,406     |  |          |   | 40,141   |  |  |  | (4,370  | ) |  | 1986      |  | 07/02/01 |  |  | 40    | 
| |  | Larkspur Landing Office Park  |  |       |         |  |          | Larkspur     |         |              | CA |              |         |               |             |                   |                 |              | 8,316                   |              |      |  | 47,126  |              |              |  |     |  |         |              | 3,638  |   |               |  | 8,316   |                 |             |  | 50,764     |  |          |   | 59,080   |  |  |  | (6,351  | ) |  | 1981-1982 |  | 07/02/01 |  |  | 40    | 
| |  | Wood Island Office Complex    |  |       |         |  |          | Larkspur     |         |              | CA |              |         |               |             |                   |                 |              | 3,735                   |              |      |  | 21,163  |              |              |  |     |  |         |              | 645    |   |               |  | 3,735   |                 |             |  | 21,808     |  |          |   | 25,543   |  |  |  | (2,521  | ) |  | 1978      |  | 07/02/01 |  |  | 40    | 
| |  | 2180 Sand Hill Road           |  |       |         |  |          | Menlo Park   |         |              | CA |              |         |               |             |                   |                 |              | 3,408                   |              |      |  | 19,314  |              |              |  |     |  |         |              | 1,928  |   |               |  | 3,408   |                 |             |  | 21,242     |  |          |   | 24,650   |  |  |  | (2,669  | ) |  | 1976      |  | 07/02/01 |  |  | 40    | 
| |  | 1900 McCarthy                 |  |       |         |  |          | Milpitas     |         |              | CA |              |         |               |             |                   |                 |              | 1,998                   |              |      |  | 11,319  |              |              |  |     |  |         |              | 736    |   |               |  | 1,998   |                 |             |  | 12,055     |  |          |   | 14,053   |  |  |  | (1,458  | ) |  | 1984      |  | 07/02/01 |  |  | 40    | 
| |  | California Circle II          |  |       | (4)     |  |          | Milpitas     |         |              | CA |              |         |               |             |                   |                 |              | 1,764                   |              |      |  | 9,997   |              |              |  |     |  |         |              | (1,471 | ) |               |  | 1,764   |                 |             |  | 8,526      |  |          |   | 10,290   |  |  |  | (148    | ) |  | 1984      |  | 07/02/01 |  |  | 40    | 
| |  | Shoreline Office Center       |  |       | (3)     |  |          | Mill Valley  |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 19,218  |              |              |  |     |  |         |              | 2,237  |   |               |  |        |                 |             |  | 21,455     |  |          |   | 21,455   |  |  |  | (1,666  | ) |  | 1985      |  | 12/14/04 |  |  | 40    | 
| |  | Golden Gate Plaza             |  |       | (3)     |  |          | Novato       |         |              | CA |              |         |               |             |                   |                 |              | 3,687                   |              |      |  | 20,851  |              |              |  |     |  |         |              |       |   |               |  | 3,687   |                 |             |  | 20,851     |  |          |   | 24,538   |  |  |  | (514    | ) |  | 1994      |  | 06/30/05 |  |  | 45    | 
| |  | Woodside Office Center        |  |       | (3)     |  |          | Novato       |         |              | CA |              |         |               |             |                   |                 |              | 3,072                   |              |      |  | 19,916  |              |              |  |     |  |         |              | 829    |   |               |  | 3,072   |                 |             |  | 20,745     |  |          |   | 23,817   |  |  |  | (384    | ) |  | 2003      |  | 06/30/05 |  |  | 57    | 
| |  | Clocktower Square             |  |       | (3)     |  |          | Palo Alto    |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 41,279  |              |              |  |     |  |         |              | 33     |   |               |  |        |                 |             |  | 41,312     |  |          |   | 41,312   |  |  |  | (452    | ) |  | 1967-1983 |  | 09/27/05 |  |  | 44    | 
| |  | Embarcadero Place             |  |       |         |  |          | Palo Alto    |         |              | CA |              |         |               | 33,237       |                   |                 |              | 10,500                  |              |      |  | 59,500  |              |              |  |     |  |         |              | 4,833  |   |               |  | 10,500  |                 |             |  | 64,333     |  |          |   | 74,833   |  |  |  | (9,053  | ) |  | 1984      |  | 06/19/00 |  |  | 40    | 
| |  | Foothill Research Center      |  |       |         |  |          | Palo Alto    |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 104,894 |              |              |  |     |  |         |              | 60     |   |               |  |        |                 |             |  | 104,954    |  |          |   | 104,954  |  |  |  | (12,315 | ) |  | 1991      |  | 07/02/01 |  |  | 40    | 
| |  | Lockheed                      |  |       |         |  |          | Palo Alto    |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 27,712  |              |              |  |     |  |         |              | 70     |   |               |  |        |                 |             |  | 27,782     |  |          |   | 27,782   |  |  |  | (3,188  | ) |  | 1991      |  | 07/02/01 |  |  | 40    | 
| |  | Palo Alto Square              |  |       |         |  |          | Palo Alto    |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 78,143  |              |              |  | 161  |  |         |              | 8,416  |   |               |  | 161     |                 |             |  | 86,559     |  |          |   | 86,720   |  |  |  | (21,152 | ) |  | 1971/1985 |  | 10/01/99 |  |  | 23    | 
| |  | Xerox Campus                  |  |       |         |  |          | Palo Alto    |         |              | CA |              |         |               |             |                   |                 |              |                        |              |      |  | 132,810 |              |              |  |     |  |         |              | 2      |   |               |  |        |                 |             |  | 132,812    |  |          |   | 132,812  |  |  |  | (15,182 | ) |  | 1991      |  | 07/02/01 |  |  | 40    | 
| |  | 1179 North McDowell           |  |       | (3)     |  |          | Petaluma     |         |              | CA |              |         |               |             |                   |                 |              | 1,585                   |              |      |  | 7,638   |              |              |  |     |  |         |              |       |   |               |  | 1,585   |                 |             |  | 7,638      |  |          |   | 9,223    |  |  |  | (253    | ) |  | 1983      |  | 06/30/05 |  |  | 38    | 
| |  | Redwood Business Park I       |  |       | (3)     |  |          | Petaluma     |         |              | CA |              |         |               | 11,395       |                   |                 |              | 2,616                   |              |      |  | 15,034  |              |              |  |     |  |         |              | 1      |   |               |  | 2,616   |                 |             |  | 15,035     |  |          |   | 17,651   |  |  |  | (55     | ) |  | 1985-1988 |  | 10/28/05 |  |  | 35-49 | 
| |  | Redwood Business Park II      |  |       | (3)     |  |          | Petaluma     |         |              | CA |              |         |               | 19,991       |                   |                 |              | 4,254                   |              |      |  | 27,621  |              |              |  |     |  |         |              |       |   |               |  | 4,254   |                 |             |  | 27,621     |  |          |   | 31,875   |  |  |  | (100    | ) |  | 1989-2000 |  | 10/28/05 |  |  | 34-51 | 
| |  | Redwood Business Park III     |  |       | (3)     |  |          | Petaluma     |         |              | CA |              |         |               | 16,528       |                   |                 |              | 995                     |              |      |  | 27,407  |              |              |  |     |  |         |              |       |   |               |  | 995     |                 |             |  | 27,407     |  |          |   | 28,402   |  |  |  | (83     | ) |  | 1995      |  | 11/02/05 |  |  | 50    | 
| |  | Redwood Business Park IV      |  |       | (3)     |  |          | Petaluma     |         |              | CA |              |         |               | 8,950        |                   |                 |              | 300                     |              |      |  | 14,392  |              |              |  |     |  |         |              |       |   |               |  | 300     |                 |             |  | 14,392     |  |          |   | 14,692   |  |  |  | (43     | ) |  | 2000      |  | 11/02/05 |  |  | 53    | 

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##### Table of Contents





| |  |                                    |  |       |     |  |          |                |       |              |    |              |  |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |  |              |         |   |               |  |        |                 |             |  |            |  |          |  |          |  |  |  |         |   |  |                |  |          |  |  |    | 
| |  | ---------------------------------- |  | ----- | --- |  | -------- | -------------- | ----- | ------------ | -- | ------------ |  | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ---- |  | ------- | ------------ | ------------ |  | ---- | - |  | ------------ | ------- | - | ------------- |  | ------ | --------------- | ----------- |  | ---------- |  | -------- |  | -------- |  |  |  | ------- | - |  | -------------- |  | -------- |  |  | -- | 
| |  |                                    |  |       |     |  |          |                |       |              |    |              |  |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |      |  |         |              |              |  |      |   |  |             
| |  |                                    |  |       |     |  |          |                |       |              |    |              |  | Subsequent to |              |                   | Close of Period |              |                         |              |      |  |         |              |              |  |      |  
| |  |                                    |  |       |     |  |          |                |       |              |    | Initial Cost |  |               | Acquisition  |                   |                 | 12/31/05     |                         |              |      |  |         |              |              |  |      |   | 
| |  |                                    |  |       |     |  |          |                |       |              |    |              |  |               |              |                   |                 |              |                         |              |      |  |         |              | Date of      |  |      |   | 
| |  |                                    |  |       |     |  |          |                |       | Encumbrances |    |              |  |               | Building and |                   |                 |              |                         | Building and |      |  |         |              | Building and |  |      |   |  | Accumulated  |         |   | Construction/ |  | Date   |                 | Depreciable | 
| |  | Description                        |  | Notes |     |  | Location |                | State |              |    | at 12/31/05  |  |               | Land         |                   |                 | Improvements |                         |              | Land |  |         | Improvements |              |  | Land |   |  | Improvements |         |   | Total(1)      |  |        | Depreciation(1) |             |  | Renovation |  | Acquired |  | Lives(2) | 
| |  |                                    |  |       |     |  |          |                |       |              |    |              |  |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |  |              |         |   |               |  |        |                 |             |  |            |  |          |  |          | 
| |  | Redwood Business Park V            |  |       | (3) |  |          | Petaluma       |       |              | CA |              |  |               | 7,069        |                   |                 |              | 701                     |              |      |  | 9,645   |              |              |  |     |   |  |              |        |   |               |  | 701    |                 |             |  | 9,645      |  |          |  | 10,346   |  |  |  | (32     | ) |  | 1987           |  | 10/28/05 |  |  | 42 | 
| |  | Hacienda Terrace                   |  |       |     |  |          | Pleasanton     |       |              | CA |              |  |               |             |                   |                 |              | 7,039                   |              |      |  | 39,887  |              |              |  |     |   |  |              | 8,793   |   |               |  | 7,039  |                 |             |  | 48,680     |  |          |  | 55,719   |  |  |  | (7,765  | ) |  | 1984           |  | 06/19/00 |  |  | 40 | 
| |  | Shorebreeze I & II                 |  |       | (3) |  |          | Redwood City   |       |              | CA |              |  |               | 22,006       |                   |                 |              | 14,028                  |              |      |  | 41,970  |              |              |  |     |   |  |              | 666     |   |               |  | 14,028 |                 |             |  | 42,636     |  |          |  | 56,664   |  |  |  | (1,523  | ) |  | 1985-1986      |  | 06/09/05 |  |  | 35 | 
| |  | Towers at Shores Center            |  |       |     |  |          | Redwood City   |       |              | CA |              |  |               |             |                   |                 |              | 35,578                  |              |      |  | 69,054  |              |              |  |     |   |  |              | 13,436  |   |               |  | 35,578 |                 |             |  | 82,490     |  |          |  | 118,068  |  |  |  | (10,039 | ) |  | 2002           |  | 07/02/01 |  |  | 40 | 
| |  | 333 Twin Dolphin Plaza             |  |       | (3) |  |          | Redwood City   |       |              | CA |              |  |               |             |                   |                 |              | 12,054                  |              |      |  | 40,719  |              |              |  |     |   |  |              | 73      |   |               |  | 12,054 |                 |             |  | 40,792     |  |          |  | 52,846   |  |  |  | (1,420  | ) |  | 1985           |  | 07/28/05 |  |  | 48 | 
| |  | 555 Twin Dolphin Plaza             |  |       |     |  |          | Redwood Shores |       |              | CA |              |  |               |             |                   |                 |              | 11,790                  |              |      |  | 66,810  |              |              |  |     |   |  |              | 3,565   |   |               |  | 11,790 |                 |             |  | 70,375     |  |          |  | 82,165   |  |  |  | (8,816  | ) |  | 1989           |  | 07/02/01 |  |  | 40 | 
| |  | Douglas Corporate Center           |  |       |     |  |          | Roseville      |       |              | CA |              |  |               |             |                   |                 |              | 2,391                   |              |      |  | 13,550  |              |              |  |     |   |  |              | 640     |   |               |  | 2,391  |                 |             |  | 14,190     |  |          |  | 16,581   |  |  |  | (1,620  | ) |  | 1990           |  | 07/02/01 |  |  | 40 | 
| |  | Douglas Corporate Center II        |  |       |     |  |          | Roseville      |       |              | CA |              |  |               |             |                   |                 |              | 1,700                   |              |      |  | 10,962  |              |              |  |     |   |  |              | 3,349   |   |               |  | 1,700  |                 |             |  | 14,311     |  |          |  | 16,011   |  |  |  | (1,252  | ) |  | 2004           |  | 07/02/01 |  |  | 40 | 
| |  | Johnson Ranch Corp Centre I & II   |  |       |     |  |          | Roseville      |       |              | CA |              |  |               |             |                   |                 |              | 4,380                   |              |      |  | 24,819  |              |              |  |     |   |  |              | 694     |   |               |  | 4,380  |                 |             |  | 25,513     |  |          |  | 29,893   |  |  |  | (2,940  | ) |  | 1990-1998      |  | 07/02/01 |  |  | 40 | 
| |  | Olympus Corporate Centre           |  |       | (3) |  |          | Roseville      |       |              | CA |              |  |               |             |                   |                 |              | 7,510                   |              |      |  | 30,457  |              |              |  |     |   |  |              | 523     |   |               |  | 7,510  |                 |             |  | 30,980     |  |          |  | 38,490   |  |  |  | (2,605  | ) |  | 1992-1996      |  | 09/22/04 |  |  | 40 | 
| |  | Roseville Corporate Center         |  |       |     |  |          | Roseville      |       |              | CA |              |  |               |             |                   |                 |              | 3,008                   |              |      |  | 17,046  |              |              |  |     |   |  |              | 85      |   |               |  | 3,008  |                 |             |  | 17,131     |  |          |  | 20,139   |  |  |  | (1,920  | ) |  | 1999           |  | 07/02/01 |  |  | 40 | 
| |  | Summit at Douglas Ridge I          |  |       | (3) |  |          | Roseville      |       |              | CA |              |  |               |             |                   |                 |              | 2,937                   |              |      |  | 23,444  |              |              |  |     |   |  |              | (1,087  | ) |               |  | 2,937  |                 |             |  | 22,357     |  |          |  | 25,294   |  |  |  | (1,392  | ) |  | 2003           |  | 01/21/05 |  |  | 59 | 
| |  | 3600-3620 American River Drive     |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 2,209                   |              |      |  | 12,518  |              |              |  |     |   |  |              | 2,169   |   |               |  | 2,209  |                 |             |  | 14,687     |  |          |  | 16,896   |  |  |  | (1,702  | ) |  | 1977-1979/1997 |  | 07/02/01 |  |  | 40 | 
| |  | 455 University Avenue              |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 465                     |              |      |  | 2,634   |              |              |  |     |   |  |              | 245     |   |               |  | 465    |                 |             |  | 2,879      |  |          |  | 3,344    |  |  |  | (381    | ) |  | 1973           |  | 07/02/01 |  |  | 40 | 
| |  | 555 University Avenue              |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 939                     |              |      |  | 5,323   |              |              |  |     |   |  |              | 624     |   |               |  | 939    |                 |             |  | 5,947      |  |          |  | 6,886    |  |  |  | (675    | ) |  | 1974           |  | 07/02/01 |  |  | 40 | 
| |  | 575 & 601 University Avenue        |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 1,159                   |              |      |  | 6,569   |              |              |  |     |   |  |              | 1,146   |   |               |  | 1,159  |                 |             |  | 7,715      |  |          |  | 8,874    |  |  |  | (928    | ) |  | 1977           |  | 07/02/01 |  |  | 40 | 
| |  | 655 University Avenue              |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 672                     |              |      |  | 3,806   |              |              |  |     |   |  |              | 589     |   |               |  | 672    |                 |             |  | 4,395      |  |          |  | 5,067    |  |  |  | (605    | ) |  | 1979           |  | 07/02/01 |  |  | 40 | 
| |  | 701 University Avenue              |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 934                     |              |      |  | 5,294   |              |              |  |     |   |  |              | 249     |   |               |  | 934    |                 |             |  | 5,543      |  |          |  | 6,477    |  |  |  | (694    | ) |  | 1990           |  | 07/02/01 |  |  | 40 | 
| |  | 740 University Avenue              |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 212                     |              |      |  | 1,199   |              |              |  |     |   |  |              | 64      |   |               |  | 212    |                 |             |  | 1,263      |  |          |  | 1,475    |  |  |  | (155    | ) |  | 1973           |  | 07/02/01 |  |  | 40 | 
| |  | Exposition Centre                  |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 1,200                   |              |      |  | 7,800   |              |              |  |     |   |  |              | 499     |   |               |  | 1,200  |                 |             |  | 8,299      |  |          |  | 9,499    |  |  |  | (1,352  | ) |  | 1984           |  | 06/19/00 |  |  | 40 | 
| |  | Gateway Oaks I                     |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 2,391                   |              |      |  | 13,546  |              |              |  |     |   |  |              | 1,151   |   |               |  | 2,391  |                 |             |  | 14,697     |  |          |  | 17,088   |  |  |  | (1,725  | ) |  | 1990           |  | 07/02/01 |  |  | 40 | 
| |  | Gateway Oaks II                    |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 1,341                   |              |      |  | 7,600   |              |              |  |     |   |  |              | 514     |   |               |  | 1,341  |                 |             |  | 8,114      |  |          |  | 9,455    |  |  |  | (1,040  | ) |  | 1992           |  | 07/02/01 |  |  | 40 | 
| |  | Gateway Oaks III                   |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 936                     |              |      |  | 5,305   |              |              |  |     |   |  |              | 357     |   |               |  | 936    |                 |             |  | 5,662      |  |          |  | 6,598    |  |  |  | (676    | ) |  | 1996           |  | 07/02/01 |  |  | 40 | 
| |  | Gateway Oaks IV                    |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 1,658                   |              |      |  | 9,395   |              |              |  |     |   |  |              | 499     |   |               |  | 1,658  |                 |             |  | 9,894      |  |          |  | 11,552   |  |  |  | (1,147  | ) |  | 1998           |  | 07/02/01 |  |  | 40 | 
| |  | Point West Commercentre            |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 2,321                   |              |      |  | 13,154  |              |              |  |     |   |  |              | 1,362   |   |               |  | 2,321  |                 |             |  | 14,516     |  |          |  | 16,837   |  |  |  | (1,958  | ) |  | 1983           |  | 07/02/01 |  |  | 40 | 
| |  | Point West Corporate Center I & II |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 3,653                   |              |      |  | 14,779  |              |              |  |     |   |  |              | 1,507   |   |               |  | 3,653  |                 |             |  | 16,286     |  |          |  | 19,939   |  |  |  | (1,991  | ) |  | 1984           |  | 07/02/01 |  |  | 40 | 
| |  | Wells Fargo Center                 |  |       |     |  |          | Sacramento     |       |              | CA |              |  |               |             |                   |                 |              | 17,819                  |              |      |  | 100,975 |              |              |  |     |   |  |              | 3,958   |   |               |  | 17,819 |                 |             |  | 104,933    |  |          |  | 122,752  |  |  |  | (15,236 | ) |  | 1987           |  | 06/19/00 |  |  | 40 | 
| |  | Bayhill Office Center              |  |       |     |  |          | San Bruno      |       |              | CA |              |  |               | 85,242       |                   |                 |              | 24,010                  |              |      |  | 136,055 |              |              |  |     |   |  |              | 8,991   |   |               |  | 24,010 |                 |             |  | 145,046    |  |          |  | 169,056  |  |  |  | (20,537 | ) |  | 1982/1987      |  | 06/19/00 |  |  | 40 | 
| |  | Skyway Landing I & II              |  |       |     |  |          | San Carlos     |       |              | CA |              |  |               |             |                   |                 |              | 15,535                  |              |      |  | 35,994  |              |              |  |     |   |  |              | 18,658  |   |               |  | 15,535 |                 |             |  | 54,652     |  |          |  | 70,187   |  |  |  | (7,108  | ) |  | 2000           |  | 07/02/01 |  |  | 40 | 
| |  | 150 California                     |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               |             |                   |                 |              | 12,567                  |              |      |  | 46,184  |              |              |  |     |   |  |              | 6,976   |   |               |  | 12,567 |                 |             |  | 53,160     |  |          |  | 65,727   |  |  |  | (9,122  | ) |  | 2000           |  | 12/19/97 |  |  | 40 | 
| |  | 201 California                     |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               | 38,354       |                   |                 |              | 10,520                  |              |      |  | 59,611  |              |              |  |     |   |  |              | 9,924   |   |               |  | 10,520 |                 |             |  | 69,535     |  |          |  | 80,055   |  |  |  | (9,842  | ) |  | 1980           |  | 06/19/00 |  |  | 40 | 
| |  | 188 Embarcadero                    |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               | 13,682       |                   |                 |              | 4,108                   |              |      |  | 23,280  |              |              |  |     |   |  |              | 1,835   |   |               |  | 4,108  |                 |             |  | 25,115     |  |          |  | 29,223   |  |  |  | (3,747  | ) |  | 1985           |  | 06/19/00 |  |  | 40 | 
| |  | 60 Spear Street                    |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               |             |                   |                 |              | 2,125                   |              |      |  | 19,126  |              |              |  | 15   |   |  |              | 3,839   |   |               |  | 2,140  |                 |             |  | 22,965     |  |          |  | 25,105   |  |  |  | (5,179  | ) |  | 1967/1987      |  | 09/29/87 |  |  | 40 | 
| |  | Maritime Plaza                     |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               |             |                   |                 |              | 11,531                  |              |      |  | 103,776 |              |              |  |     |   |  |              | 24,599  |   |               |  | 11,531 |                 |             |  | 128,375    |  |          |  | 139,906  |  |  |  | (26,977 | ) |  | 1967/1990      |  | 04/21/97 |  |  | 40 | 
| |  | One Market                         |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               |             |                   |                 |              | 34,814                  |              |      |  | 313,330 |              |              |  |     |   |  |              | 50,951  |   |               |  | 34,814 |                 |             |  | 364,281    |  |          |  | 399,095  |  |  |  | (90,907 | ) |  | 1976/1995      |  | 11/22/94 |  |  | 40 | 
| |  | Ferry Building                     |  |       |     |  |          | San Francisco  |       |              | CA |              |  |               |             |                   |                 |              |                        |              |      |  | 94,652  |              |              |  |     |   |  |              | 17,592  |   |               |  |       |                 |             |  | 112,244    |  |          |  | 112,244  |  |  |  | (9,787  | ) |  | 1898/2002      |  | 06/19/00 |  |  | 40 | 
| |  | 10 Almaden                         |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 12,583                  |              |      |  | 71,303  |              |              |  |     |   |  |              | 2,981   |   |               |  | 12,583 |                 |             |  | 74,284     |  |          |  | 86,867   |  |  |  | (10,420 | ) |  | 1989           |  | 06/19/00 |  |  | 40 | 
| |  | 1740 Technology                    |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 8,766                   |              |      |  | 49,673  |              |              |  |     |   |  |              | 3,067   |   |               |  | 8,766  |                 |             |  | 52,740     |  |          |  | 61,506   |  |  |  | (6,353  | ) |  | 1986/1994      |  | 07/02/01 |  |  | 40 | 
| |  | 2290 North First Street            |  |       | (6) |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 2,431                   |              |      |  | 13,776  |              |              |  |     |   |  |              | (6,959  | ) |               |  | 2,431  |                 |             |  | 6,817      |  |          |  | 9,248    |  |  |  | (1,044  | ) |  | 1984           |  | 07/02/01 |  |  | 40 | 
| |  | Central Park Plaza                 |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 11,181                  |              |      |  | 63,358  |              |              |  | 23   |   |  |              | 4,668   |   |               |  | 11,204 |                 |             |  | 68,026     |  |          |  | 79,230   |  |  |  | (8,873  | ) |  | 1984-1985      |  | 07/02/01 |  |  | 40 | 
| |  | Metro Plaza                        |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 18,029                  |              |      |  | 102,164 |              |              |  |     |   |  |              | 7,165   |   |               |  | 18,029 |                 |             |  | 109,329    |  |          |  | 127,358  |  |  |  | (12,837 | ) |  | 1986-1987      |  | 07/02/01 |  |  | 40 | 
| |  | Skyport East and West              |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 6,779                   |              |      |  | 87,193  |              |              |  |     |   |  |              | 26,800  |   |               |  | 6,779  |                 |             |  | 113,993    |  |          |  | 120,772  |  |  |  | (16,386 | ) |  | 2001           |  | 07/02/01 |  |  | 40 | 
| |  | Concourse                          |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 49,279                  |              |      |  | 279,248 |              |              |  | (50  | ) |  |              | 6,713   |   |               |  | 49,229 |                 |             |  | 285,961    |  |          |  | 335,190  |  |  |  | (32,950 | ) |  | 1980/2000      |  | 07/02/01 |  |  | 40 | 
| |  | San Jose Gateway I                 |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 7,873                   |              |      |  | 44,616  |              |              |  |     |   |  |              | 3,994   |   |               |  | 7,873  |                 |             |  | 48,610     |  |          |  | 56,483   |  |  |  | (5,735  | ) |  | 1981           |  | 07/02/01 |  |  | 40 | 
| |  | San Jose Gateway II                |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 16,286                  |              |      |  | 92,288  |              |              |  |     |   |  |              | 5,144   |   |               |  | 16,286 |                 |             |  | 97,432     |  |          |  | 113,718  |  |  |  | (11,187 | ) |  | 1983-1984      |  | 07/02/01 |  |  | 40 | 
| |  | San Jose Gateway III               |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 6,409                   |              |      |  | 36,315  |              |              |  |     |   |  |              | 679     |   |               |  | 6,409  |                 |             |  | 36,994     |  |          |  | 43,403   |  |  |  | (4,172  | ) |  | 1998           |  | 07/02/01 |  |  | 40 | 
| |  | North First Office Center          |  |       |     |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 6,395                   |              |      |  | 36,239  |              |              |  |     |   |  |              | 989     |   |               |  | 6,395  |                 |             |  | 37,228     |  |          |  | 43,623   |  |  |  | (4,112  | ) |  | 1985-1986      |  | 07/02/01 |  |  | 40 | 
| |  | 225 West Santa Clara Street        |  |       | (3) |  |          | San Jose       |       |              | CA |              |  |               |             |                   |                 |              | 8,600                   |              |      |  | 94,035  |              |              |  |     |   |  |              | 1,286   |   |               |  | 8,600  |                 |             |  | 95,321     |  |          |  | 103,921  |  |  |  | (9,278  | ) |  | 2001           |  | 12/31/03 |  |  | 43 | 
| |  | Peninsula Office Park              |  |       |     |  |          | San Mateo      |       |              | CA |              |  |               | 76,760       |                   |                 |              | 27,275                  |              |      |  | 154,561 |              |              |  |     |   |  |              | 6,278   |   |               |  | 27,275 |                 |             |  | 160,839    |  |          |  | 188,114  |  |  |  | (23,014 | ) |  | 1971/1998      |  | 06/19/00 |  |  | 40 | 
| |  | San Mateo BayCenter I              |  |       |     |  |          | San Mateo      |       |              | CA |              |  |               |             |                   |                 |              | 5,382                   |              |      |  | 30,498  |              |              |  |     |   |  |              | 2,421   |   |               |  | 5,382  |                 |             |  | 32,919     |  |          |  | 38,301   |  |  |  | (3,965  | ) |  | 1984           |  | 07/02/01 |  |  | 40 | 
| |  | San Mateo BayCenter II             |  |       |     |  |          | San Mateo      |       |              | CA |              |  |               |             |                   |                 |              | 6,245                   |              |      |  | 35,389  |              |              |  |     |   |  |              | 2,423   |   |               |  | 6,245  |                 |             |  | 37,812     |  |          |  | 44,057   |  |  |  | (4,509  | ) |  | 1984           |  | 07/02/01 |  |  | 40 | 
| |  | San Mateo BayCenter III            |  |       |     |  |          | San Mateo      |       |              | CA |              |  |               |             |                   |                 |              | 3,357                   |              |      |  | 19,023  |              |              |  |     |   |  |              | 421     |   |               |  | 3,357  |                 |             |  | 19,444     |  |          |  | 22,801   |  |  |  | (2,245  | ) |  | 1987           |  | 07/02/01 |  |  | 40 | 
| |  | The Plaza at San Ramon             |  |       |     |  |          | San Ramon      |       |              | CA |              |  |               |             |                   |                 |              | 7,460                   |              |      |  | 42,273  |              |              |  |     |   |  |              | 9,435   |   |               |  | 7,460  |                 |             |  | 51,708     |  |          |  | 59,168   |  |  |  | (8,185  | ) |  | 1987-1989      |  | 06/19/00 |  |  | 40 | 
| |  | 2727 Augustine                     |  |       | (6) |  |          | Santa Clara    |       |              | CA |              |  |               |             |                   |                 |              | 3,000                   |              |      |  | 17,000  |              |              |  |     |   |  |              | (11,600 | ) |               |  | 3,000  |                 |             |  | 5,400      |  |          |  | 8,400    |  |  |  | (720    | ) |  | 1975           |  | 07/02/01 |  |  | 40 | 
| |  | 3281-3285 Scott Boulevard          |  |       | (6) |  |          | Santa Clara    |       |              | CA |              |  |               |             |                   |                 |              | 1,275                   |              |      |  | 7,225   |              |              |  |     |   |  |              | (3,390  | ) |               |  | 1,275  |                 |             |  | 3,835      |  |          |  | 5,110    |  |  |  | (473    | ) |  | 1981           |  | 07/02/01 |  |  | 40 | 
| |  | Applied Materials I & II           |  |       | (6) |  |          | Santa Clara    |       |              | CA |              |  |               |             |                   |                 |              | 5,100                   |              |      |  | 28,900  |              |              |  |     |   |  |              | (15,815 | ) |               |  | 5,100  |                 |             |  | 13,085     |  |          |  | 18,185   |  |  |  | (796    | ) |  | 1979           |  | 07/02/01 |  |  | 40 | 
| |  | Patrick Henry Drive                |  |       |     |  |          | Santa Clara    |       |              | CA |              |  |               |             |                   |                 |              | 2,475                   |              |      |  | 14,025  |              |              |  |     |   |  |              | 4       |   |               |  | 2,475  |                 |             |  | 14,029     |  |          |  | 16,504   |  |  |  | (1,564  | ) |  | 1981           |  | 07/02/01 |  |  | 40 | 
| |  | Santa Clara Office Center I        |  |       |     |  |          | Santa Clara    |       |              | CA |              |  |               |             |                   |                 |              | 2,010                   |              |      |  | 11,391  |              |              |  |     |   |  |              | 534     |   |               |  | 2,010  |                 |             |  | 11,925     |  |          |  | 13,935   |  |  |  | (1,398  | ) |  | 1981           |  | 07/02/01 |  |  | 40 | 
| |  | Santa Clara Office Center II       |  |       |     |  |          | Santa Clara    |       |              | CA |              |  |               |             |                   |                 |              | 2,870                   |              |      |  | 16,261  |              |              |  |     |   |  |              | 971     |   |               |  | 2,870  |                 |             |  | 17,232     |  |          |  | 20,102   |  |  |  | (1,978  | ) |  | 1978           |  | 07/02/01 |  |  | 40 | 

149



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##### Table of Contents





| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |         |              |        |   |               |  |        |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |                |  |          |  |  |       | 
| |  | ------------------------------------------------ |  | ----- | --- |  | -------- | ------------- | ------- | ------------ | -- | ------------ | ------- | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ---- |  | ------- | ------------ | ------------ |  | ---- | - | ------- | ------------ | ------ | - | ------------- |  | ------ | --------------- | ----------- |  | ---------- |  | -------- | - | -------- |  |  |  | ------- | - |  | -------------- |  | -------- |  |  | ----- | 
| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |      |  |         |              |              |  |      |   |         |             
| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         | Subsequent to |              |                   | Close of Period |              |                         |              |      |  |         |              |              |  |      |  
| |  |                                                  |  |       |     |  |          |               |         |              |    | Initial Cost |         |               | Acquisition  |                   |                 | 12/31/05     |                         |              |      |  |         |              |              |  |      |   |        
| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              | Date of      |  |      |   |        
| |  |                                                  |  |       |     |  |          |               |         | Encumbrances |    |              |         |               | Building and |                   |                 |              |                         | Building and |      |  |         |              | Building and |  |      |   |         | Accumulated  |        |   | Construction/ |  | Date   |                 | Depreciable | 
| |  | Description                                      |  | Notes |     |  | Location |               | State   |              |    | at 12/31/05  |         |               | Land         |                   |                 | Improvements |                         |              | Land |  |         | Improvements |              |  | Land |   |         | Improvements |        |   | Total(1)      |  |        | Depreciation(1) |             |  | Renovation |  | Acquired |   | Lives(2) | 
| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |         |              |        |   |               |  |        |                 |             |  |            |  |          |   |          | 
| |  | Santa Clara Office Center III                    |  |       |     |  |          | Santa Clara   |         |              | CA |              |         |               |             |                   |                 |              | 2,031                   |              |      |  | 11,509  |              |              |  |     |   |         |              | 574    |   |               |  | 2,031  |                 |             |  | 12,083     |  |          |   | 14,114   |  |  |  | (1,452  | ) |  | 1980           |  | 07/02/01 |  |  | 40    | 
| |  | Santa Clara Office Center IV                     |  |       |     |  |          | Santa Clara   |         |              | CA |              |         |               |             |                   |                 |              | 186                     |              |      |  | 1,057   |              |              |  |     |   |         |              |       |   |               |  | 186    |                 |             |  | 1,057      |  |          |   | 1,243    |  |  |  | (118    | ) |  | 1979           |  | 07/02/01 |  |  | 40    | 
| |  | Lake Marriott Business Park                      |  |       |     |  |          | Santa Clara   |         |              | CA |              |         |               |             |                   |                 |              | 9,091                   |              |      |  | 84,967  |              |              |  | 297  |   |         |              | 10,799 |   |               |  | 9,388  |                 |             |  | 95,766     |  |          |   | 105,154  |  |  |  | (18,888 | ) |  | 1981           |  | 12/19/97 |  |  | 40    | 
| |  | Fountaingrove Center                             |  |       |     |  |          | Santa Rosa    |         |              | CA |              |         |               |             |                   |                 |              | 2,898                   |              |      |  | 16,424  |              |              |  |     |   |         |              | 2,927  |   |               |  | 2,898  |                 |             |  | 19,351     |  |          |   | 22,249   |  |  |  | (2,251  | ) |  | 1986/1991      |  | 07/02/01 |  |  | 40    | 
| |  | Fountaingrove I                                  |  |       | (3) |  |          | Santa Rosa    |         |              | CA |              |         |               |             |                   |                 |              | 1,820                   |              |      |  | 8,106   |              |              |  |     |   |         |              |       |   |               |  | 1,820  |                 |             |  | 8,106      |  |          |   | 9,926    |  |  |  | (33     | ) |  | 2005           |  | 10/28/05 |  |  | 54    | 
| |  | Oak Valley Business Center                       |  |       | (3) |  |          | Santa Rosa    |         |              | CA |              |         |               |             |                   |                 |              | 3,871                   |              |      |  | 20,623  |              |              |  |     |   |         |              | 50     |   |               |  | 3,871  |                 |             |  | 20,673     |  |          |   | 24,544   |  |  |  | (518    | ) |  | 2001           |  | 06/30/05 |  |  | 50    | 
| |  | Parkpoint Business Center                        |  |       | (3) |  |          | Santa Rosa    |         |              | CA |              |         |               | 7,414        |                   |                 |              | 1,265                   |              |      |  | 10,099  |              |              |  |     |   |         |              |       |   |               |  | 1,265  |                 |             |  | 10,099     |  |          |   | 11,364   |  |  |  | (35     | ) |  | 1981           |  | 11/02/05 |  |  | 36    | 
| |  | Parkway Plaza (a.k.a. 3850 & 3880  Brickway)     |  |       | (3) |  |          | Santa Rosa    |         |              | CA |              |         |               |             |                   |                 |              | 3,791                   |              |      |  | 19,986  |              |              |  |     |   |         |              |       |   |               |  | 3,791  |                 |             |  | 19,986     |  |          |   | 23,777   |  |  |  | (381    | ) |  | 2000           |  | 06/30/05 |  |  | 55    | 
| |  | The Lakes                                        |  |       | (3) |  |          | Santa Rosa    |         |              | CA |              |         |               |             |                   |                 |              | 4,911                   |              |      |  | 17,586  |              |              |  |     |   |         |              | 38     |   |               |  | 4,911  |                 |             |  | 17,624     |  |          |   | 22,535   |  |  |  | (509    | ) |  | 1987           |  | 07/19/05 |  |  | 18-42 | 
| |  | Waterfall Towers                                 |  |       | (3) |  |          | Santa Rosa    |         |              | CA |              |         |               | 8,081        |                   |                 |              | 3,040                   |              |      |  | 14,216  |              |              |  |     |   |         |              | 1      |   |               |  | 3,040  |                 |             |  | 14,217     |  |          |   | 17,257   |  |  |  | (165    | ) |  | 1981           |  | 10/11/05 |  |  | 45    | 
| |  | Sunnyvale Business Center                        |  |       |     |  |          | Sunnyvale     |         |              | CA |              |         |               |             |                   |                 |              | 4,890                   |              |      |  | 44,010  |              |              |  |     |   |         |              | 46     |   |               |  | 4,890  |                 |             |  | 44,056     |  |          |   | 48,946   |  |  |  | (8,855  | ) |  | 1990           |  | 12/19/97 |  |  | 40    | 
| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |         |              |        |   |               |  |        |                 |             |  |            |  |          |   |          | 
| |  | San Francisco Region Totals                      |  |       |     |  |          |               | 366,589 |              |    |              | 660,884 |               |              |                   | 4,638,743       |              |                         |              | 446  |  |         |              | 318,538      |  |      |   | 661,330 |              |        |   | 4,957,281     |  |        |                 | 5,618,611   |  |            |  | (659,750 | ) |          |  |  |  |         |   |  |               
| |  |                                                  |  |       |     |  |          |               |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |         |              |        |   |               |  |        |                 |             |  |           
| |  | Seattle Region                                   |  |       |     |  |          |               |         |              |    |              |         |               |              |                   |                 |              |                         |              |      |  |         |              |              |  |      |   |         |              |        |   |               |  |        |                 |             |  |            |  |          |   |          |  |  |  |         |   |  |                |  |          |  |  |       | 
| |  | 10700 Building                                   |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              |                        |              |      |  | 15,958  |              |              |  |     |   |         |              | 102    |   |               |  |       |                 |             |  | 16,060     |  |          |   | 16,060   |  |  |  | (1,790  | ) |  | 1981           |  | 07/02/01 |  |  | 40    | 
| |  | 110 Atrium Place                                 |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 6,333                   |              |      |  | 35,888  |              |              |  |     |   |         |              | 2,814  |   |               |  | 6,333  |                 |             |  | 38,702     |  |          |   | 45,035   |  |  |  | (5,709  | ) |  | 1981           |  | 06/19/00 |  |  | 40    | 
| |  | Bellefield Office Park                           |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 12,232                  |              |      |  | 69,312  |              |              |  | (1   | ) |         |              | 6,248  |   |               |  | 12,231 |                 |             |  | 75,560     |  |          |   | 87,791   |  |  |  | (9,539  | ) |  | 1980           |  | 07/02/01 |  |  | 40    | 
| |  | Bellevue Gateway I                               |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 3,593                   |              |      |  | 20,360  |              |              |  |     |   |         |              | 2,200  |   |               |  | 3,593  |                 |             |  | 22,560     |  |          |   | 26,153   |  |  |  | (3,094  | ) |  | 1985           |  | 07/02/01 |  |  | 40    | 
| |  | Bellevue Gateway II                              |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 2,016                   |              |      |  | 11,423  |              |              |  |     |   |         |              | 910    |   |               |  | 2,016  |                 |             |  | 12,333     |  |          |   | 14,349   |  |  |  | (1,592  | ) |  | 1988           |  | 07/02/01 |  |  | 40    | 
| |  | Eastgate Office Park                             |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 6,468                   |              |      |  | 36,650  |              |              |  | 3    |   |         |              | 5,404  |   |               |  | 6,471  |                 |             |  | 42,054     |  |          |   | 48,525   |  |  |  | (5,617  | ) |  | 1985           |  | 07/02/01 |  |  | 40    | 
| |  | Gateway 405 Building                             |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 1,011                   |              |      |  | 5,727   |              |              |  |     |   |         |              | 480    |   |               |  | 1,011  |                 |             |  | 6,207      |  |          |   | 7,218    |  |  |  | (802    | ) |  | 1986           |  | 07/02/01 |  |  | 40    | 
| |  | I-90 Bellevue                                    |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 3,725                   |              |      |  | 21,108  |              |              |  |     |   |         |              | 238    |   |               |  | 3,725  |                 |             |  | 21,346     |  |          |   | 25,071   |  |  |  | (2,381  | ) |  | 1986           |  | 07/02/01 |  |  | 40    | 
| |  | Lincoln Executive Center                         |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 3,235                   |              |      |  | 18,329  |              |              |  |     |   |         |              | 1,705  |   |               |  | 3,235  |                 |             |  | 20,034     |  |          |   | 23,269   |  |  |  | (2,754  | ) |  | 1983-1985      |  | 07/02/01 |  |  | 40    | 
| |  | Lincoln Executive Center II & III                |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 4,918                   |              |      |  | 27,868  |              |              |  |     |   |         |              | 3,949  |   |               |  | 4,918  |                 |             |  | 31,817     |  |          |   | 36,735   |  |  |  | (3,819  | ) |  | 1983-1985      |  | 07/02/01 |  |  | 40    | 
| |  | Main Street Building                             |  |       | (4) |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 1,398                   |              |      |  | 7,922   |              |              |  |     |   |         |              | (1,931 | ) |               |  | 1,398  |                 |             |  | 5,991      |  |          |   | 7,389    |  |  |  | (89     | ) |  | 1980           |  | 07/02/01 |  |  | 40    | 
| |  | Plaza Center                                     |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 16,680                  |              |      |  | 94,521  |              |              |  |     |   |         |              | 5,005  |   |               |  | 16,680 |                 |             |  | 99,526     |  |          |   | 116,206  |  |  |  | (11,415 | ) |  | 1978/1983      |  | 07/02/01 |  |  | 40    | 
| |  | Plaza East                                       |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 4,687                   |              |      |  | 26,561  |              |              |  |     |   |         |              | 2,553  |   |               |  | 4,687  |                 |             |  | 29,114     |  |          |   | 33,801   |  |  |  | (3,542  | ) |  | 1988           |  | 07/02/01 |  |  | 40    | 
| |  | Sunset North Corporate Campus                    |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 17,031                  |              |      |  | 79,249  |              |              |  |     |   |         |              | 14,286 |   |               |  | 17,031 |                 |             |  | 93,535     |  |          |   | 110,566  |  |  |  | (17,887 | ) |  | 1999           |  | 06/30/00 |  |  | 40    | 
| |  | City Center Bellevue                             |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              | 10,349                  |              |      |  | 93,142  |              |              |  |     |   |         |              | 8,334  |   |               |  | 10,349 |                 |             |  | 101,476    |  |          |   | 111,825  |  |  |  | (19,286 | ) |  | 1987           |  | 01/28/99 |  |  | 40    | 
| |  | One Bellevue Center                              |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              |                        |              |      |  | 56,223  |              |              |  |     |   |         |              | 9,230  |   |               |  |       |                 |             |  | 65,453     |  |          |   | 65,453   |  |  |  | (13,224 | ) |  | 1983           |  | 12/17/97 |  |  | 40    | 
| |  | Symetra Financial Center (a.k.a. Rainier  Plaza) |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              |                        |              |      |  | 79,928  |              |              |  |     |   |         |              | 14,896 |   |               |  |       |                 |             |  | 94,824     |  |          |   | 94,824   |  |  |  | (18,350 | ) |  | 1986           |  | 12/17/97 |  |  | 40    | 
| |  | Key Center                                       |  |       |     |  |          | Bellevue      |         |              | WA |              |         |               |             |                   |                 |              |                        |              |      |  | 78,447  |              |              |  |     |   |         |              | 8,822  |   |               |  |       |                 |             |  | 87,269     |  |          |   | 87,269   |  |  |  | (8,116  | ) |  | 2000           |  | 06/19/00 |  |  | 40    | 
| |  | 410 17th Street                                  |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 4,474                   |              |      |  | 40,264  |              |              |  |     |   |         |              | 9,342  |   |               |  | 4,474  |                 |             |  | 49,606     |  |          |   | 54,080   |  |  |  | (11,090 | ) |  | 1978           |  | 04/30/98 |  |  | 40    | 
| |  | 4949 South Syracuse                              |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 822                     |              |      |  | 7,401   |              |              |  | 23   |   |         |              | 1,492  |   |               |  | 845    |                 |             |  | 8,893      |  |          |   | 9,738    |  |  |  | (2,012  | ) |  | 1982           |  | 07/15/98 |  |  | 40    | 
| |  | Denver Corporate Center II & III                 |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 6,059                   |              |      |  | 36,534  |              |              |  | 4    |   |         |              | 7,522  |   |               |  | 6,063  |                 |             |  | 44,056     |  |          |   | 50,119   |  |  |  | (10,838 | ) |  | 1981/1993-1997 |  | 12/20/90 |  |  | 40    | 
| |  | Denver Post Tower                                |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              |                        |              |      |  | 52,937  |              |              |  |     |   |         |              | 9,784  |   |               |  |       |                 |             |  | 62,721     |  |          |   | 62,721   |  |  |  | (14,621 | ) |  | 1984           |  | 04/21/98 |  |  | 40    | 
| |  | Dominion Plaza                                   |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 5,990                   |              |      |  | 53,911  |              |              |  |     |   |         |              | 8,272  |   |               |  | 5,990  |                 |             |  | 62,183     |  |          |   | 68,173   |  |  |  | (14,380 | ) |  | 1983           |  | 05/14/98 |  |  | 40    | 
| |  | Metropoint I                                     |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 6,375                   |              |      |  | 39,375  |              |              |  |     |   |         |              | 5,206  |   |               |  | 6,375  |                 |             |  | 44,581     |  |          |   | 50,956   |  |  |  | (9,504  | ) |  | 1987           |  | 07/15/98 |  |  | 40    | 
| |  | Metropoint II                                    |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 1,777                   |              |      |  | 17,865  |              |              |  |     |   |         |              | 3,625  |   |               |  | 1,777  |                 |             |  | 21,490     |  |          |   | 23,267   |  |  |  | (5,629  | ) |  | 1999           |  | 04/10/00 |  |  | 40    | 
| |  | U.S. Bank Tower                                  |  |       | (3) |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 6,301                   |              |      |  | 72,274  |              |              |  |     |   |         |              | 3,397  |   |               |  | 6,301  |                 |             |  | 75,671     |  |          |   | 81,972   |  |  |  | (8,919  | ) |  | 1974/2001      |  | 08/12/03 |  |  | 35    | 
| |  | Tabor Center                                     |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 12,948                  |              |      |  | 116,536 |              |              |  |     |   |         |              | 40,350 |   |               |  | 12,948 |                 |             |  | 156,886    |  |          |   | 169,834  |  |  |  | (29,049 | ) |  | 1985           |  | 04/30/98 |  |  | 40    | 
| |  | Trinity Place                                    |  |       |     |  |          | Denver        |         |              | CO |              |         |               |             |                   |                 |              | 1,898                   |              |      |  | 17,085  |              |              |  |     |   |         |              | 3,419  |   |               |  | 1,898  |                 |             |  | 20,504     |  |          |   | 22,402   |  |  |  | (4,987  | ) |  | 1983           |  | 04/30/98 |  |  | 40    | 
| |  | Millennium Plaza                                 |  |       |     |  |          | Englewood     |         |              | CO |              |         |               |             |                   |                 |              | 7,757                   |              |      |  | 38,314  |              |              |  |     |   |         |              | 698    |   |               |  | 7,757  |                 |             |  | 39,012     |  |          |   | 46,769   |  |  |  | (7,422  | ) |  | 1982           |  | 05/19/98 |  |  | 40    | 
| |  | Terrace Building                                 |  |       |     |  |          | Englewood     |         |              | CO |              |         |               |             |                   |                 |              | 1,546                   |              |      |  | 13,865  |              |              |  | 30   |   |         |              | 2,006  |   |               |  | 1,576  |                 |             |  | 15,871     |  |          |   | 17,447   |  |  |  | (3,233  | ) |  | 1982           |  | 07/15/98 |  |  | 40    | 
| |  | The Quadrant                                     |  |       |     |  |          | Englewood     |         |              | CO |              |         |               |             |                   |                 |              | 4,357                   |              |      |  | 39,215  |              |              |  |     |   |         |              | 6,431  |   |               |  | 4,357  |                 |             |  | 45,646     |  |          |   | 50,003   |  |  |  | (10,575 | ) |  | 1985           |  | 12/01/92 |  |  | 40    | 
| |  | 4000 Kruse Way Place                             |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              | 4,475                   |              |      |  | 25,360  |              |              |  |     |   |         |              | 2,292  |   |               |  | 4,475  |                 |             |  | 27,652     |  |          |   | 32,127   |  |  |  | (3,688  | ) |  | 1981/1986      |  | 07/02/01 |  |  | 40    | 
| |  | 4004 Kruse Way Place                             |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              | 1,888                   |              |      |  | 10,698  |              |              |  |     |   |         |              | 839    |   |               |  | 1,888  |                 |             |  | 11,537     |  |          |   | 13,425   |  |  |  | (1,633  | ) |  | 1996           |  | 07/02/01 |  |  | 40    | 
| |  | 4800 Meadows                                     |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              |                        |              |      |  | 17,448  |              |              |  |     |   |         |              | 896    |   |               |  |       |                 |             |  | 18,344     |  |          |   | 18,344   |  |  |  | (2,270  | ) |  | 1998           |  | 07/02/01 |  |  | 40    | 
| |  | 4900-5000 Meadows                                |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              |                        |              |      |  | 30,528  |              |              |  |     |   |         |              | 1,582  |   |               |  |       |                 |             |  | 32,110     |  |          |   | 32,110   |  |  |  | (4,184  | ) |  | 1990           |  | 07/02/01 |  |  | 40    | 
| |  | 4949 Meadows                                     |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              |                        |              |      |  | 26,941  |              |              |  |     |   |         |              | 1,545  |   |               |  |       |                 |             |  | 28,486     |  |          |   | 28,486   |  |  |  | (3,587  | ) |  | 1997           |  | 07/02/01 |  |  | 40    | 
| |  | 5800 & 6000 Meadows                              |  |       | (3) |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              | 4,810                   |              |      |  | 44,222  |              |              |  |     |   |         |              | 496    |   |               |  | 4,810  |                 |             |  | 44,718     |  |          |   | 49,528   |  |  |  | (3,467  | ) |  | 1999; 2001     |  | 09/30/04 |  |  | 42    | 
| |  | Kruse Oaks I                                     |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              |                        |              |      |  | 14,648  |              |              |  |     |   |         |              | 4,388  |   |               |  |       |                 |             |  | 19,036     |  |          |   | 19,036   |  |  |  | (2,847  | ) |  | 2001           |  | 07/02/01 |  |  | 40    | 
| |  | Kruse Way Plaza I & II                           |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              | 2,866                   |              |      |  | 16,239  |              |              |  |     |   |         |              | 1,282  |   |               |  | 2,866  |                 |             |  | 17,521     |  |          |   | 20,387   |  |  |  | (2,406  | ) |  | 1984-1986      |  | 07/02/01 |  |  | 40    | 
| |  | Kruse Woods                                      |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              | 10,812                  |              |      |  | 80,977  |              |              |  |     |   |         |              | 4,198  |   |               |  | 10,812 |                 |             |  | 85,175     |  |          |   | 95,987   |  |  |  | (10,843 | ) |  | 1986-1988      |  | 07/02/01 |  |  | 40    | 
| |  | Kruse Woods V                                    |  |       |     |  |          | Lake Oswego   |         |              | OR |              |         |               |             |                   |                 |              | 5,478                   |              |      |  | 21,244  |              |              |  |     |   |         |              | 4,946  |   |               |  | 5,478  |                 |             |  | 26,190     |  |          |   | 31,668   |  |  |  | (1,911  | ) |  | 2004           |  | 07/02/01 |  |  | 40    | 
| |  | Island Corporate Center                          |  |       |     |  |          | Mercer Island |         |              | WA |              |         |               |             |                   |                 |              | 2,700                   |              |      |  | 15,300  |              |              |  |     |   |         |              | 1,515  |   |               |  | 2,700  |                 |             |  | 16,815     |  |          |   | 19,515   |  |  |  | (2,643  | ) |  | 1987           |  | 06/19/00 |  |  | 40    | 
| |  | 5550 Macadam Building                            |  |       |     |  |          | Portland      |         |              | OR |              |         |               |             |                   |                 |              | 870                     |              |      |  | 4,929   |              |              |  |     |   |         |              | 889    |   |               |  | 870    |                 |             |  | 5,818      |  |          |   | 6,688    |  |  |  | (779    | ) |  | 1980           |  | 07/02/01 |  |  | 40    | 

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##### Table of Contents





| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          |  |  |  |         |   |  |                     |  |          |  |  |    | 
| |  | --------------------------------------------- |  | ----- | ------- |  | -------- | ------------- | --------- | ------------ | ---- | ------------ | --------- | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ----- |  | ------- | ------------ | ------------ | - | ---- |  | --------- | ------------ | ------- | - | ------------- |  | ------- | --------------- | ----------- |  | ---------- |  | ---------- | - | -------- |  |  |  | ------- | - |  | ------------------- |  | -------- |  |  | -- | 
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |       |  |         |              |              |   |      |  |           |             
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           | Subsequent to |              |                   | Close of Period |              |                         |              |       |  |         |              |              |   |      | 
| |  |                                               |  |       |         |  |          |               |           |              |      | Initial Cost |           |               | Acquisition  |                   |                 | 12/31/05     |                         |              |       |  |         |              |              |   |      |  |          
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              | Date of      |   |      |  |          
| |  |                                               |  |       |         |  |          |               |           | Encumbrances |      |              |           |               | Building and |                   |                 |              |                         | Building and |       |  |         |              | Building and |   |      |  |           | Accumulated  |         |   | Construction/ |  | Date    |                 | Depreciable | 
| |  | Description                                   |  | Notes |         |  | Location |               | State     |              |      | at 12/31/05  |           |               | Land         |                   |                 | Improvements |                         |              | Land  |  |         | Improvements |              |   | Land |  |           | Improvements |         |   | Total(1)      |  |         | Depreciation(1) |             |  | Renovation |  | Acquired   |   | Lives(2) | 
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          | 
| |  | Umpqua Bank Plaza                             |  |       |         |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              | 7,505                   |              |       |  | 42,529  |              |              |   |     |  |           |              | 5,412   |   |               |  | 7,505   |                 |             |  | 47,941     |  |            |   | 55,446   |  |  |  | (6,183  | ) |  | 1974/1994           |  | 07/02/01 |  |  | 40 | 
| |  | Lincoln Center                                |  |       |         |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              | 18,760                  |              |       |  | 106,307 |              |              |   |     |  |           |              | 12,293  |   |               |  | 18,760  |                 |             |  | 118,600    |  |            |   | 137,360  |  |  |  | (14,669 | ) |  | 1980/1989           |  | 07/02/01 |  |  | 40 | 
| |  | One Pacific Square                            |  |       |         |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              | 4,451                   |              |       |  | 25,221  |              |              |   |     |  |           |              | 9,835   |   |               |  | 4,451   |                 |             |  | 35,056     |  |            |   | 39,507   |  |  |  | (3,682  | ) |  | 1983                |  | 07/02/01 |  |  | 40 | 
| |  | River Forum I & II                            |  |       |         |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              | 4,038                   |              |       |  | 22,881  |              |              |   |     |  |           |              | 4,467   |   |               |  | 4,038   |                 |             |  | 27,348     |  |            |   | 31,386   |  |  |  | (4,091  | ) |  | 1985                |  | 07/02/01 |  |  | 40 | 
| |  | RiverSide Centre (Oregon)                     |  |       |         |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              | 2,537                   |              |       |  | 12,353  |              |              |   |     |  |           |              | 1,073   |   |               |  | 2,537   |                 |             |  | 13,426     |  |            |   | 15,963   |  |  |  | (2,898  | ) |  | 1947/1979           |  | 07/02/01 |  |  | 40 | 
| |  | Congress Center                               |  |       |         |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              | 5,383                   |              |       |  | 48,634  |              |              |   |     |  |           |              | 11,041  |   |               |  | 5,383   |                 |             |  | 59,675     |  |            |   | 65,058   |  |  |  | (13,447 | ) |  | 1980                |  | 12/17/97 |  |  | 40 | 
| |  | Southgate Office Plaza I & II                 |  |       | (4)     |  |          | Renton        |           |              | WA   |              |           |               |             |                   |                 |              | 4,794                   |              |       |  | 27,163  |              |              |   |     |  |           |              | (1,755  | ) |               |  | 4,794   |                 |             |  | 25,408     |  |            |   | 30,202   |  |  |  | (608    | ) |  | 1987/1991           |  | 07/02/01 |  |  | 40 | 
| |  | Washington Mutual Tower                       |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               | 79,250       |                   |                 |              | 51,000                  |              |       |  | 289,000 |              |              |   |     |  |           |              | 3,103   |   |               |  | 51,000  |                 |             |  | 292,103    |  |            |   | 343,103  |  |  |  | (43,098 | ) |  | 1988                |  | 06/19/00 |  |  | 40 | 
| |  | 1111 Third Avenue                             |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               |             |                   |                 |              | 9,900                   |              |       |  | 89,571  |              |              |   |     |  |           |              | 7,215   |   |               |  | 9,900   |                 |             |  | 96,786     |  |            |   | 106,686  |  |  |  | (21,216 | ) |  | 1980                |  | 12/17/97 |  |  | 40 | 
| |  | 10833-10845 NE 8th Street                     |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               |             |                   |                 |              |                        |              |       |  | 2,000   |              |              |   |     |  |           |              | (1,637  | ) |               |  |        |                 |             |  | 363        |  |            |   | 363      |  |  |  |        |   |  | 1962,1978,1982,1987 |  | 07/02/01 |  |  | 40 | 
| |  | Nordstrom Medical Tower                       |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               |             |                   |                 |              | 1,700                   |              |       |  | 15,450  |              |              |   |     |  |           |              | 1,158   |   |               |  | 1,700   |                 |             |  | 16,608     |  |            |   | 18,308   |  |  |  | (3,554  | ) |  | 1986                |  | 12/17/97 |  |  | 40 | 
| |  | Second and Seneca                             |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               |             |                   |                 |              | 10,922                  |              |       |  | 98,927  |              |              |   |     |  |           |              | 4,144   |   |               |  | 10,922  |                 |             |  | 103,071    |  |            |   | 113,993  |  |  |  | (21,869 | ) |  | 1991                |  | 12/17/97 |  |  | 40 | 
| |  | Second and Spring Building                    |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               |             |                   |                 |              | 1,968                   |              |       |  | 17,716  |              |              |   |     |  |           |              | 3,215   |   |               |  | 1,968   |                 |             |  | 20,931     |  |            |   | 22,899   |  |  |  | (4,300  | ) |  | 1906/1989           |  | 07/29/98 |  |  | 40 | 
| |  | Wells Fargo Center                            |  |       |         |  |          | Seattle       |           |              | WA   |              |           |               |             |                   |                 |              | 21,361                  |              |       |  | 193,529 |              |              |   |     |  |           |              | 14,292  |   |               |  | 21,361  |                 |             |  | 207,821    |  |            |   | 229,182  |  |  |  | (43,264 | ) |  | 1983                |  | 12/17/97 |  |  | 40 | 
| |  | Nimbus Corporate Center                       |  |       |         |  |          | Tigard        |           |              | OR   |              |           |               |             |                   |                 |              | 12,934                  |              |       |  | 73,291  |              |              |   |     |  |           |              | 11,849  |   |               |  | 12,934  |                 |             |  | 85,140     |  |            |   | 98,074   |  |  |  | (11,534 | ) |  | 1991                |  | 07/02/01 |  |  | 40 | 
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          | 
| |  | Seattle Region Totals                         |  |       |         |  |          |               | 79,250    |              |      |              | 345,132   |               |              |                   | 2,697,298       |              |                         |              | 59    |  |         |              | 297,362      |   |      |  | 345,191   |              |         |   | 2,994,660     |  |         |                 | 3,339,851   |  |            |  | (495,936   | ) |          |  |  |  |         |   |  |                    
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |           
| |  | Washington, D.C. Region                       |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          |  |  |  |         |   |  |                     |  |          |  |  |    | 
| |  | Polk and Taylor Buildings                     |  |       |         |  |          | Arlington     |           |              | VA   |              |           |               |             |                   |                 |              | 16,943                  |              |       |  | 152,483 |              |              |   |     |  |           |              | 40,091  |   |               |  | 16,943  |                 |             |  | 192,574    |  |            |   | 209,517  |  |  |  | (37,136 | ) |  | 1970                |  | 05/22/98 |  |  | 40 | 
| |  | Centerpointe I & II                           |  |       |         |  |          | Fairfax       |           |              | VA   |              |           |               |             |                   |                 |              | 8,838                   |              |       |  | 79,540  |              |              |   | 367  |  |           |              | 2,283   |   |               |  | 9,205   |                 |             |  | 81,823     |  |            |   | 91,028   |  |  |  | (17,071 | ) |  | 1990/1998           |  | 12/19/97 |  |  | 40 | 
| |  | Fair Oaks Plaza                               |  |       |         |  |          | Fairfax       |           |              | VA   |              |           |               |             |                   |                 |              | 2,412                   |              |       |  | 21,712  |              |              |   | 35   |  |           |              | 2,777   |   |               |  | 2,447   |                 |             |  | 24,489     |  |            |   | 26,936   |  |  |  | (5,525  | ) |  | 1986                |  | 11/24/97 |  |  | 40 | 
| |  | Northridge I                                  |  |       | (11)    |  |          | Herndon       |           |              | VA   |              |           |               | 12,148       |                   |                 |              | 3,225                   |              |       |  | 29,024  |              |              |   |     |  |           |              | 2,717   |   |               |  | 3,225   |                 |             |  | 31,741     |  |            |   | 34,966   |  |  |  | (6,045  | ) |  | 1988                |  | 12/19/97 |  |  | 40 | 
| |  | American Center                               |  |       | (3)     |  |          | McLean        |           |              | VA   |              |           |               |             |                   |                 |              | 15,000                  |              |       |  | 42,272  |              |              |   |     |  |           |              | 6,839   |   |               |  | 15,000  |                 |             |  | 49,111     |  |            |   | 64,111   |  |  |  | (5,714  | ) |  | 1985                |  | 05/25/04 |  |  | 35 | 
| |  | John Marshall I                               |  |       |         |  |          | McLean        |           |              | VA   |              |           |               |             |                   |                 |              | 5,216                   |              |       |  | 46,814  |              |              |   | 24   |  |           |              | 1,128   |   |               |  | 5,240   |                 |             |  | 47,942     |  |            |   | 53,182   |  |  |  | (9,582  | ) |  | 1981                |  | 12/19/97 |  |  | 40 | 
| |  | John Marshall III                             |  |       |         |  |          | McLean        |           |              | VA   |              |           |               |             |                   |                 |              | 9,950                   |              |       |  | 29,863  |              |              |   |     |  |           |              | 3,736   |   |               |  | 9,950   |                 |             |  | 33,599     |  |            |   | 43,549   |  |  |  | (6,328  | ) |  | 2000                |  | 12/19/97 |  |  | 40 | 
| |  | E.J. Randolph                                 |  |       | (11)    |  |          | McLean        |           |              | VA   |              |           |               | 13,390       |                   |                 |              | 3,937                   |              |       |  | 35,429  |              |              |   | 7    |  |           |              | 3,311   |   |               |  | 3,944   |                 |             |  | 38,740     |  |            |   | 42,684   |  |  |  | (8,428  | ) |  | 1983                |  | 12/19/97 |  |  | 40 | 
| |  | E.J. Randolph II                              |  |       |         |  |          | McLean        |           |              | VA   |              |           |               |             |                   |                 |              | 5,770                   |              |       |  | 24,587  |              |              |   |     |  |           |              | 4,006   |   |               |  | 5,770   |                 |             |  | 28,593     |  |            |   | 34,363   |  |  |  | (3,238  | ) |  | 2002                |  | 12/19/97 |  |  | 40 | 
| |  | Reston Town Center                            |  |       |         |  |          | Reston        |           |              | VA   |              |           |               | 111,180      |                   |                 |              | 18,175                  |              |       |  | 154,576 |              |              |   | 83   |  |           |              | 17,842  |   |               |  | 18,258  |                 |             |  | 172,418    |  |            |   | 190,676  |  |  |  | (36,812 | ) |  | 1990                |  | 10/22/96 |  |  | 40 | 
| |  | Reston Town Center Garage                     |  |       |         |  |          | Reston        |           |              | VA   |              |           |               |             |                   |                 |              | 1,943                   |              |       |  | 9,792   |              |              |   |     |  |           |              | 1,821   |   |               |  | 1,943   |                 |             |  | 11,613     |  |            |   | 13,556   |  |  |  | (2,450  | ) |  | 1999                |  | 10/22/96 |  |  | 40 | 
| |  | 11111 Sunset Hills Road (a.k.a. XO  Building) |  |       | (3)     |  |          | Reston        |           |              | VA   |              |           |               | 23,201       |                   |                 |              | 9,794                   |              |       |  | 42,254  |              |              |   |     |  |           |              | 554     |   |               |  | 9,794   |                 |             |  | 42,808     |  |            |   | 52,602   |  |  |  | (1,527  | ) |  | 2000                |  | 05/04/05 |  |  | 55 | 
| |  | 1300 North 17th Street                        |  |       |         |  |          | Rosslyn       |           |              | VA   |              |           |               | 79,656       |                   |                 |              | 9,811                   |              |       |  | 88,296  |              |              |   |     |  |           |              | 9,963   |   |               |  | 9,811   |                 |             |  | 98,259     |  |            |   | 108,070  |  |  |  | (19,884 | ) |  | 1980                |  | 12/19/97 |  |  | 40 | 
| |  | 1616 North Fort Myer Drive                    |  |       |         |  |          | Rosslyn       |           |              | VA   |              |           |               |             |                   |                 |              | 6,961                   |              |       |  | 62,646  |              |              |   |     |  |           |              | 9,675   |   |               |  | 6,961   |                 |             |  | 72,321     |  |            |   | 79,282   |  |  |  | (14,342 | ) |  | 1974                |  | 12/19/97 |  |  | 40 | 
| |  | Army and Navy Club Building                   |  |       |         |  |          | Washington    |           |              | D.C. |              |           |               |             |                   |                 |              | 3,773                   |              |       |  | 33,954  |              |              |   |     |  |           |              | 218     |   |               |  | 3,773   |                 |             |  | 34,172     |  |            |   | 37,945   |  |  |  | (3,136  | ) |  | 1986                |  | 05/24/02 |  |  | 40 | 
| |  | Market Square                                 |  |       |         |  |          | Washington    |           |              | D.C. |              |           |               |             |                   |                 |              | 33,077                  |              |       |  | 187,437 |              |              |   |     |  |           |              | 6,254   |   |               |  | 33,077  |                 |             |  | 193,691    |  |            |   | 226,768  |  |  |  | (26,996 | ) |  | 1990                |  | 06/19/00 |  |  | 40 | 
| |  | One Lafayette Centre                          |  |       |         |  |          | Washington    |           |              | D.C. |              |           |               |             |                   |                 |              | 8,262                   |              |       |  | 74,362  |              |              |   |     |  |           |              | 4,024   |   |               |  | 8,262   |                 |             |  | 78,386     |  |            |   | 86,648   |  |  |  | (16,700 | ) |  | 1980/1993           |  | 10/17/97 |  |  | 40 | 
| |  | Two Lafayette Centre                          |  |       |         |  |          | Washington    |           |              | D.C. |              |           |               |             |                   |                 |              | 2,642                   |              |       |  | 26,676  |              |              |   |     |  |           |              | 1,963   |   |               |  | 2,642   |                 |             |  | 28,639     |  |            |   | 31,281   |  |  |  | (4,200  | ) |  | 1985                |  | 07/11/00 |  |  | 40 | 
| |  | Three Lafayette Centre                        |  |       |         |  |          | Washington    |           |              | D.C. |              |           |               |             |                   |                 |              | 6,871                   |              |       |  | 61,841  |              |              |   |     |  |           |              | 8,066   |   |               |  | 6,871   |                 |             |  | 69,907     |  |            |   | 76,778   |  |  |  | (7,734  | ) |  | 1986                |  | 10/17/01 |  |  | 40 | 
| |  | Liberty Place                                 |  |       |         |  |          | Washington    |           |              | D.C. |              |           |               |             |                   |                 |              | 5,625                   |              |       |  | 50,625  |              |              |   |     |  |           |              | 1,889   |   |               |  | 5,625   |                 |             |  | 52,514     |  |            |   | 58,139   |  |  |  | (4,412  | ) |  | 1991                |  | 09/17/02 |  |  | 40 | 
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          | 
| |  | Washington, D.C. Region Totals                |  |       |         |  |          |               | 239,575   |              |      |              | 178,225   |               |              |                   | 1,254,183       |              |                         |              | 516   |  |         |              | 129,157      |   |      |  | 178,741   |              |         |   | 1,383,340     |  |         |                 | 1,562,081   |  |            |  | (237,260   | ) |          |  |  |  |         |   |  |                    
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |           
| |  | Subtotal Office Properties                    |  |       |         |  |          |               | 2,164,199 |              |      |              | 2,666,997 |               |              |                   | 18,701,580      |              |                         |              | 3,559 |  |         |              | 1,575,485    |   |      |  | 2,670,556 |              |         |   | 20,277,065    |  |         |                 | 22,947,621  |  |            |  | (3,316,182 | ) |          |  |  |  |         |   |  |                    
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |           
| |  | Development Properties:                       |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          |  |  |  |         |   |  |                     |  |          |  |  |    | 
| |  | Summit at Douglas Ridge II                    |  |       | (12)    |  |          | Roseville     |           |              | CA   |              |           |               |             |                   |                 |              | 3,597                   |              |       |  | 14,095  |              |              |   |     |  |           |              | 2,686   |   |               |  | 3,597   |                 |             |  | 16,781     |  |            |   | 20,378   |  |  |  | (203    | ) |  | 2005                |  | 05/20/05 |  |  | 59 | 
| |  | Bridge Pointe Corporate Center III            |  |       | (12)    |  |          | San Diego     |           |              | CA   |              |           |               |             |                   |                 |              | 5,250                   |              |       |  |        |              |              |   |     |  |           |              | 6,462   |   |               |  | 5,250   |                 |             |  | 6,462      |  |            |   | 11,712   |  |  |  |        |   |  | N/A                 |  | 07/02/01 |  |  | 40 | 
| |  | Foundry Square I (Barclays)                   |  |       | (12)    |  |          | San Francisco |           |              | CA   |              |           |               |             |                   |                 |              | 10,000                  |              |       |  |        |              |              |   |     |  |           |              | 2,481   |   |               |  | 10,000  |                 |             |  | 2,481      |  |            |   | 12,481   |  |  |  |        |   |  | N/A                 |  | 07/19/00 |  |  | 40 | 
| |  | 1095 Avenue of the Americas                   |  |       | (3)(12) |  |          | New York      |           |              | NY   |              |           |               |             |                   |                 |              | 268,799                 |              |       |  | 237,073 |              |              |   |     |  |           |              | 9,640   |   |               |  | 268,799 |                 |             |  | 246,713    |  |            |   | 515,512  |  |  |  | (2,586  | ) |  | 1972                |  | 09/29/05 |  |  | 38 | 
| |  | Kruse Oaks II                                 |  |       | (12)    |  |          | Portland      |           |              | OR   |              |           |               |             |                   |                 |              |                        |              |       |  |        |              |              |   |     |  |           |              | 4,922   |   |               |  |        |                 |             |  | 4,922      |  |            |   | 4,922    |  |  |  |        |   |  | N/A                 |  | 07/02/01 |  |  | 40 | 
| |  | City Center Plaza West                        |  |       | (12)    |  |          | Bellevue      |           |              | WA   |              |           |               |             |                   |                 |              | 11,420                  |              |       |  |        |              |              |   |     |  |           |              | 1,623   |   |               |  | 11,420  |                 |             |  | 1,623      |  |            |   | 13,043   |  |  |  |        |   |  | N/A                 |  | 01/28/99 |  |  | 40 | 
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          | 
| |  | Subtotal Development Properties               |  |       |         |  |          |               |          |              |      |              | 299,066   |               |              |                   | 251,168         |              |                         |              |      |  |         |              | 27,814       |   |      |  | 299,066   |              |         |   | 278,982       |  |         |                 | 578,048     |  |            |  | (2,789     | ) |          |  |  |  |         |   |  |                    
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |           
| |  | Property Held for Sale:                       |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          |  |  |  |         |   |  |                     |  |          |  |  |    | 
| |  | 8-16 Perimeter                                |  |       | (13)    |  |          | Atlanta       |           |              | GA   |              |           |               |             |                   |                 |              | 1,552                   |              |       |  | 5,693   |              |              |   |     |  |           |              | 1,033   |   |               |  | 1,552   |                 |             |  | 6,726      |  |            |   | 8,278    |  |  |  | (1,149  | ) |  | 1970/1989           |  | 11/10/05 |  |  | 40 | 
| |  | 120 Montgomery                                |  |       | (14)    |  |          | San Francisco |           |              | CA   |              |           |               |             |                   |                 |              | 17,564                  |              |       |  | 99,532  |              |              |   |     |  |           |              | (51,161 | ) |               |  | 17,564  |                 |             |  | 48,371     |  |            |   | 65,935   |  |  |  | (671    | ) |  | 1956                |  | 06/19/00 |  |  | 40 | 
| |  | 3001 Stender Way                              |  |       | (14)    |  |          | Santa Clara   |           |              | CA   |              |           |               |             |                   |                 |              | 2,263                   |              |       |  | 12,823  |              |              |   |     |  |           |              | (12,177 | ) |               |  | 2,263   |                 |             |  | 646        |  |            |   | 2,909    |  |  |  | (91     | ) |  | 1978                |  | 07/02/01 |  |  | 40 | 
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |            |  |            |   |          | 
| |  | Subtotal Property Held for Sale               |  |       |         |  |          |               |          |              |      |              | 21,379    |               |              |                   | 118,048         |              |                         |              |      |  |         |              | (62,305      | ) |      |  | 21,379    |              |         |   | 55,743        |  |         |                 | 77,122      |  |            |  | (1,911     | ) |          |  |  |  |         |   |  |                    
| |  |                                               |  |       |         |  |          |               |           |              |      |              |           |               |              |                   |                 |              |                         |              |       |  |         |              |              |   |      |  |           |              |         |   |               |  |         |                 |             |  |           

151



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##### Table of Contents





| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            |  |  |   |            |   |  |      |  |          |  |  |      | 
| |  | ------------------------------ |  | ----- | ---- |  | -------- | ------- | ----- | ------------ | -- | ------------ | ----- | ------------- | ------------ | ----------------- | --------------- | ------------ | ----------------------- | ------------ | ---- | - | ---------- | ------------ | ------------ | - | ----- |  | ----- | ------------ | --------- |  | ------------- | - | --------- | --------------- | ----------- | - | ---------- |  | -------- | - | ---------- |  |  | - | ---------- | - |  | ---- |  | -------- |  |  | ---- | 
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              | Costs Capitalized |                 |              | Gross Amount Carried at |              |      |   |            |              |              |   |       |  |       |             
| |  |                                |  |       |      |  |          |         |       |              |    |              |       | Subsequent to |              |                   | Close of Period |              |                         |              |      |   |            |              |              |   |       | 
| |  |                                |  |       |      |  |          |         |       |              |    | Initial Cost |       |               | Acquisition  |                   |                 | 12/31/05     |                         |              |      |   |            |              |              |   |       |  |      
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              | Date of      |   |       |  |      
| |  |                                |  |       |      |  |          |         |       | Encumbrances |    |              |       |               | Building and |                   |                 |              |                         | Building and |      |   |            |              | Building and |   |       |  |       | Accumulated  |           |  | Construction/ |   | Date      |                 | Depreciable |  
| |  | Description                    |  | Notes |      |  | Location |         | State |              |    | at 12/31/05  |       |               | Land         |                   |                 | Improvements |                         |              | Land |   |            | Improvements |              |   | Land  |  |       | Improvements |           |  | Total(1)      |   |           | Depreciation(1) |             |   | Renovation |  | Acquired |   | Lives(2)   | 
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            | 
| |  | Industrial Properties:         |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            |  |  |   |            |   |  |      |  |          |  |  |      | 
| |  | San Francisco Region           |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            |  |  |   |            |   |  |      |  |          |  |  |      | 
| |  | Benicia Ind II & III           |  |       |      |  |          | Benicia |       |              | CA |              |       |               |             |                   |                 |              | 2,250                   |              |      |   | 12,750     |              |              |   |      |  |       |              | 505       |  |               |   | 2,250     |                 |             |   | 13,255     |  |          |   | 15,505     |  |  |   | (1,549     | ) |  | 1996 |  | 07/02/01 |  |  | 40   | 
| |  | Independent Road Warehouse     |  |       |      |  |          | Oakland |       |              | CA |              |       |               |             |                   |                 |              | 900                     |              |      |   | 5,100      |              |              |   |      |  |       |              |          |  |               |   | 900       |                 |             |   | 5,100      |  |          |   | 6,000      |  |  |   | (568       | ) |  | 1972 |  | 07/02/01 |  |  | 40   | 
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            | 
| |  | San Francisco Region Totals    |  |       |      |  |          |         |      |              |    |              | 3,150 |               |              |                   | 17,850          |              |                         |              |     |   |            |              | 505          |   |       |  | 3,150 |              |           |  | 18,355        |   |           |                 | 21,505      |   |            |  | (2,117   | ) |            |  |  |   |            |   |  |     
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |           
| |  | Subtotal Industrial Properties |  |       |      |  |          |         |      |              |    |              | 3,150 |               |              |                   | 17,850          |              |                         |              |     |   |            |              | 505          |   |       |  | 3,150 |              |           |  | 18,355        |   |           |                 | 21,505      |   |            |  | (2,117   | ) |            |  |  |   |            |   |  |     
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |           
| |  | Land Available for Development |  |       | (4)  |  |          | Various |       |              |    |              |       |               |             |                   |                 |              | 176,868                 |              |      |   |           |              |              |   |      |  |       |              | 3,192     |  |               |   | 176,868   |                 |             |   | 3,192      |  |          |   | 180,060    |  |  |   | (18        | ) |  |      |  | Various  |  |  | N/A  | 
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            | 
| |  | Management Business            |  |       |      |  |          |         |       |              |    |              |       |               |             |                   |                 |              | 17                      |              |      |   | (150       | )            |              |   | 84    |  |       |              | 158,011   |  |               |   | 101       |                 |             |   | 157,861    |  |          |   | 157,962    |  |  |   | (45,324    | ) |  |      |  | Various  |  |  | 3-40 | 
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            | 
| |  | Investment in Real Estate      |  |       | (15) |  |          |         |       |              |    |              |       | $             | 2,164,199    |                   |                 | $            | 3,167,477               |              |      | $ | 19,088,496 |              |              | $ | 3,643 |  |       | $            | 1,702,702 |  |               | $ | 3,171,120 |                 |             | $ | 20,791,198 |  |          | $ | 23,962,318 |  |  | $ | (3,368,341 | ) |  |      |  |          |  |  |      | 
| |  |                                |  |       |      |  |          |         |       |              |    |              |       |               |              |                   |                 |              |                         |              |      |   |            |              |              |   |       |  |       |              |           |  |               |   |           |                 |             |   |            |  |          |   |            | 






|    |                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The aggregate cost, net of accumulated tax depreciation, for
    Federal Income Tax purposes as of December 31, 2005 was
    $14.9 billion.                                                                                                                                                                                                                              
|   
|(2) | The life to compute depreciation on building is
    18-59 years. The life to compute depreciation on building
    improvements is 3-40 years.                                                                                                                                                                                                                            
|   
|(3) | The initial cost of acquisition recorded for these properties
    includes intangible assets that are classified in Deferred
    leasing costs and other related intangibles and
    Other liabilities on the consolidated balance
    sheets. Accumulated depreciation for these properties includes
    the accumulated amortization for these related intangibles.
|   
|(4) | We recorded $65.7 million of impairment charges on these
    properties during 2005.                                                                                                                                                                                                                                                                                     
|   
|(5) | This property was previously under development and has been
    placed into service during 2005.                                                                                                                                                                                                                                                                         
|   
|(6) | We recorded $38.5 million of impairment charges on these
    properties during 2004.                                                                                                                                                                                                                                                                                     
|   
|(7) | Our interest in this Office Property is attributed to our
    ownership of indebtedness and was consolidated in 2004 under
    FIN 46(R).                                                                                                                                                                                                                                
|   
|(8) | Equity Office and an unaffiliated party own this property as
    tenants-in-common.                                                                                                                                                                                                                                                                                      
|   
|(9) | A mortgage note encumbering these properties has cross default
    and collateralization provisions.                                                                                                                                                                                                                                                                     



|     |                                                                                                                                                                                                                  
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | This Property contains 106 residential units in addition to
    226,197 square feet of office space.                                                                                                             
|    
|(11) | These loans are subject to cross default and collateralization
    provisions.                                                                                                                                   
|    
|(12) | These properties are in development. During the development
    period certain operating costs, including real estate taxes
    together with interest incurred during the development stages is
    capitalized.
|    
|(13) | This property was held for sale as of December 31, 2005,
    pursuant to FAS 144.                                                                                                                                
|    
|(14) | This property was held for sale at December 31, 2005,
    pursuant to FAS 144 and is reflected at its fair value less
    costs to sell.                                                                         
|    
|(15) | The encumbrances at December 31, 2005 include a net
    discount of $5.2 million.                                                                                                                                

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##### Table of Contents



A summary of activity of investment in real estate and
accumulated depreciation is as follows:




|                                 |                           |                                                                                                                                               |            |  |                   |   |            |                   |          |   |            |  |            |  
|-------------------------------- | ------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ---------- |  | ----------------- | - | ---------- | ----------------- | -------- | - | ---------- |  | ---------- | -
|                                 |                           | December 31, 2005                                                                                                                             |            |  | December 31, 2004 |   |            | December 31, 2003 |         
|                                 |                           |                                                                                                                                               |            |  |                   |   |            |                   |         
|Balance, beginning of the period |                           | $                                                                                                                                             | 25,420,675 |  |                   | $ | 24,334,162 |                   |          | $ | 25,163,516 | 
|                                 | Additions during period:  |                                                                                                                                               |            |  |                   |   |            |                   |          |   |            |  |           
|                                 |                           | Acquisitions                                                                                                                                  |            |  | 1,318,983         |   |            |                   | 484,566  |   |            |  | 163,511    |  
|                                 |                           | Consolidation of Properties previously accounted for under the
    equity method                                                              |            |  |                  |   |            |                   | 819,569  |   |            |  | 85,870     |  
|                                 |                           | Consolidation of SunAmerica Center                                                                                                            |            |  |                  |   |            |                   | 330,787  |   |            |  |           |  
|                                 |                           | Improvements                                                                                                                                  |            |  | 397,633           |   |            |                   | 430,570  |   |            |  | 471,638    |  
|                                 | Deductions during period: |                                                                                                                                               |            |  |                   |   |            |                   |          |   |            |  |           
|                                 |                           | Properties disposed of                                                                                                                        |            |  | (2,804,568        | ) |            |                   | (709,033 | ) |            |  | (1,545,598 | )
|                                 |                           | Provision for loss on properties held for sale                                                                                                |            |  | (48,038           | ) |            |                   | (2,123   | ) |            |  |           |  
|                                 |                           | Impairment                                                                                                                                    |            |  | (384,039          | ) |            |                   | (275,350 | ) |            |  | (7,667     | )
|                                 |                           | Write-off of fully depreciated assets which are no longer in
    service                                                                      |            |  | (22,523           | ) |            |                   | (77,816  | ) |            |  | (19,048    | )
|                                 |                           |                                                                                                                                               |            |  |                   |   |            |                   |         
|                                 |                           |                                                                                                                                               | 23,878,123 |  |                   |   | 25,335,332 |                   |          |   | 24,312,222 | 
|                                 |                           | Initial cost of acquisition recorded as intangible assets and
    classified in deferred lease costs on the
    consolidated balance sheets |            |  | 84,195            |   |            |                   | 85,343   |   |            |  | 21,940     |  
|                                 |                           |                                                                                                                                               |            |  |                   |   |            |                   |         
|Balance, end of period           |                           | $                                                                                                                                             | 23,962,318 |  |                   | $ | 25,420,675 |                   |          | $ | 24,334,162 | 
|                                 |                           |                                                                                                                                               |            |  |                   |   |            |                   |         



|                                 |                           |                                                                                                                                                                           |            |   |                   |   |            |                   |          |   |            |   |          |  
|-------------------------------- | ------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | - | ----------------- | - | ---------- | ----------------- | -------- | - | ---------- | - | -------- | -
|                                 |                           | December 31, 2005                                                                                                                                                         |            |   | December 31, 2004 |   |            | December 31, 2003 |         
|                                 |                           |                                                                                                                                                                           |            |   |                   |   |            |                   |         
|Balance, beginning of the period |                           | $                                                                                                                                                                         | (3,180,707 | ) |                   | $ | (2,578,361 | )                 |          | $ | (2,077,613 | )
|                                 | Additions during period:  |                                                                                                                                                                           |            |   |                   |   |            |                   |          |   |            |   |         
|                                 |                           | Depreciation                                                                                                                                                              |            |   | (699,259          | ) |            |                   | (709,924 | ) |            |   | (663,935 | )
|                                 |                           | Consolidation of Properties previously accounted for under the
    equity method                                                                                          |            |   |                  |   |            |                   | (53,110  | ) |            |   |         |  
|                                 |                           | Consolidation of SunAmerica Center                                                                                                                                        |            |   |                  |   |            |                   | (31,219  | ) |            |   |         |  
|                                 | Deductions during period: |                                                                                                                                                                           |            |   |                   |   |            |                   |          |   |            |   |         
|                                 |                           | Properties disposed of                                                                                                                                                    |            |   | 335,610           |   |            |                   | 75,123   |   |            |   | 144,251  |  
|                                 |                           | Provision for loss on properties held for sale                                                                                                                            |            |   | 10,606            |   |            |                   |         |   |            |   |         |  
|                                 |                           | Impairment                                                                                                                                                                |            |   | 165,036           |   |            |                   | 46,180   |   |            |   | 167      |  
|                                 |                           | Write-off of fully depreciated assets which are no longer in
    service                                                                                                  |            |   | 22,523            |   |            |                   | 77,816   |   |            |   | 19,048   |  
|                                 |                           |                                                                                                                                                                           |            |   |                   |   |            |                   |         
|                                 |                           |                                                                                                                                                                           | (3,346,191 | ) |                   |   | (3,173,495 | )                 |          |   | (2,578,082 | )
|                                 |                           | Accumulated amortization of initial cost of acquisition recorded
    as intangible assets and classified in deferred lease
    costs on the consolidated balance sheets |            |   | (22,150           | ) |            |                   | (7,212   | ) |            |   | (279     | )
|                                 |                           |                                                                                                                                                                           |            |   |                   |   |            |                   |         
|Balance, end of period           |                           | $                                                                                                                                                                         | (3,368,341 | ) |                   | $ | (3,180,707 | )                 |          | $ | (2,578,361 | )
|                                 |                           |                                                                                                                                                                           |            |   |                   |   |            |                   |         

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