##### Table of Contents



UNITED
    STATES 
    SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
      FORM 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission file number: 0-50261
 G REIT, Inc.
 (Exact name of registrant as
    specified in its charter)
  Maryland(State or other
    jurisdiction of
    incorporation or organization)

52-2362509(I.R.S. Employer
    Identification No.)1551 N. Tustin
    Avenue, Suite 200
    Santa Ana, California 92705(Address of principal
    executive offices)

92705(zip code)   (714) 667-8252
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each Class

Name of Each Exchange on Which RegisteredNone

None   Securities registered pursuant to Section 12(g) of the
    Act:
  Common Stock
 (Title of class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o o þ
  Rule 12b-2 o þ




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##### 



G REIT,
    Inc.
    (A Maryland Corporation)
    TABLE OF CONTENTS
  PagePART IItem 1.

Business


3Item 1A.

Risk
    Factors


9Item 2.

Properties


27Item 3.

Legal
    Proceedings


33Item 4.

Submission of
    Matters to a Vote of Security Holders


33PART IIItem 5.

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


34Item 6.

Selected Financial
    Data


35Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


38Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


61Item 8.

Financial
    Statements and Supplementary Data


62Item 9.

Changes in and
    Disagreements With Accountants on Accounting and Financial
    Disclosure


62Item 9A.

Controls and
    Procedures


62Item 9B.

Other
    Information


63PART IIIItem 10.

Directors,
    Executive Officers and Corporate Governance


64Item 11.

Executive
    Compensation


72Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


73Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


73Item 14.

Principal
    Accounting Fees and Services


76PART IVItem 15.

Exhibits, Financial
    Statement Schedules


78SIGNATURES


122EXHIBIT 21.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




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PART I  Item 1.
    Business.  The use of the words we, us or
    our refers to G REIT, Inc. and its subsidiaries,
    including G REIT, L.P., our Operating Partnership, except where
    the context otherwise requires.
  OUR
    COMPANY
      day-to-day month-to-month
    (714) 667-8252.
 3




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##### Table of Contents



Plan of
    Liquidation
        Liquidation
    Progress During 2006 and 2007
  
    In October 2006, we paid a special liquidating distribution of
    approximately $171,289,000, or $3.90 per share; and
    We sold the following properties in 2006:  
    On July 18, 2006, we sold our 600 B St. (Comerica) property
    located in San Diego, California, to an unaffiliated third
    party for a sales price of $95,500,000;
    On September 14, 2006, we sold our Hawthorne Plaza property
    located in San Francisco, California, to an unaffiliated
    third party for a sales price of $125,000,000;
    On September 29, 2006, we sold our AmberOaks Corporate
    Center property located in Austin, Texas, to an unaffiliated
    third party for a sales price of $46,837,000;
    On October 6, 2006, we sold our Brunswig Square property
    located in Los Angeles, California, to an unaffiliated third
    party for a sales price of $26,900,000;
    On October 17, 2006 we sold our Centerpointe Corporate Park
    property located in Kent, Washington, to an unaffiliated third
    party for a sales price of $77,525,000;
    On November 14, 2006, we sold our 5508 Highway 290 property
    located in Austin, Texas, to an unaffiliated third party for a
    sales price of $10,200,000;
    On November 15, 2006, we sold our Department of Children
    and Family Campus property located in Plantation, Florida, to
    tenant in common, or TIC, investors managed by our Advisor for a
    sales price of $13,000,000; 4




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
    On November 22, 2006, we sold our Public Ledger Building
    property located in Philadelphia, Pennsylvania, to an
    unaffiliated third party for a sales price of $43,000,000;
    On December 15, 2006, we sold our Atrium Building property
    located in Lincoln, Nebraska, to an unaffiliated third party for
    a sales price of $5,805,000; and
    On December 29, 2006, we sold our Gemini Plaza property
    located in Houston, Texas, to an unaffiliated third party for a
    sales price of $17,000,000  
    We have sold the following property in 2007:  
    On January 11, 2007, we sold our Two Corporate Plaza
    property located in Clear Lake, Texas, to an unaffiliated third
    party for a sales price of $18,000,000  
    We have contracted to sell the following properties in 2007:  
    On August 17, 2006, we entered into an agreement, as
    amended, to sell our One World Trade Center property located in
    Long Beach, California, to an unaffiliated third party for a
    sales price of $148,900,000
    On March 1, 2007, we entered into an agreement to sell our
    One Financial Plaza property, located in St. Louis,
    Missouri, of which we own 77.63%, to an unaffiliated third party
    for a sales price of $47,000,000
    On March 16, 2007, we entered into an agreement to sell our
    Opus Plaza at Ken Caryl property, located in Littleton,
    Colorado, to an unaffiliated third party for a sales price of
    $10,400,000  CURRENT
    INVESTMENT OBJECTIVES AND POLICIES
  General
    
    hold our income producing real property (or interests therein)
    generally through equity investments in a manner which permits
    us to continue to qualify as a REIT for federal income tax
    purposes;
    generate cash through the sale of our properties;
    preserve and protect stockholder capital; and
    realize capital appreciation upon the ultimate sale of our
    properties.     5




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Disposition
    Strategies
    
    the ability to sell our properties at the highest possible price
    in order to maximize the return to our stockholders;
    the ability of our buyers to finance the acquisition of our
    asset; and
    the ability to complete the sales transactions within the
    timeframe of our plan of liquidation.  Operating
    Strategies
    
    managing costs and seeking to minimize operating expenses by
    centralizing management, leasing, marketing, financing,
    accounting, renovation and data processing activities;
    aggressively leasing available space through targeted marketing
    augmented, where possible, by our Advisors local asset and
    property management offices;
    improving rental income and cash flow by aggressively marketing
    rentable space and raising rents when feasible;
    emphasizing regular maintenance and periodic renovation to meet
    the needs of tenants and to maximize returns; and
    refinancing properties when favorable financing terms are
    available to increase the cash flow.  FINANCING
    POLICIES
  debt-to-asset debt-to-total-asset
  TAX
    STATUS
   6




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DISTRIBUTION
    POLICY
    COMPETITION
       7




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GOVERNMENT
    REGULATIONS
    Costs of Compliance with the Americans with Disabilities
    Act.
  Costs of Government Environmental Regulation and Private
    Litigation.
  Use of Hazardous Substances by Some of Our
    Tenants.
  Other Federal, State and Local
    Regulations.
  SIGNIFICANT
    TENANTS
   8




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
    Federal Deposit Insurance Corp., or FDIC, at Pacific Place, at
    9.9%;
    Jacobs Engineering at One Financial Plaza, at 6.1%;
    General Services Administration (IRS) at North Pointe Corporate
    Center, at 4.9%;
    American Honda Finance Corporation at Madrona Buildings, at 4.3%;
    General Services Administration (U.S. Bankruptcy Court) at
    824 Market Street, at 4.1%;
    Southwestern Energy Production at North Belt, at 3.5%;
    Stifel, Nicolaus and Company at One Financial Plaza, at 3.3%;
    Navcom Technology, Inc. at Madrona Buildings, at 3.0%;
    General Services Administration (U.S. Customs) at One World
    Trade Center, at 2.9%; and
    Federal Bureau of Investigation, or FBI, at One World Trade
    Center, at 2.1%.      EMPLOYEES
    FINANCIAL
    INFORMATION ABOUT INDUSTRY SEGMENTS
    Item 1A.
    Risk
    Factors.  Risks
    Associated with Our Liquidation
  We may
    delay or reduce our liquidating distributions to our
    stockholders.
   9




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If we
    are unable to find buyers for our assets at our expected sales
    prices, our liquidating distributions may be delayed or
    reduced.
    Decreases
    in property values may reduce the amount that we receive upon a
    sale of our assets.
    
    adverse changes in economic conditions;
    the financial performance of our tenants, and the ability of our
    tenants to satisfy their obligations under their leases;
    potential major repairs which are not presently contemplated;
    terminations and renewals of leases by our tenants;
    changes in interest rates and the availability of financing;
    competition; and
    changes in real estate tax rates and other operating expenses.    If we
    are unable to maintain the occupancy rates of currently leased
    space and lease currently available space, if tenants default
    under their leases or other obligations to us during the
    liquidation process or if our cash flow during the liquidation
    is otherwise less than we expect, our liquidating distributions
    to our stockholders may be delayed or reduced.
   10




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If our
    liquidation costs or unpaid liabilities are greater than we
    expect, our liquidating distributions to our stockholders may be
    delayed or reduced.
    If any
    of the parties to our future sale agreements default thereunder,
    or if these sales do not otherwise close, our liquidating
    distributions to our stockholders may be delayed or
    reduced.
    Pursuing
    our plan of liquidation may cause us to fail to qualify as a
    REIT, which would dramatically lower the amount of our
    liquidating distributions.
   11




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
    not be allowed a deduction for dividends paid to stockholders in
    computing our taxable income;
    be subject to federal income tax, including any applicable
    alternative minimum tax, on our taxable income at regular
    corporate rates;
    be subject to increased state and local taxes; and
    be disqualified from treatment as a REIT for the taxable year in
    which we lose our qualification and for the four following
    taxable years.    Pursuing
    our plan of liquidation may cause us to be subject to federal
    income tax, which would reduce the amount of our liquidating
    distributions.
    The
    sale of our assets may cause us to be subject to a 100.0% excise
    tax on prohibited transactions, which would reduce
    the amount of our liquidating distributions.
    The
    pending SEC investigation of our Advisor could result in
    lawsuits or other actions against us or our
    affiliates.
  In the
    matter of Triple Net Properties, LLC.
 12




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and/or Accounting for
    Contingencies.
  If we
    are unable to retain our Advisor and our executives to complete
    our plan of liquidation, our liquidating distributions might be
    delayed or reduced.
  day-to-day month-to-month
  and/or
 13




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and/or
  Our
    stockholders may not receive any profits resulting from the sale
    of one or more of our properties, or receive such profits in a
    timely manner, because we may provide financing to the purchaser
    of such property.
    Our
    entity value may be adversely affected by our adoption of our
    plan of liquidation.
  winding-up
  There
    can be no assurance that our plan of liquidation will result in
    greater returns to our stockholders on their investment within a
    reasonable period of time than our stockholders would receive
    through other alternatives reasonably available to us at this
    time.
    Our
    board of directors may amend our approved plan of liquidation
    without further stockholder approval.
    Our
    board of directors will have the authority to sell our assets
    under terms less favorable that those assumed for the purpose of
    estimating our net liquidation value range.
   14




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Approval
    of our plan of liquidation may lead to stockholder litigation
    which could result in substantial costs and distract our
    management.
    Our
    officers and directors and our Advisor have conflicts of
    interest that may influence their implementation of our plan of
    liquidation and may cause them to manage our liquidation in a
    manner not solely in the best interests of our
    stockholders.
           15




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16




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Distributing
    interests in a liquidating trust may cause our stockholders to
    recognize gain prior to the receipt of cash.
  24-month 24-month 24-month
  Our
    adoption of our plan of liquidation caused our accounting basis
    to change, which could require us to write-down our
    assets.
        Stockholders
    could be liable to the extent of liquidating distributions
    received if contingent reserves are insufficient to satisfy our
    liabilities.
   17




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and/or
  We may
    have underestimated the amount of prepayment fees or defeasance
    charges on our mortgages.
    We
    expect to incur increasingly significant costs in connection
    with Sarbanes-Oxley compliance and we may become subject to
    liability for any failure to comply.
    and/or
  RISKS OF
    OUR BUSINESS
  Erroneous
    disclosures in the prior performance tables in our initial and
    second public offering documents could result in lawsuits or
    other actions against us which could have a material adverse
    effect upon our business and results of
    operations.
   18




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Distributions
    by us may include a return of capital.
    Due to
    the risks involved in the ownership of real estate, there is no
    guarantee of any return on our stockholders investments
    and our stockholders may lose some or all of their
    investment.
    
    changes in the general economic climate;
    changes in local conditions such as an oversupply of space or
    reduction in demand for real estate;
    changes in interest rates and the availability of
    financing; and
    changes in laws and governmental regulations, including those
    governing real estate usage, zoning and taxes.    Our
    properties face significant competition.
    We
    depend upon our tenants to pay rent, and their inability to pay
    rent may substantially reduce our revenues and cash available
    for distribution to our stockholders.
   19




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
    downturns in national, regional or local economic conditions
    where our properties are located, which generally will
    negatively impact the demand for office space and rental rates;
    changes in local market conditions such as an oversupply of
    office properties, including space available by sublease, or a
    reduction in demand for the lease of office properties, making
    it more difficult for us to lease space at attractive rental
    rates or at all;
    competition from other available office properties owned by
    others, which could cause us to lose current or prospective
    tenants or cause us to reduce rental rates to competitive levels;
    our ability to pay for adequate maintenance, insurance, utility,
    security and other operating costs, including real estate taxes
    and debt service payments, that are not necessarily reduced when
    circumstances such as market factors and competition cause a
    reduction in income from a property; and
    changes in federal, state or local regulations and controls
    affecting rents, prices of goods, interest rates, fuel and
    energy consumption.    Lack
    of diversification and illiquidity of real estate may make it
    difficult for us to sell underperforming properties or recover
    our investment in one or more properties.
    Lack
    of geographic diversity may expose us to regional economic
    downturns that could adversely impact our operations or our
    ability to recover our investment in one or more
    properties.
    Our
    properties depend upon the California and Texas economies and
    the demand for office space.
   20




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Losses
    for which we either could not or did not obtain insurance will
    adversely affect our earnings and we may be unable to comply
    with insurance requirements contained in mortgage or other
    agreements due to high insurance costs.
  and/or
  Our
    co-ownership arrangements with affiliated entities may not
    reflect solely our stockholders best interests and may
    subject these investments to increased risks.
    
    the risk that the co-owner(s) in the investment might become
    bankrupt;
    the risk that the co-owner(s) may at any time have economic or
    business interests or goals which are inconsistent with our
    business interests or goals;
    the risk that the co-owner(s) may be unable to make required
    payments on loans under which we are jointly and severally
    liable; or 21




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
    the risk that the co-owner(s) may be in a position to take
    action contrary to our instructions or requests or contrary to
    our policies or objectives, such as selling a property at a time
    when it would have adverse consequences to us.    There
    is currently no public market for our common stock. Therefore,
    it will likely be difficult for our stockholders to sell their
    shares and, if our stockholders are able to sell their shares in
    a fully liquid manner, our stockholders may elect to do so at a
    substantial discount from the price they paid for these
    matters.
    Our
    success will be dependent on the performance of our Advisor as
    well as key employees of our Advisor.
  day-to-day and/or
  Our
    use of borrowings to partially fund improvements on properties
    could result in foreclosures and unexpected debt service
    expenses upon refinancing, both of which could have an adverse
    impact on our operations and cash flow. Additionally,
    restrictive covenants in our loan documents may restrict our
    operating or acquisition activities.
     22




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debt-to-asset debt-to-total-asset
    The
    pending SEC investigation of our Advisor could result in
    defaults or alleged defaults under our loan documents or limit
    our ability to obtain debt financing in the
    future.
    The
    real estate we purchased may not appreciate or may decrease in
    value.
    Because
    some of our principal tenants are U.S. government and state
    agencies, our properties may have a higher risk of terrorist
    attack than similar properties leased to non-governmental
    tenants.
    We
    depend on the U.S. government for a significant portion of
    our revenues. Any failure by the U.S. government to perform
    its obligations or renew its leases upon expiration may harm our
    cash flow and ability to pay liquidating
    distributions.
   23




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An
    increase in the operating costs of our government-leased
    properties would harm our cash flow and ability to pay
    liquidating distributions.
    Since
    our cash flow is not assured, we may not pay distributions in
    the future.
    Our
    board of directors may alter our investment policies at any time
    without stockholder approval.
    Our
    Advisors past performance is not a predictor of our future
    results.
    Certain
    provisions of Maryland law and our charter and bylaws could
    hinder, delay or prevent a change in control.
    The
    conflicts of interest of our Advisors officers with us
    means we may not be managed by our Advisor solely in the best
    interests of our stockholders.
   24




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and/or
  
    limit the time and services that our Advisor devotes to us,
    because it will be providing similar services to T REIT, Inc.,
    NNN 2002 Value Fund, LLC, NNN 2003 Value Fund, LLC, NNN
    Apartment REIT, Inc., NNN Healthcare/Office REIT, Inc. and other
    real estate programs and properties;
    impair our ability to compete for tenants in geographic areas
    where other properties are advised by our Advisor and its
    affiliates; and
    impair our ability to compete for the disposition of properties
    with other real estate entities that are also advised by our
    Advisor and its affiliates and seeking to dispose of properties
    at or about the same time as us.    The
    absence of arms length bargaining may mean that our
    agreements are not as favorable to our stockholders as these
    agreements otherwise would have been.
    If we
    fail to qualify as a REIT, our stockholders could be adversely
    affected.
    
    that the gross income and investments of a REIT are largely real
    estate related, including mortgages secured by real estate;
    that a REIT distributes substantially all its ordinary taxable
    income to its stockholders on a current basis; and
    that the REITs equity ownership is not overly concentrated.     25




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We may
    not be able to meet, or we may need to incur borrowings that
    would otherwise not be incurred to meet, REIT minimum
    distribution requirements.
      
    the amount of the cash available for distribution;
    the impact of such distribution on other partners of the
    Operating Partnership;
    the Operating Partnerships financial condition;
    the Operating Partnerships capital expenditure
    requirements and reserves therefore; and
    the annual distribution requirements contained in the Code
    necessary to qualify and maintain our qualification as a REIT.    and/or and/or
  We may
    be harmed by changes in laws, including tax laws applicable to
    REITs, or the reduced 15.0% tax rate on certain corporate
    dividends.
     26




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Dramatic
    increases in insurance rates could adversely affect our cash
    flow and our ability to make liquidating distributions to our
    stockholders pursuant to our plan of liquidation.
    Item 2.
    Properties.      % Total





AnnualGLA


% of


%


Date


Annual


of Annual


Physical


Rent perProperty

Property Location


(Sq Ft)


GLA


Owned


Acquired


Rent(1)


Rent


Occupancy(2)


Sq Ft(3)Two Corporate Plaza


Clear Lake, TX



161,000



5.3
%


100.0
%


11/27/02


$
2,298,000



4.5
%


91.9
%

$
15.50Bay View Plaza


Alameda, CA



61,000



2.0



97.7



07/31/03



608,000



1.2



41.6



23.74North Pointe Corporate Center


Sacramento, CA



133,000



4.4



100.0



08/11/03



3,055,000



6.0



87.8



26.13824 Market St.


Wilmington, DE



203,000



6.7



100.0



10/10/03



4,045,000



8.0



81.3



24.53Sutter Square Galleria


Sacramento, CA



61,000



2.0



100.0



10/28/03



1,228,000



2.4



97.3



20.66One World Trade Center


Long Beach, CA



573,000



18.8



100.0



12/05/03



11,942,000



23.5



86.8



23.99Madrona Buildings


Torrance, CA



211,000



6.9



100.0



03/31/04



4,719,000



9.3



87.0



25.67North Belt Corporate Center


Houston, TX



157,000



5.2



100.0



04/08/04



2,526,000



5.0



99.9



16.16Pacific Place


Dallas, TX



324,000



10.6



100.0



05/26/04



5,036,000



9.9



99.7



15.58Western Place I & II


Fort Worth, TX



430,000



14.1



78.5



07/23/04



6,050,000



11.9



82.4



17.09One Financial Plaza


St. Louis, MO



434,000



14.3



77.6



08/06/04



6,095,000



12.0



85.2



16.48Pax River Office


Lexington Park, MD



172,000



5.7



100.0



08/06/04



1,891,000



3.7



81.9



13.41Opus Plaza at Ken Caryl


Littleton, CO



62,000



2.0



100.0



09/12/05



777,000



1.5



100.0



12.51Eaton Freeway


Phoenix, AZ



62,000



2.0



100.0



10/21/05



570,000



1.1



100.0



9.16Totals






3,044,000














$
50,840,000







87.5
%

$
19.07     (1)
    
    Annualized rental income is based on contractual base rent from
    leases in effect as of December 31, 2006.(2)
    
    As of December 31, 2006, approximately 87.5% of the total
    GLA in our consolidated properties was leased.(3)
    
    Average annual rent per occupied square foot as of
    December 31, 2006.    
    we believe all of our properties are adequately covered by
    insurance and are suitable for their intended purposes;
    we have no plans for any material renovations, improvements or
    development of our properties, except in accordance with planned
    budgets;
    our properties are located in markets where we are subject to
    competition in attracting new tenants and retaining current
    tenants; and 27




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
    prior to the adoption of our plan of liquidation, depreciation
    was provided on a straight-line basis over the estimated useful
    lives of the buildings, ranging primarily from 15 to
    39 years and over the shorter of the lease term or useful
    lives of the tenant improvements. Properties cease to be
    depreciated under the liquidation basis of accounting.  G REIT,
    Inc.
    
 28




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Congress
    Center Ownership
    
  Bay View
    Plaza Ownership
    
 29




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Western
    Place I & II Ownership
    
 30




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One
    Financial Plaza Ownership
    
  Lease
    Expiration Table
    % of TotalTotal Sq.





Annual Rent


Annual RentNumber


Ft. of


% of Leased Area


Under


Represented byof Leases


Expiring


Represented by


Expiring


ExpiringYear Ending December 31

Expiring


Leases


Expiring Leases


Leases


Leases(1)2007


31



692,000



26.3
%

$
12,202,000



24.0
%2008


24



131,000



5.0



2,520,000



5.02009


39



283,000



10.8



5,471,000



10.82010


35



264,000



10.0



5,330,000



10.52011


22



274,000



10.4



4,428,000



8.72012


17



568,000



21.6



9,853,000



19.42013


6



132,000



5.0



3,500,000



6.92014


4



80,000



3.0



1,118,000



2.22015


7



171,000



6.5



4,077,000



8.02016


5



36,000



1.4



823,000



1.6Thereafter


















Total


190



2,631,000



100.0
%

$
49,322,000



97.1
%  31




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(1)
    
    The annual rent percentage is based on the total annual base
    rent as of December 31, 2006, which, in addition to leases
    with scheduled expirations as included in this table, include
    certain tenants that have leases extended on a monthly basis.  Concentration
    of Tenants
    % ofCurrent


TotalAnnual Base


Rental


Rentable


Lease


RenewalLessee

Property

Rent


Income


Square Feet


Expiration


OptionsFDIC(*)

Pacific Place

$
5,019,000



9.9
%


321,000



11/30/2007



NoneJacobs Engineering

One Financial Plaza


3,124,000



6.1



178,000



09/30/2012



One 5 yearGSA (IRS)(*)

North Pointe
    Corporate Center


2,490,000



4.9



92,000



08/17/2007



NoneAmerican Honda Finance Corp

Madrona Buildings


2,198,000



4.3



87,000



03/31/2015



One 5 yearGSA (U.S. Bankruptcy Court)(*)

824 Market Street


2,069,000



4.1



69,000



08/05/2013



NoneSW Energy Production

North Belt


1,795,000



3.5



106,000



12/21/2012



Two 5 yearStifel, Nicolaus and Company

One Financial Plaza


1,696,000



3.3



98,000



04/30/2011



Two 5 yearNavcom Technology, Inc.

Madrona Buildings


1,531,000



3.0



53,000



07/31/2010



Two 5 yearGSA (U.S. Customs)(*)

One World Trade
    Center


1,478,000



2.9



51,000



09/30/2012



NoneFBI(*)

One World Trade
    Center


1,093,000



2.1



30,000



06/30/2012



None$
22,493,000



44.1
%


1,085,000     (*)
    
    Government entity or government contractor.  Geographic
    Diversification; Concentration Table
    ApproximateAggregate


Approximate


Current


% ofNo. of


Rentable


% of Rentable


Annual Base


AggregateState

Properties


Square Feet


Square Feet


Rent


Annual RentArizona


1



62,000



2.0
%

$
570,000



1.1
%California


5



1,039,000



34.1



21,552,000



42.4Colorado


1



62,000



2.0



777,000



1.5Delaware


1



203,000



6.7



4,045,000



8.0Maryland


1



172,000



5.7



1,891,000



3.7Missouri


1



434,000



14.3



6,095,000



12.0Texas


4



1,072,000



35.2



15,910,000



31.3Total


14



3,044,000



100.0
%

$
50,840,000



100.0
%   Indebtedness
   32




---



##### Table of Contents



Item 3.
    Legal
    Proceedings.  SEC
    Investigation
  In the matter of Triple Net Properties, LLC.
  and/or
  Prior
    Performance Tables
    Litigation
    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   33




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information
    Stockholders
    Distributions
      Equity
    Compensation Plan Information
   34




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.    SELECTED
    FINANCIAL DATA
  G REIT,
    INC.
    (a Maryland corporation)
  Liquidation BasisAs of December 31,


As of December 31,Selected Financial Data(1)

2006


2005STATEMENT OF NET ASSETS:Total assets

$
526,905,000


$
887,499,000Mortgage loans payable, including
    properties held for sale


225,836,000



350,402,000Credit facility and other debt






60,964,000Net assets in liquidation(2)


288,739,000



453,459,000Net asset value per share(2)

$
6.57


$
10.34   Liquidation BasisFor the Year EndedDecember 31,2006STATEMENT OF CHANGES IN NET ASSETS:Net assets in liquidation,
    beginning of period

$
453,459,000Change in estimated costs in
    excess of estimated receipts during liquidation


4,560,000Net increase in fair value


23,502,000Distributions to stockholders


(192,782,000
)Change in net assets in liquidation


(164,720,000
)Net assets in liquidation, end of
    period

$
288,739,000   Going Concern BasisAs of December 31,Selected Financial Data(1)

2004


2003


2002BALANCE SHEET DATA:Total assets

$
915,050,000


$
345,399,000


$
36,461,000Mortgage loans payable, including
    properties held for sale


442,275,000



97,257,000



16,860,000Credit facility and other debt


58,369,000



81,534,000



Stockholders equity


357,025,000



150,522,000



18,350,000   35




---



##### Table of Contents



Going Concern BasisYears Ended December 31,2005


2004


2003


2002OPERATING DATA (BY YEAR):General and administrative expense

$
4,006,000


$
2,419,000


$
1,287,000


$
142,000Interest (including amortization
    of deferred financing costs)


2,054,000



1,243,000



293,000



15,000Income from discontinued
    operations, including gain on sale


6,335,000



1,225,000



1,337,000



166,000Net income (loss)


2,629,000



(1,876,000
)


78,000



26,000Income (loss) per common share,
    basic and diluted(3):Loss from continuing operations


(0.08
)


(0.08
)


(0.15
)


(0.35
)Income (loss) from discontinued
    operations


0.14



0.03



0.16



0.41Net income (loss)


0.06



(0.05
)


0.01



0.06Distributions declared


32,888,000



28,042,000



6,211,000



280,000Distributions per common share(3)

$
0.75


$
0.75


$
0.74


$
0.69Weighted-average number of shares
    outstanding(3):Basic and diluted


43,867,000



37,336,000



8,243,000



405,000OTHER DATA:Cash flows provided by (used in)
    operating activities

$
19,697,000


$
39,905,000


$
7,878,000


$
(609,000
)Cash flows provided by (used in)
    investing activities


80,432,000



(563,218,000
)


(291,418,000
)


(26,101,000
)Cash flows (used in) provided by
    financing activities


(110,351,000
)


525,347,000



290,694,000



35,089,000Funds from operations(3)(4)

$
30,661,000


$
33,818,000


$
5,019,000


$
128,000Number of consolidated properties


24



23



11



2Rentable square feet


5,650,000



5,972,000



2,146,000



235,000Occupancy of portfolio


87.4
%


87.5
%


88.0
%


96.0
%     (1)
    
    The above selected financial data should be read in conjunction
    with the historical consolidated financial statements and
    related notes appearing elsewhere in this report.(2)
    
    The net assets in liquidation as of December 31, 2006 and
    2005 of $288,739,000 and $453,459,000, respectively, plus the
    liquidating distributions to our stockholders through
    December 31, 2006 and 2005 of approximately $192,782,000
    and $0, respectively, would result in liquidating distributions
    to our stockholders per share of approximately $10.96 and $10.34
    as of December 31, 2006 and 2005, respectively.(3)
    
    Net income (loss) and distributions per share are based upon the
    weighted-average number of shares of common stock outstanding.
    Distributions by us of the current and accumulated earnings and
    profits for federal income tax purposes are taxable to our
    stockholders as ordinary income. Distributions in excess of
    these earnings and profits generally are treated as a
    non-taxable reduction of our stockholders basis in the
    shares of common stock to the extent thereof (a return of
    capital for tax purposes), and thereafter as taxable gain. These
    distributions in excess of earnings and profits will have the
    effect of deferring taxation of the distributions until the sale
    of the stockholders shares. For the years ended
    December 31, 2006, 2005, 2004, 2003 and 2002, 1.3%, 53.5%,
    51.6%, 53.6% and 34.7%, respectively, represented a return of 36




---



##### Table of Contents



capital for tax purposes. In order to maintain our qualification
    as a REIT, we must make annual distributions to our stockholders
    of at least 90.0% of our REIT taxable income. REIT taxable
    income does not include net capital gains. Under certain
    circumstances, we may be required to make distributions in
    excess of cash available for distribution in order to meet the
    REIT distribution requirements. Distributions are determined by
    our board of directors and are dependent on a number of factors,
    including the amount of funds available for distribution, our
    financial condition, any decision by our board of directors to
    reinvest funds rather than to distribute funds, our capital
    expenditures, the annual distribution required to maintain REIT
    status under the Code and other factors our board of directors
    may deem relevant.(4)
    
    Prior to the adoption of our plan of liquidation, one of our
    objectives was to provide cash distributions to our stockholders
    from cash generated from operations. We consider Funds From
    Operations, or FFO, to be an appropriate supplemental measure of
    a REITs operating performance as it is based on a net
    income analysis of property portfolio performance that excludes
    non-cash items such as depreciation. We compute FFO in
    accordance with the White Paper on FFO approved by the Board of
    Governors of the National Association of Real Estate Investment
    Trusts, or NAREIT, as revised in February 2004. The White Paper
    defines FFO as net income or loss computed in accordance with
    GAAP excluding extraordinary items, as defined by GAAP, and
    gains and losses from sales of depreciable operating property,
    but including real estate related depreciation and amortization
    (excluding amortization of deferred financing costs and
    depreciation of non-real estate assets), and after adjustment
    for unconsolidated partnerships and joint ventures. Other REITs
    may use different methodologies for calculating FFO and,
    accordingly, our FFO calculations may not be comparable to other
    REITs.Because FFO excludes depreciation and amortization, gains and
    losses from property dispositions and extraordinary items, it
    provides a performance measure that, when compared year over
    year, reflects the impact to operations from trends in occupancy
    rates, rental rates, operating costs, development activities,
    general and administrative expenses and interest costs,
    providing a perspective not immediately apparent from net
    income. In addition, we believe FFO provides useful information
    to the investment community about our financial performance when
    compared to other REITs since FFO is generally recognized as the
    industry standard for reporting the operations of REITs.However, FFO should not be viewed as an alternative measure of
    our operating performance since it does not reflect either
    depreciation and amortization costs or the level of capital
    expenditures and leasing costs necessary to maintain the
    operating performance of our properties, which are significant
    economic costs and could materially impact our results of
    operations.Non-cash adjustments to arrive at FFO consisted of adjustments
    for, depreciation and amortization and net gain (loss) from the
    sale of real estate and a joint venture. For additional
    information, see Funds from Operations, which
    includes a reconciliation of our GAAP net income available to
    our stockholders to FFO for the years ended December 31,
    2005 and 2004. 37




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.    Forward-Looking
    Statements
    Overview
    and Background
      day-to-day
 38




---



##### Table of Contents



month-to-month
    Business
    Strategy and Plan of Liquidation
         39




---



##### Table of Contents



Dispositions
    in 2006
    600 B
    Street  San Diego, California
    Hawthorne
    Plaza  San Francisco,
    California
    AmberOaks  Austin,
    Texas
    Brunswig
    Square  Los Angeles, California
    Centerpoint
    Corporate Park  Kent, Washington
   40




---



##### Table of Contents



5508
    Highway 290  Austin, Texas
    Department
    of Children and Family Campus  Plantation,
    Florida
    Public
    Ledger Building  Philadelphia,
    Pennsylvania
    Atrium
    Building  Lincoln, Nebraska
    Gemini
    Plaza  Houston, Texas
   41




---



##### Table of Contents



Dispositions
    in 2005
    525 B
    Street  San Diego, California
    Park
    Sahara  Las Vegas, Nevada
    Acquisitions
    in 2005
      Property

Property Location

Date Acquired

Ownership %Opus Plaza at Ken Caryl

Littleton, Colorado

September 12, 2005


100%Eaton Freeway

Phoenix, Arizona

October 21, 2005


100%   Business Combinations
 42




---



##### Table of Contents



Acquisitions
    in 2004
      Property

Property Location

Date Acquired

Ownership %AmberOaks Corporate Center

Austin, Texas

January 20, 2004


100.0%Public Ledger Building

Philadelphia, Pennsylvania

February 13, 2004


100.0%Madrona Buildings

Torrance, California

March 31, 2004


100.0%Brunswig Square

Los Angeles, California

April 5, 2004


100.0%North Belt Corporate Center

Houston, Texas

April 8, 2004


100.0%Hawthorne Plaza

San Francisco, California

April 20, 2004


100.0%Pacific Place

Dallas, Texas

May 26, 2004


100.0%525 B Street (Golden Eagle)

San Diego, California

June 14, 2004


100.0%600 B Street (Comerica)

San Diego, California

June 14, 2004


100.0%Western Place I & II

Fort Worth, Texas

July 23, 2004


78.5%Pax River Office Park

Lexington Park, Maryland

August 6, 2004


100.0%One Financial Plaza

St. Louis, Missouri

August 6, 2004


77.6%     Critical
    Accounting Policies
  Use of
    Estimates
   43




---



##### Table of Contents



Liquidation
    Basis of Accounting
  tenants-in-common,
    Asset
    (Liability) for Estimated Receipts ( Costs) in Excess of
    Estimated (Costs) Receipts During Liquidation
    December 31,


Cash Payments


Change in


December 31,2005


and (Receipts)


Estimates


2006Assets:Estimated net inflows from
    consolidated and unconsolidated operating activities

$
24,390,000


$
(27,104,000
)

$
15,138,000


$
12,424,000Liabilities:Liquidation costs


(4,418,000
)


2,697,000



(3,570,000
)


(5,291,000
)Distributions to stockholders


(8,226,000
)


8,235,000



(9,000
)


Capital expenditures


(13,265,000
)


9,804,000



(631,000
)


(4,092,000
)(25,909,000
)


20,736,000



(4,210,000
)


(9,383,000
)Total asset (liability) for
    estimated receipts (costs) in excess of estimated (costs)
    receipts during liquidation

$
(1,519,000
)

$
(6,368,000
)

$
10,928,000


$
3,041,000  44




---



##### Table of Contents



Net
    Assets in Liquidation
    Stockholders equity as of
    December 31, 2005  going concern basis

$
327,078,000Increase due to estimated net
    realizable value of operating properties


180,852,000Increase due to estimated net
    realizable value of unconsolidated investment


4,895,000Decrease due to the write-off of
    intangible assets and liabilities


(57,847,000
)Liability for estimated costs in
    excess of estimated receipts during liquidation


(1,519,000
)Adjustment to reflect the change
    to the liquidation basis of accounting


126,381,000Estimated value of net assets in
    liquidation as of December 31, 2005

$
453,459,000     Properties
    Held for Sale
  Accounting for the Impairment or
    Disposal of Long Lived Assets
    Revenue
    Recognition and Allowance for Doubtful Accounts
   45




---



##### Table of Contents



Impairment
    
    significant negative industry or economic trend;
    a significant underperformance relative to historical or
    projected future operating results; and
    a significant change in the manner in which the asset is used.      Purchase
    Price Allocation
  Business Combinations lease-up
   46




---



##### Table of Contents



Deferred
    Assets
    Qualification
    as a REIT
      Factors
    Which May Influence Future Changes in Net Assets in
    Liquidation
  Rental
    Income
    Scheduled
    Lease Expirations
    Sarbanes-Oxley
    Act
   47




---



##### Table of Contents



and/or
  Changes
    in Net Assets in Liquidation
  For
    the Year Ended December 31, 2006
      Results
    of Operations
   48




---



##### Table of Contents



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


Favorable/


Percent2005


2004


(Unfavorable)


ChangeExpenses:General and administrative

$
4,006,000


$
2,419,000


$
(1,587,000
)


(65.61
)%Operating loss


(4,006,000
)


(2,419,000
)


(1,587,000
)


(65.61
)%Other (expense) income:Interest (including amortization
    of deferred financing costs)


(2,054,000
)


(1,243,000
)


(811,000
)


(65.25
)%Interest and dividend income


695,000



332,000



363,000



109.34
%Gain on sale of marketable
    securities, unconsolidated real estate and joint venture


572,000



1,231,000



(659,000
)


(53.53
)%Equity in earnings (losses) of
    unconsolidated real estate


1,337,000



(604,000
)


1,941,000



321.36
%Income taxes






(398,000
)


398,000



100.00
%Other expense, net


(250,000
)






(250,000
)


Loss from continuing operations
    before discontinued operations


(3,706,000
)


(3,101,000
)


(605,000
)


(19.51
)%Discontinued operations:Gain on sale of real estate


10,550,000







10,550,000



Income (loss) from discontinued
    operations


(4,215,000
)


1,225,000



(5,440,000
)


(444.08
)%6,335,000



1,225,000



5,110,000



417.14
%Net income (loss)

$
2,629,000


$
(1,876,000
)

$
4,505,000



240.14
%   General
    and Administrative Expenses
    Interest
    Expense
    Interest
    and Dividend Income
   49




---



##### Table of Contents



Gain on
    Sale of Marketable Securities, Unconsolidated Real Estate and
    Joint Venture
    Equity in
    Earnings (Losses) of Unconsolidated Real Estate
    Income
    Taxes
    Other
    Expense
    Loss From
    Continuing Operations
    Income
    (Loss) from Discontinued Operations
    Gain on
    Sale of Real Estate  Discontinued
    operations
   50




---



##### Table of Contents



Net
    Income (Loss)
    Liquidity
    and Capital Resources
    Current
    Sources of Capital and Liquidity
  and/or
    Factors
    Which May Influence Future Sources of Capital and
    Liquidity
  SEC
    Investigation
  In the matter of Triple Net Properties, LLC.
  and/or Accounting for Contingencies
  Prior
    Performance Tables
   51




---



##### Table of Contents



Form 8-K
  Debt
    Financing
      Weighted-AverageTotal Debt


Interest RateDecember 31,


December 31,2006


2005


2006


2005(Liquidation basis)


(Liquidation basis)Mortgage, credit facility and
    other debtMortgage

$
225,836,000


$
350,402,000



5.65
%


5.49
%Credit facility and other debt





$
60,964,000







6.40
%Fixed rate and variable rateFixed rate

$
196,321,000


$
269,062,000



5.32
%


5.28
%Variable rate

$
29,515,000


$
142,304,000



7.86
%


6.27
%        52




---



##### Table of Contents



Other
    Liquidity Needs
             53




---



##### Table of Contents



December 31,2006


2005


2004Ordinary income

$
2,829,000



1.40
%

$
3,333,000



10.12
%

$
12,774,000



48.36
%Capital gain










11,963,000



36.34
%






Return of capital


2,661,000



1.32
%


17,628,000



53.54
%


13,642,000



51.64
%Liquidating distributions


196,597,000



97.28
%














$
202,087,000



100.00
%

$
32,924,000



100.00
%

$
26,416,000



100.00
%         Cash
    Flows
  Years
    Ended December 31, 2005 and 2004
     54




---



##### Table of Contents



Capital
    Resources
  General
      and/or
    Financing
   55




---



##### Table of Contents



Unconsolidated
    Debt
     56




---



##### Table of Contents



Insurance
  Property
    Damage, Business Interruption, Earthquake and
    Terrorism
    Debt
    Service Requirements
    Year

Amount2007

$
34,169,0002008


1,041,0002009


30,495,0002010


1,556,0002011


23,994,000Thereafter


134,581,000$
225,836,000  57




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by Period (Liquidation Basis)Less Than








More Than1 Year


1-3 Years


3-5 Years


5 Years(2007)


(2008-2009)


(2010-2011)


(After 2011)


TotalPrincipal payments 
    variable rate debt

$
23,912,000


$
5,603,000


$



$



$
29,515,000Principal payments 
    fixed rate debt


10,257,000



25,933,000



25,550,000



134,581,000



196,321,000Interest payments 
    variable rate debt (based on rate in effect as of
    December 31, 2006)


1,003,000



393,000











1,396,000Interest payments 
    fixed rate debt


11,201,000



20,832,000



16,907,000



24,833,000



73,773,000Ground lease obligations(1)


















Tenant improvement and lease
    commission obligations


2,170,000















2,170,000Total

$
48,543,000


$
52,761,000


$
42,457,000


$
159,414,000


$
303,175,000     (1)
    
    The Sutter Square Galleria property is subject to a ground lease
    expiring in 2040 with one ten-year option period thereafter.
    Future minimum rents to be paid under this non-cancelable
    operating lease are computed at 12.5% of gross rents, as defined
    in the ground lease agreement.  Off-Balance
    Sheet Arrangements
    Inflation
    Funds
    from Operations
   58




---



##### Table of Contents



Year Ended


Year EndedDecember 31,


December 31,2005


2004Net income (loss)

$
2,629,000


$
(1,876,000
)Add:Depreciation and
    amortization  discontinued operations


38,519,000



34,730,000Depreciation and
    amortization  unconsolidated properties


195,000



1,457,000Less:Gain on sale of real estate and
    joint venture (net of related
    income tax)


(10,682,000
)


(493,000
)Funds from operations

$
30,661,000


$
33,818,000Weighted-average common shares
    outstanding  basic and diluted


43,867,000



37,336,000Gain on the sale of investments
    included in net income (loss)
    and FFO

$
440,000


$
251,000   Subsequent
    Events
   59




---



##### Table of Contents



Recently
    Issued Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes
  Fair Value
    Measurement
  Considering the Effects of Prior Year
    Misstatements When Quantifying Current Year Misstatements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
 60




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.      Expected Maturity Date2007


2008


2009


2010


2011


Thereafter


Total


Fair ValueFixed rate debt

$
10,257,000


$
964,000


$
24,969,000


$
1,556,000


$
23,994,000


$
134,581,000


$
196,321,000


$
196,321,000Average interest rate on maturing
    debt


5.89
%


5.37
%


5.47
%


5.32
%


5.21
%


5.27
%


5.32
%Variable rate debt

$
23,912,000


$
77,000


$
5,526,000


$



$



$



$
29,515,000


$
29,515,000Average interest rate on maturing
    debt (based on rate in effect as of December 31, 2006)


7.98
%


7.35
%


7.35
%














7.86
%    61




---



##### Table of Contents



Expected Maturity Date2006


2007


2008


2009


2010


Thereafter


Total


Fair ValueFixed rate debt

$
1,158,000


$
11,095,000


$
2,057,000


$
26,121,000


$
2,769,000


$
225,862,000


$
269,062,000


$
269,062,000Average interest rate on maturing
    debt


5.29
%


5.83
%


5.27
%


5.46
%


5.25
%


5.23
%


5.28
%Variable rate debt

$
117,810,000


$
18,974,000


$
142,000


$
5,378,000


$



$



$
142,304,000


$
142,304,000Average interest rate on maturing
    debt (based on rate in effect as of December 31, 2005)


6.16
%


7.18
%


5.54
%


5.54
%










6.27
%     Item 8.
    Financial
    Statements and Supplementary Data.    Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Evaluation of disclosure controls and
    procedures.
  Form 10-K Rules 13a-14(a) 15d-14(a) Form 10-K
  Rules 13a-15(e) 15d-15(e)
 62




---



##### Table of Contents



Changes in internal control over financial
    reporting.
  Item 9B.
    Other
    Information.   63




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Name

Age

Position

Term of OfficeAnthony W. Thompson(1)


60


Chairman of the Board of Directors

Since 2001Gary T. Wescombe


64


Director

Since 2001Edward A. Johnson


55


Director

Since 2001D. Fleet Wallace


39


Director

Since 2002W. Brand Inlow


53


Director

Since 2002Gary Hunt


58


Director

Since 2005Scott D. Peters(2)


49


Chief Executive Officer, President

Since 2005Courtney A. Brower


28


Chief Accounting Officer

Since 2006Talle A. Voorhies


59


Vice President

Since 2001Jack R. Maurer


63


Executive Vice President

Since 2001Andrea R. Biller


57


Secretary

Since 2004Executive Vice President

Since 2005     (1)
    
    Mr. Thompson previously served as our Chief Executive
    Officer and President from December 2001 until December 2005.(2)
    
    Mr. Peters previously served as our Executive Vice
    President and Chief Financial Officer from September 2004
    until December 2005.    Anthony W. (Tony) Thompson
  Gary T. Wescombe
 64




---



##### Table of Contents



Edward A. Johnson
  D. Fleet Wallace
  W. Brand Inlow
  Gary H. Hunt 110-year-old
 65




---



##### Table of Contents



Scott D. Peters
  Courtney A. Brower
  Talle A. Voorhies
  Jack R. Maurer
 66




---



##### Table of Contents



Andrea R. Biller
  Our
    Advisors Executive Officers
    Name

Age

Position

Term of OfficeScott D. Peters


49


Chief Executive Officer


Since 2006Louis J. Rogers


50


President


Since 2004Francene LaPoint


42


Chief Financial Officer


Since 2006Andrea R. Biller


57


General Counsel


Since 2003and Executive Vice President


Since 2007Jeffrey T. Hanson


37


Chief Investment Officer


Since 2006Richard T. Hutton, Jr.


55


Executive Vice President


Since 2003Jack R. Maurer


63


Executive Vice President


Since 1998Talle A. Voorhies


59


Executive Vice President and
    Secretary


Since 1998       Louis J. Rogers
  Francene LaPoint
 67




---



##### Table of Contents



Jeffrey T. Hanson
  Richard T. Hutton, Jr.
  NNN
    Realty Advisors and Triple Net Properties
    Fiduciary
    Relationship of our Advisor to Us
       68




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##### Table of Contents



Committees
    of the Board of Directors
  Audit
    Committee
    
    makes recommendations to our board of directors concerning the
    engagement of independent public accountants;
    reviews the plans and results of the audit engagement with the
    independent public accountants;
    approves professional services provided by, and the independence
    of, the independent public accountants;
    considers the range of audit and non -audit fees;
    consults with the independent public accountants regarding the
    adequacy of the internal accounting controls; and
    periodically meets with representatives of our disclosure
    committee on various subjects within the scope of the disclosure
    committees charter (the disclosure committee is comprised
    of representatives of our management).  expert
      Executive
    Compensation Committee
    Special
    Committee
   69




---



##### Table of Contents



Compensation
    of Directors
    
    $1,000 per regular monthly board of directors meeting,
    whether in person or by telephone;
    $500 per committee meeting, whether in person or by
    telephone, unless the committee meeting follows a regularly
    scheduled monthly board meeting; and
    an additional $500 per committee meeting to the committee
    chairperson for each meeting attended in person or by telephone.        Change inPension Valueand NonqualifiedFees Earned








Non-Equity


Deferred


All Otheror Paid


Stock


Option


Incentive Plan


Compensation


CompensationName

in Cash ($)


Awards ($)


Awards ($)


Compensation ($)


Earnings ($)


($)


Total ($)(a)

(b)(1)


(c)


(d)


(e)


(f)


(g)(3)


(h)Anthony W. Thompson(2)

$



$



$



$



$



$



$
Gary T. Wescombe

$
29,500


















$
25,000


$
54,500Edward A. Johnson

$
28,500


















$
25,000


$
53,500D. Fleet Wallace

$
30,000


















$
25,000


$
55,000W. Brand Inlow

$
30,000


















$
25,000


$
55,000Gary H. Hunt

$
25,500


















$
25,000


$
50,500     (1)
    
    Consists of the amounts described below.  Basic AnnualRetainer


Meeting FeesDirector

Role

($)


($)Thompson

Chairman of the Board

$



$
Wescombe

Member, Audit Committee Chairman

$
15,000


$
14,500Johnson

Member

$
15,000


$
13,500Wallace

Member

$
15,000


$
15,000Inlow

Member, Audit Committee

$
15,000


$
15,000Hunt

Member, Audit Committee

$
15,000


$
10,500   (2)
    
    Mr. Thompson is not an independent director.(3)
    
    Our independent directors will become entitled to receive
    milestone payments, if they remain a member of our board of
    directors and the special committee, of $25,000 on each of
    December 31, 2006 and December 31, 2007, as well as a
    milestone payment of $50,000 when we have made aggregate
    liquidating distributions of at least $11.00 per share to our
    stockholders. Assuming that these directors receive the maximum
    amount of milestone payments, they will each receive aggregate
    payments of up to $100,000.  Independent
    Director Stock Option Plan
   70




---



##### Table of Contents



Officer
    and Employee Stock Option Plan
    2004
    Incentive Award Plan
      Number


Fair ValueNonvested Restricted Shares at

of Shares


of SharesNonvested as of December 31,
    2005


51,000


$
10.00Vested


(51,000
)


(10.00
)Nonvested as of December 31,
    2006





$
   Share-Based Payment
 71




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##### Table of Contents



Section 16(a)
    Beneficial Ownership Reporting Compliance
      Code of
    Business Conduct and Ethics
    Item 11.
    Executive
    Compensation.  Compensation
    of Executive Officers
  and/or and/or
  SUMMARY
    COMPENSATION TABLE
  Change in PensionValue andNonqualifiedName
















Non-Equity


Deferred


Alland










Stock


Option


Incentive Plan


Compensation


OtherPrincipal




Salary


Bonus


Awards


Awards


Compensation


Earnings


Compensation


TotalPosition

Fiscal Year


($)


($)


($)


($)


($)


($)


($)


($)(a)

(b)


(c)


(d)


(e)


(f)


(g)


(h)


(i)


(j)Scott D. Peters,


2006


$



$



$



$



$



$



$
200,000
(1)

$
200,000Chief Executive Officer


2005































and President


2004































Courtney A. Brower,


2006































Chief Accounting Officer


2005































2004































Andrea R. Biller,


2006


























$
100,000
(1)

$
100,000Executive Vice President


2005































and Secretary


2004































     (1)
    
    In accordance with our plan of liquidation approved by our
    stockholders, we will pay Scott D. Peters, our Chief Executive
    Officer and President, and Andrea R. Biller, our Executive Vice
    President and Secretary, retention bonuses of $50,000 and
    $25,000, respectively, upon the filing of each of our annual and
    quarterly reports with the SEC during the period of the
    liquidation process, beginning with the annual report for the
    year ending December 31, 2005. As of December 31,
    2006, Mr. Peters and Ms. Biller have 72




---



##### Table of Contents



received retention bonuses of $200,000 and $100,000 from us,
    respectively. Additionally, our Advisor will pay to each of
    Scott D. Peters and Andrea R. Biller a performance-based bonus
    of $100,000 upon the receipt by our Advisor of net commissions
    aggregating $5,000,000 or more from the sale of our properties.
    As of December 31, 2006, Mr. Peters and
    Ms. Biller have not received their performance-based
    bonuses of $100,000 each from our Advisor.  Option/SAR
    Grants in Last Fiscal Year
    Compensation
    Committee Interlocks and Insider Participation
    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.  PRINCIPAL
    STOCKHOLDERS
    Number of Shares ofCommon Stock


Percent ofName of Beneficial Owner

Beneficially Owned(1)


ClassAnthony W. Thompson, Chairman


29,313
(2)


*Gary T. Wescombe, Director


10,000



*Edward A. Johnson, Director


10,000



*D. Fleet Wallace, Director


10,000



*W. Brand Inlow, Director


10,000



*Gary H. Hunt, Director


5,000



*All Executive Officers as a Group
    (6 persons)


20,00094,313



*     *
    
    Represents less than 1.0% of the outstanding common stock.(1)
    
    All outstanding options were forfeited on February 27, 2006
    pursuant to the adoption of our plan of liquidation by
    stockholders.(2)
    
    Includes 6,175 shares of our common stock owned by AWT
    Family LP, a limited partnership 70.0% owned by
    Mr. Thompson and 23,138 shares of our common stock
    owned by our Advisor.  Equity
    Compensation Plan Information
    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.  day-to-day
 73




---



##### Table of Contents



Advisory
    Agreement
    month-to-month
    Real
    Estate Acquisition Fee
   74




---



##### Table of Contents



Real
    Estate Disposition Fee
    Lease
    Commissions
    Property
    Management Fees
    Incentive
    Distributions
    Retention
    Bonuses and Milestone Payments
     75




---



##### Table of Contents



Dealer
    Manager Agreement
    Real
    Estate Commissions
    Related
    Party Accounts Receivable/Payable
    Unconsolidated
    Debt Due to Related Parties
    Cunningham
    Lending Group, LLC
    Triple
    Net Properties, LLC
    Business
    Relationships with Legal Counsel
    Item 14.
    Principal
    Accounting Fees and Services.   76




---



##### Table of Contents



Services

2006


2005Audit Fees(1)

$
636,000


$
574,000Audit-Related Fees(2)






Tax Fees(3)


68,000



85,000All Other Fees






Total

$
704,000


$
659,000     (1)
    
    Audit fees billed in 2006 and 2005 consisted of the audit of our
    annual financial statements, acquisition audits, reviews of our
    quarterly financial statements, and statutory and regulatory
    audits, consents and other services related to filings with the
    SEC.(2)
    
    Audit-related fees billed in 2006 and 2005 consisted of
    financial accounting and reporting consultations.(3)
    
    Tax services billed in 2006 and 2005 consisted of tax compliance
    and tax planning and advice.      
    consultations and consents related to SEC filings and
    registration statements;
    consultation of accounting matters; and
    tax planning and tax compliance for the U.S. income and
    other taxes.   77




---



##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules.  Financial Statements:
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


79Consolidated
    Statements of Net Assets as of December 31, 2006 and 2005
    (Liquidation Basis)


80Consolidated
    Statement of Changes in Net Assets (Liquidation Basis) For the
    Year Ended  December 31, 2006


81Consolidated
    Statements of Operations and Comprehensive Income (Loss) (Going
    Concern Basis)  For the Years Ended December 31, 2005 and
    2004


82Consolidated
    Statements of Stockholders Equity (Going Concern Basis)
    For the Years Ended December 31, 2005 and 2004


83Consolidated
    Statements of Cash Flows (Going Concern Basis) For the Years
    Ended  December 31, 2005 and 2004


84Notes to
    Consolidated Financial Statements


85Schedules


119   Financial Statement Schedules:
    PageValuation and
    Qualifying Accounts (Schedule II)


119Real Estate
    Operating Properties and Accumulated Depreciation
    (Schedule III)


120     Exhibits:
    Exhibits:
    Financial Statement Schedules:
  PageValuation and
    Qualifying Accounts (Schedule II)


119Real Estate
    Operating Properties and Accumulated Depreciation
    (Schedule III)


120  78




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   
          Deloitte ouche
   
 79




---



##### Table of Contents



G REIT,
    INC.
 CONSOLIDATED
    STATEMENTS OF NET ASSETS
    (Liquidation Basis)
    As of December 31, 2006 and 2005  December 31,


December 31,2006


2005ASSETSReal estate investments:Real estate held for sale

$
417,384,000


$
835,474,000Investments in unconsolidated real
    estate


15,889,000



16,578,000433,273,000



852,052,000Cash and cash equivalents


76,812,000



7,173,000Restricted cash


8,555,000



14,288,000Investment in marketable securities






7,617,000Accounts receivable, net


5,025,000



5,974,000Accounts receivable from related
    parties


199,000



395,000Asset for estimated receipts in
    excess of estimated costs during liquidation


3,041,000



Total assets


526,905,000



887,499,000LIABILITIESMortgages payable secured by
    properties held for sale


225,836,000



350,402,000Credit facility secured by
    properties held for sale and other debt






60,964,000Accounts payable and accrued
    liabilities


8,526,000



14,140,000Accounts payable due to related
    parties


1,175,000



2,026,000Security deposits and prepaid rent


2,629,000



4,989,000Liability for estimated costs in
    excess of estimated receipts during liquidation






1,519,000Total liabilities


238,166,000



434,040,000Commitments and contingencies
    (Note 15)Net assets in liquidation

$
288,739,000


$
453,459,000    80




---



##### Table of Contents



G REIT,
    INC.
  CONSOLIDATED STATEMENT OF CHANGES IN NET
    ASSETS
 (Liquidation Basis)
 For the Year Ended December 31, 2006
  Year EndedDecember 31,2006Net assets in liquidation,
    beginning of period

$
453,459,000Changes in net assets in
    liquidation:Changes to liability for estimated
    costs in excess of estimated receipts during liquidation:Operating income


(25,716,000
)Distributions received from
    unconsolidated properties


(1,388,000
)Payments of liquidation costs and
    other amounts


12,501,000Distributions to stockholders


8,235,000Change in estimated costs in
    excess of estimated receipts during liquidation


10,928,000Change to liability for estimated
    costs in excess of estimated receipts during liquidation


4,560,000Change in fair value of assets and
    liabilities:Change in fair value of marketable
    securities


(132,000
)Change in fair value of real
    estate investments


17,266,000Change in assets and liabilities
    due to activity in liability for estimated costs in excess of
    estimated receipts during liquidation


6,368,000Net increase in fair value


23,502,000Liquidating distributions to
    stockholders


(192,782,000
)Change in net assets in
    liquidation


(164,720,000
)Net assets in liquidation, end
    of period

$
288,739,000    81




---



##### Table of Contents



G REIT,
    INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS AND
    COMPREHENSIVE INCOME (LOSS)
 (Going Concern Basis)
 For the Years Ended December 31, 2005 and 2004
  Year Ended December 31,2005


2004Expenses:General and administrative

$
4,006,000


$
2,419,000Operating loss


(4,006,000
)


(2,419,000
)Other (expense) income:Interest expense (including
    amortization of deferred financing costs)


(2,054,000
)


(1,243,000
)Interest and dividend income


695,000



332,000Gain on sale of marketable
    securities, unconsolidated real estate and joint venture


572,000



1,231,000Equity in earnings (losses) of
    unconsolidated real estate


1,337,000



(604,000
)Income taxes






(398,000
)Other expense, net


(250,000
)


Loss from continuing operations
    before discontinued operations


(3,706,000
)


(3,101,000
)Discontinued operations:Gain on sale of real estate


10,550,000



Income (loss) from discontinued
    operations


(4,215,000
)


1,225,0006,335,000



1,225,000Net income (loss)

$
2,629,000


$
(1,876,000
)Comprehensive income (loss):Net income (loss)

$
2,629,000


$
(1,876,000
)Unrealized gain on marketable
    securities


78,000



55,000Comprehensive income (loss)

$
2,707,000


$
(1,821,000
)Net income (loss) per common share:Continuing operations 
    basic and diluted

$
(0.08
)

$
(0.08
)Discontinued
    operations  basic and diluted

$
0.14


$
0.03Total net income (loss) per common
    share  basic and diluted

$
0.06


$
(0.05
)Weighted-average number of common
    shares outstanding  basic and diluted


43,867,000



37,336,000Distributions declared per share

$
0.75


$
0.75Distributions declared

$
32,888,000


$
28,042,000    82




---



##### Table of Contents



G REIT,
    INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY(Going Concern Basis)
    For the Years Ended December 31, 2005 and 2004
  Common StockCommon





Distributions


AccumulatedNumber of


Stock Par


Additional


in Excess


ComprehensiveShares


Value


Paid-In Capital


of Earnings


Income


TotalBALANCE 
    December 31, 2003


17,562,000


$
176,000


$
156,733,000


$
(6,387,000
)

$



$
150,522,000Net loss














(1,876,000
)






(1,876,000
)Unrealized gain on marketable
    securities


















55,000



55,000Stock based compensation expense










257,000











257,000Issuance of common stock, net of
    offering costs of $26,050,000


26,303,000



263,000



235,846,000











236,109,000Distributions














(28,042,000
)






(28,042,000
)BALANCE 
    December 31, 2004


43,865,000



439,000



392,836,000



(36,305,000
)


55,000



357,025,000Net income














2,629,000







2,629,000Unrealized gain on marketable
    securities


















78,000



78,000Vesting of restricted stock and
    stock based compensation expense


4,000







234,000











234,000Distributions














(32,888,000
)






(32,888,000
)BALANCE 
    December 31, 2005


43,869,000


$
439,000


$
393,070,000


$
(66,564,000
)

$
133,000


$
327,078,000    83




---



##### Table of Contents



G REIT,
    INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Going Concern Basis)
    For the Years Ended December 31, 2005 and 2004
  Year Ended December 31,2005


2004CASH FLOWS FROM OPERATING
    ACTIVITIESNet income (loss)

$
2,629,000


$
(1,876,000
)Adjustments to reconcile net income
    (loss) to net cash provided by operating activities:Gain on sale of real estate


(10,550,000
)


Gain on sale of marketable
    securities, unconsolidated real estate and joint venture


(572,000
)


(1,231,000
)Depreciation and amortization
    (including deferred financing costs and above/below market
    leases and deferred rent)


34,536,000



29,529,000Swap collar interest


226,000



(347,000
)Stock compensation expense


234,000



257,000Distributions received in excess of
    equity in earnings from investments in unconsolidated real estate


56,000



2,256,000Minority interests


(183,000
)


(9,000
)Change in operating assets and
    liabilities:Accounts receivable


(1,374,000
)


1,543,000Other assets


(2,475,000
)


(468,000
)Accounts payable and accrued
    liabilities


(2,773,000
)


9,072,000Security deposits and prepaid rent


(57,000
)


1,179,000Net cash provided by operating
    activities


19,697,000



39,905,000CASH FLOWS FROM INVESTING
    ACTIVITIESPurchase of real estate operating
    properties


(18,419,000
)


(550,530,000
)Purchase of investments in
    unconsolidated real estate and joint venture






(20,000,000
)Capital expenditures


(12,158,000
)


(7,583,000
)Proceeds from sale of real estate
    operating property


113,014,000



Proceeds from sale of
    unconsolidated real estate


273,000



Purchases of marketable securities


(23,849,000
)


(12,065,000
)Proceeds from sales of marketable
    securities


18,910,000



10,210,000Proceeds from sale of joint venture






21,000,000Restricted cash


2,661,000



(4,250,000
)Real estate and escrow deposits






Net cash provided by (used in)
    investing activities


80,432,000



(563,218,000
)CASH FLOWS FROM FINANCING
    ACTIVITIESProceeds from issuance of common
    stock, net






236,109,000Borrowings under credit facility,
    mortgages payable and other debt


185,806,000



394,537,000Principal repayments under credit
    facility, mortgages payable and other debt


(262,905,000
)


(72,684,000
)Refund (payment) of deferred
    financing costs


310,000



(5,927,000
)Minority interests contributions






23,000Minority interests distributions


(674,000
)


(376,000
)Distributions


(32,888,000
)


(26,335,000
)Net cash (used in) provided by
    financing activities


(110,351,000
)


525,347,000NET (DECREASE) INCREASE IN CASH AND
    CASH EQUIVALENTS


(10,222,000
)


2,034,000CASH AND CASH
    EQUIVALENTS  beginning of year


17,567,000



15,533,000CASH AND CASH
    EQUIVALENTS  end of year

$
7,345,000


$
17,567,000SUPPLEMENTAL DISCLOSURE OF CASH
    FLOW INFORMATION:Cash paid during the year for:Interest

$
26,616,000


$
14,212,000Income taxes

$



$
428,000NONCASH INVESTING AND FINANCING
    ACTIVITIES:Investing Activities:Accrual for tenant improvements and
    capital expenditures

$
242,000


$
The following represents the change
    in certain assets and liabilities in connection with our
    acquisitions and dispositions of operating properties:Real estate deposits applied

$



$
2,600,000Financing Activities:Refinancing of property

$



$
11,605,000Issuance of common stock for
    dividends reinvested

$



$
3,129,000    84




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 For
    the Years Ended December 31, 2006, 2005 and 2004
  The use of the words we, us or
    our refers to G REIT, Inc. and its subsidiaries,
    including G REIT, L.P., or our Operating Partnership, except
    where the context otherwise requires.
  1.
    Organization
    and Description of Business      day-to-day month-to-month
    2.
    Plan of
    Liquidation   85




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        3.
    Summary
    of Significant Accounting Policies    Use of
    Estimates
    Principles
    of Consolidation
  Consolidation of
    Variable Interest Entities,
 86




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Liquidation
    Basis of Accounting
  tenants-in-common,
    Operating
    Properties
        Property
    Held for Sale
  Accounting for Impairment or Disposal of
    Long-Lived Assets
 87




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        
    management, having the authority to approve the action,
    committed to a plan to sell the asset;
    the asset was available for immediate sale in its present
    condition subject only to terms that are usual and customary for
    sales of such assets;
    an active program to locate a buyer and other actions required
    to complete the plan to sell the asset had been initiated;
    the sale of the asset was probable and the transfer of the asset
    was expected to qualify for recognition as a completed sale
    within one year;
    the asset was being actively marketed for sale at a price that
    was reasonable in relation to its current fair value; and
    given the actions required to complete the plan, it was unlikely
    that significant changes to the plan would be made or that the
    plan would be withdrawn.  Cash
    and Cash Equivalents
    Restricted
    Cash
    Investments
    in Marketable Securities
  available-for-sale.
 88




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Minority
    Interests
    Purchase
    Price Allocation
  Business Combinations lease-up
        Tenant
    Receivables and Allowance for Uncollectible
    Accounts
   89




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Real
    Estate Deposits
    Other
    Assets
    Deferred
    Financing Costs
    Derivative
    Financial Instruments
    Derivative Instruments and Hedging
    Activities.
  Revenue
    Recognition
  Accounting for
    Leases,
 90




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Concentration
    of Credit Risk
      Fair
    Value of Financial Instruments
  Disclosures About Fair Value of
    Financial Instruments
   91




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Income
    Taxes
      Comprehensive
    Income
  Reporting Comprehensive Income.
  Per
    Share Data
  Earnings Per Share.
 92




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2005


2004Loss from continuing operations

$
(3,706,000
)

$
(3,101,000
)Gain on sale of real estate


10,550,000



Income (loss) from discontinued
    operations


(4,215,000
)


1,225,000Net income (loss)

$
2,629,000


$
(1,876,000
)Net income (loss) per
    share  basic and diluted:Continuing operations

$
(0.08
)

$
(0.08
)Discontinued operations


0.14



0.03Total net income (loss) per
    share  basic and diluted

$
0.06


$
(0.05
)Weighted-average number of shares
    outstanding  basic and diluted


43,867,000



37,336,000   Stock
    Based Compensation
  Accounting for Stock-Based
    Compensation Accounting for
    Stock-Based Compensation Transition and Disclosure Accounting for Stock Issued to Employees
  Year Ended December 31,2005


2004Reported net income (loss)

$
2,629,000


$
(1,876,000
)Add: Stock based employee
    compensation expense included in
    reported net income


162,000



257,000Less: Total stock based employee
    compensation expense determined under fair value based method
    for all awards


(183,000
)


(196,000
)Pro forma net income (loss)

$
2,608,000


$
(1,815,000
)Reported net income (loss) per
    share  basic and diluted

$
0.06


$
(0.05
)Pro forma net income (loss) per
    share  basic and diluted

$
0.06


$
(0.05
)   10-year
   93




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Share-Based Payment
  Asset
    Retirement Obligations
  Accounting for
    Conditional Asset Retirement Obligations Accounting for Asset Retirement
    Obligations and/or
  Segments
    Recently
    Issued Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes
  Fair Value
    Measurement
  Considering the Effects of Prior Year
    Misstatements When Quantifying Current Year Misstatements
 94




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##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  4.
    Asset
    (Liability) for Estimated Receipts (Costs) in Excess of
    Estimated (Costs) Receipts During Liquidation    December 31,


Cash Payments


Change in


December 31,2005


and (Receipts)


Estimates


2006Assets:Estimated net inflows from
    consolidated and unconsolidated operating activities

$
24,390,000


$
(27,104,000
)

$
15,138,000


$
12,424,000Liabilities:Liquidation costs


(4,418,000
)


2,697,000



(3,570,000
)


(5,291,000
)Distributions to stockholders


(8,226,000
)


8,235,000



(9,000
)


Capital expenditures


(13,265,000
)


9,804,000



(631,000
)


(4,092,000
)(25,909,000
)


20,736,000



(4,210,000
)


(9,383,000
)Total asset (liability) for
    estimated receipts (costs) in excess of estimated (costs)
    receipts during liquidation

$
(1,519,000
)

$
(6,368,000
)

$
10,928,000


$
3,041,000    95




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    5.
    Net
    Assets in Liquidation    Stockholders equity as of
    December 31, 2005  going concern basis

$
327,078,000Increase due to estimated net
    realizable value of operating properties


180,852,000Increase due to estimated net
    realizable value of unconsolidated investment


4,895,000Decrease due to the write-off of
    intangible assets and liabilities


(57,847,000
)Liability for estimated costs in
    excess of estimated receipts during liquidation


(1,519,000
)Adjustment to reflect the change
    to the liquidation basis of accounting


126,381,000Estimated value of net assets in
    liquidation as of December 31, 2005

$
453,459,000        96




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Real
    Estate Investments      Dispositions
    in 2006
    600 B
    Street  San Diego, California
    Hawthorne
    Plaza  San Francisco, California
    AmberOaks 
    Austin, Texas
    Brunswig
    Square  Los Angeles, California
   97




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Centerpoint
    Corporate Park  Kent, Washington
    5508
    Highway 290  Austin, Texas
    Department
    of Children and Family Campus  Plantation,
    Florida
    Public
    Ledger Building  Philadelphia,
    Pennsylvania
    Atrium
    Building  Lincoln, Nebraska
    Gemini
    Plaza  Houston, Texas
   98




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Properties
    Under Contract
        Dispositions
    in 2005
   99




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   525 B
    Street  San Diego, California
    Park
    Sahara  Las Vegas, Nevada
    Acquisitions
    in 2005
    Opus
    Plaza at Ken Caryl  Littleton, Colorado
    Eaton
    Freeway  Phoenix, Arizona
    Acquisitions
    in 2004
   100




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     BorrowingOwnership


Purchase


Incurred at


Square


CommissionProperty Description

Location

Purchase Date

Percentage


Price


Acquisition(1)


Feet


to Realty(2)AmberOaks Corporate Center

Austin, TX

January 20, 2004


100.0
%

$
35,525,000


$
14,250,000



282,000


$
909,000Public Ledger Building

Philadelphia, PA

February 13, 2004


100.0
%


33,950,000



25,000,000



472,000



965,000Madrona Buildings

Torrance, CA

March 31, 2004


100.0
%


45,900,000



28,458,000



211,000



1,350,000Brunswig Square

Los Angeles, CA

April 5, 2004


100.0
%


23,805,000



15,830,000



136,000



716,000North Belt Corporate Center

Houston, TX

April 8, 2004


100.0
%


12,675,000







156,000



400,000Hawthorne Plaza

San Francisco, CA

April 20, 2004


100.0
%


97,000,000



62,750,000



419,000



2,900,000Pacific Place

Dallas, TX

May 26, 2004


100.0
%


29,900,000







324,000



897,000525 B Street  Golden
    Eagle

San Diego, CA

June 14, 2004


100.0
%


96,310,000



69,943,000



424,000



1,445,000600 B Street  Comerica

San Diego, CA

June 14, 2004


100.0
%


77,190,000



56,057,000



339,000



1,158,000Western Place I & II

Fort Worth, TX

July 23, 2004


78.50
%(3)


33,500,000



24,000,000



429,000



1,000,000Pax River Office Park

Lexington Park, MD

August 6, 2004


100.0
%


14,000,000







172,000



420,000One Financial Plaza

St. Louis, MO

August 6, 2004


77.6
%(3)


37,000,000



30,750,000



434,000



1,155,000Totals









$
536,755,000


$
327,038,000



3,798,000


$
13,315,000     (1)
    
    Represents the amount of the mortgage loan assumed by us upon
    the closing of the acquisition by us or newly placed on the
    property at closing.(2)
    
    Realty, an affiliate of our Advisor, which was solely owned by
    Anthony W. Thompson, through December 31, 2004 (At
    December 31, 2005, Mr. Thompson owned 84.0% of Realty).(3)
    
    Our TIC ownership interest.   101




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Investments
    in Unconsolidated Real Estate
      Year Ended December 31,2005


2004Revenues

$
20,512,000


$
19,104,000Rental and other expenses


16,195,000



21,888,000Net income (loss)

$
4,317,000


$
(2,784,000
)Our equity in earnings (loss)

$
1,337,000


$
(604,000
)   7.
    Restricted
    Cash    8.
    Investment
    in Marketable Equity Securities    9.
    Mortgage
    Loans Payable     102




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Year

Amount2007

$
34,169,0002008


1,041,0002009


30,495,0002010


1,556,0002011


23,994,000Thereafter


134,581,000$
225,836,000     Derivative
    Instruments and Hedging Activities
  10.
    Credit
    Facility and Other Debt  Credit
    Facility
     103




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Other
    Debt
   104




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Minority
    Interests        12.
    Stockholders
    Equity  Common
    Stock
         105




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Dividend
    Reinvestment Program
    Share
    Repurchase Plan
      Stock
    Option Plans
  Independent
    Director Stock Option Plan
   106




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Officer
    and Employee Stock Option Plan
    Range of


WeightedNumber


Exercise


AverageOptions Outstanding at

of Shares


Prices


Exercise PriceDecember 31, 2004 (85,000
    options exercisable)


420,000


$
9.00-$9.05


$
9.00Granted










Cancelled










December 31, 2005 (105,000
    options exercisable)


420,000


9.00-$
9.05



9.00Granted










Cancelled


(420,000
)


(9.00-9.05
)


(9.00
)December 31, 2006





$



$
   2004
    Incentive Award Plan
      Number


Fair ValueNonvested Restricted Shares at

of Shares


of SharesNonvested as of December 31,
    2005


51,000


$
10.00Vested


(51,000
)


(10.00
)Nonvested as of December 31,
    2006





$
  107




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-Based Payment
  13.
    Future
    Minimum Rent  Rental
    Income
    Year Ending

Amount2007

$
48,175,0002008


39,543,0002009


36,825,0002010


30,800,0002011


25,333,000Thereafter


38,272,000Total

$
218,948,000     14.
    Related
    Party Transactions  Advisory
    Agreement
  Advisory
    Fees
  month-to-month day-to-day
   108




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Real
    Estate Acquisition Fee
    Real
    Estate Disposition Fee
    Lease
    Commissions
    Property
    Management Fees
    Incentive
    Distributions
    Retention
    Bonuses and Milestone Payments
   109




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Real
    Estate Commissions
    Related
    Party Accounts Receivable/Payable
    Unconsolidated
    Debt Due to Related Parties
    Cunningham
    Lending Group, LLC
    Triple
    Net Properties, LLC
    Offering
    Expenses
  Selling
    Commissions
   110




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Marketing
    and Due Diligence Expense Reimbursement Fees
    Organization
    and Offering Expenses
    Business
    Relationships with Legal Counsel
    Joint
    Venture
  NNN/GREIT-TRS
  15.
    Commitments
    and Contingencies  Operating
    Leases
     111




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   40-year 40-year
    SEC
    Investigation
  In the matter of Triple Net Properties, LLC.
  and/or Accounting for Contingencies.
  Prior
    Performance Tables
   112




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Form 8-K
  Litigation
    Environmental
    Matters
    Unconsolidated
    Debt
       113




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Other
    16.
    Discontinued
    Operations  Properties Held for Sale  Accounting for the Impairment or
    Disposal of Long-Lived Assets
  Property

Date Purchased

Date Sold5508 West Highway 290 Building

September 13, 2002

November 14, 2006Two Corporate Plaza

November 27, 2002

Atrium Building

January 31, 2003

December 15, 2006Department of Children and Family

April 25, 2003

November 15, 2006Gemini Plaza

May 2, 2003

December 29, 2006Bay View Plaza

July 31, 2003

North Pointe Corporate Center

August 11, 2003

824 Market St.

October 10, 2003

Sutter Square Galleria

October 28, 2003

One World Trade Center

December 5, 2003

Centerpoint Corporate Park

December 30, 2003

October 17, 2006AmberOaks Corporate Center

January 20, 2004

September 29, 2006Public Ledger Building

February 13, 2004

November 22, 2006Madrona Buildings

March 31, 2004

Brunswig Square

April 5, 2004

October 6, 2006North Belt Corporate Center

April 8, 2004

Hawthorne Plaza

April 20, 2004

September 14, 2006Pacific Place

May 26, 2004

525 B Street  Golden
    Eagle

June 14, 2004

August 10, 2005600 B Street  Comerica

June 14, 2004

July 18, 2006Western Place I & II

July 23, 2004

Pax River Office Park

August 6, 2004

One Financial Plaza

August 6, 2004

Opus Plaza at Ken Caryl

September 12, 2005

Eaton Freeway Industrial Park

October 21, 2005

   114




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years EndedDecember 31,


December 31,2005


2004RevenuesRental income

$
118,912,000


$
94,911,000Interest income


216,000



91,000119,128,000



95,002,000ExpensesRental expenses


56,310,000



41,245,000Depreciation and amortization


39,027,000



34,832,000Interest expense (including
    amortization of deferred 
    financing costs)


28,189,000



17,709,000Minority interest


(183,000
)


(9,000
)Income (loss) from discontinued
    operations  properties held for sale, net


(4,215,000
)


1,225,000Gain on sale of real estate


10,550,000



$
6,335,000


$
1,225,000   Intangible
    Assets
      Intangible
    Liabilities
      17.
    Tax
    Treatment of Distributions    December 31,2006


2005


2004Ordinary income

$
2,829,000



1.40
%

$
3,333,000



10.12
%

$
12,774,000



48.36
%Capital gain










11,963,000



36.34
%






Return of capital


2,661,000



1.32
%


17,628,000



53.54
%


13,642,000



51.64
%Liquidating distributions


196,597,000



97.28
%














$
202,087,000



100.00
%

$
32,924,000



100.00
%

$
26,416,000



100.00
%  115




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    18.
    Business
    Combinations      19.
    Selected
    Quarterly Financial Data (Unaudited)    Liquidation BasisQuarters EndedDecember 31,


September 30,


June 30,


March 31,2006


2006


2006


2006Net assets in liquidation,
    beginning of period

$
462,193,000


$
473,518,000


$
454,184,000


$
453,459,000Change to asset (liability) for
    estimated receipts (costs) in excess of estimated (costs)
    receipts during liquidation


5,796,000



(542,000
)


(314,000
)


(380,000
)Net increase (decrease) in fair
    value


(2,938,000
)


(2,549,000
)


27,884,000



1,105,000Distributions to stockholders


(176,312,000
)


(8,234,000
)


(8,236,000
)


Change in net assets in liquidation


(173,454,000
)


(11,325,000
)


19,334,000



725,000Net assets in liquidation, end of
    period

$
288,739,000


$
462,193,000


$
473,518,000


$
454,184,000   116




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Going Concern BasisQuarters EndedDecember 31,


September 30,


June 30,


March 31,2005


2005


2005


2005General and administrative expenses

$
1,874,000


$
609,000


$
975,000


$
548,000Loss before other expense and
    discontinued operations


(1,874,000
)


(609,000
)


(975,000
)


(548,000
)Other expense


(256,000
)


(194,000
)


(411,000
)


(176,000
)Equity in earnings of
    unconsolidated real estate


340,000



311,000



533,000



153,000Loss from continuing operations


(1,790,000
)


(492,000
)


(853,000
)


(571,000
)Income (loss) from discontinued
    operations


(1,377,000
)


8,852,000



(1,793,000
)


653,000Net income (loss)

$
(3,167,000
)

$
8,360,000


$
(2,646,000
)

$
82,000Net income (loss) per common
    share  basic and diluted

$
(0.07
)

$
0.19


$
(0.06
)

$
0.00Weighted-average number of common
    shares outstanding  basic and diluted


43,869,000



43,869,000



43,865,000



43,865,000   20.
    Subsequent
    Events       117




---



##### Table of Contents



G REIT,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     118




---



##### Table of Contents



G REIT,
    INC.
  SCHEDULE VALUATION AND QUALIFYING ACCOUNTS
  AdditionsBalance at


Charged to


Charged to





Balance atBeginning of


Costs and


Other





End ofDescription

Period


Expenses


Accounts


Deductions


PeriodYear Ended December 31,
    2005  Reserve deducted from accounts receivable

$
321,000


$



$



$
(321,000
)

$
Year ended December 31,
    2004  Reserve deducted from accounts receivable

$
150,000


$
212,000


$



$
(41,000
)

$
321,000  119




---



##### Table of Contents



G REIT,
    INC.
  SCHEDULE III 
    REAL ESTATE OPERATING PROPERTIES AND ACCUMULATED
    DEPRECIATION
  Initial Costs to Company


Gross Amounts at Which Carried at Close of PeriodBuildings











Netand





Buildings and


Accumulated


Liquidation





DateEncumbrance


Land


Improvements


Land


Improvements


Depreciation(2)


Adjustment(1)


Total


ConstructedTwo Corporate Plaza (Office), Clear
    Lake, TX

$
9,644,000


$
1,748,000


$
12,388,000


$
1,748,000


$
13,024,000


$
(2,180,000
)





$
12,592,000



1989Bay View Plaza (Office), Alameda, CA


5,810,000



1,879,000



9,044,000



1,879,000



9,057,000



(869,000
)






10,067,000



2001North Pointe (Office), Sacramento,
    CA






1,979,000



22,224,000



1,979,000



22,255,000



(1,511,000
)






22,723,000



1988824 Market (Office), Wilmington, DE


18,367,000



6,406,000



26,832,000



6,406,000



30,187,000



(2,840,000
)






33,753,000



1984Sutter Square (Office), Sacramento,
    CA


5,000,000







8,414,000







8,483,000



(581,000
)






7,902,000



1987One World Trade Center (Office),
    Long Beach, CA


90,000,000



22,851,000



92,211,000



22,851,000



94,295,000



(9,938,000
)






107,208,000



1989Madrona Buildings (Office),
    Torrance, CA


33,000,000



12,581,000



28,047,000



12,581,000



29,498,000



(1,822,000
)






40,257,000



1990North Belt Corporate (Office),
    Houston, TX


9,740,000



692,000



9,167,000



692,000



10,907,000



(780,000
)






10,819,000



1982Pacific Place (Office),
    Dallas, TX






1,230,000



24,646,000



1,230,000



26,360,000



(1,372,000
)






26,218,000



1982Western Place I & II
    (Office), Fort Worth, TX


24,000,000



2,397,000



27,652,000



2,397,000



30,055,000



(1,517,000
)






30,935,000



1980Pax River (Office), Lexington Park,
    MD






1,661,000



12,163,000



1,661,000



12,264,000



(482,000
)






13,443,000



1983One Financial Plaza (Office),
    St. Louis, MO


30,750,000



2,973,000



29,504,000



2,973,000



33,977,000



(1,432,000
)






35,518,000



1985Opus Plaza at Ken Caryl (Office),
    Littleton, CO


6,700,000



1,178,000



7,289,000



1,178,000



7,293,000



(64,000
)






8,407,000



2002Eaton Freeway (Office/Industrial),
    Phoenix, AZ


5,000,000



1,299,000



5,663,000



1,299,000



5,663,000



(30,000
)






6,932,000



1982,1985,1988Net Liquidation Adjustment(1)


(12,175,000
)






















50,610,000



50,610,000Total

$
225,836,000


$
58,874,000


$
315,244,000


$
58,874,000


$
333,318,000


$
(25,418,000
)

$
50,610,000


$
417,384,000   Maximum Life on WhichDate

Depreciation in LatestAcquired

Income Statement is ComputedTwo Corporate Plaza (Office),
    Clear Lake, TX

November 27, 2002


39 yearsBay View Plaza (Office), Alameda,
    CA

July 31, 2003


39 yearsNorth Pointe (Office), Sacramento,
    CA

August 11, 2003


39 years824 Market (Office), Wilmington, DE

October 10, 2003


39 yearsSutter Square (Office),
    Sacramento, CA

October 28, 2003


39 yearsOne World Trade Center (Office),
    Long Beach, CA

December 5, 2003


39 yearsMadrona Buildings (Office),
    Torrance, CA

March 31, 2004


39 yearsNorth Belt Corporate (Office),
    Houston, TX

April 8, 2004


39 yearsPacific Place (Office), Dallas, TX

May 26, 2004


39 yearsWestern Place I & II
    (Office), Fort Worth, TX

July 23, 2004


39 yearsPax River (Office), Lexington
    Park, MD

August 6, 2004


39 yearsOne Financial Plaza (Office),
    St. Louis, MO

August 6, 2004


39 yearsOpus Plaza at Ken Caryl (Office),
    Littleton, CO

September 12, 2005


39 yearsEaton Freeway (Office/Industrial),
    Phoenix, AZ

October 21, 2005


39 years  120




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##### Table of Contents



(a)
    
    The changes in total real estate for the year ended
    December 31, 2006 are as follows:  2006Balance as of December 31,
    2005 (liquidation basis)

$
835,474,000Capital expenditures


9,804,000Liquidation adjustment, net


(22,370,000
)Disposals


(405,524,000
)Balance as of December 31,
    2006 (liquidation basis)

$
417,384,000     (1)
    
    Under the liquidation basis of accounting, our real estate
    holding are now carried at their estimated fair value, as a
    result the net liquidation adjustment is the net adjustment that
    we have made to the carrying value of the property in order to
    reflect its fair value.(2)
    
    Depreciation expense will not be recorded subsequent to
    December 31, 2005 as a result of the adoption of our plan
    of liquidation, because all assets are considered held for sale. 121




---



##### Table of Contents



SIGNATURES    G Reit, Inc.
  By:
    /s/  Scott
    D. Peters   Chief Executive Officer and President
      Name

Title

Date/s/  Scott
    D. PetersScott
    D. Peters

Chief Executive Officer and
    President

March 20, 2007/s/  Courtney
    A. BrowerCourtney
    A. Brower

Chief Accounting Officer

March 20, 2007/s/  Anthony
    W. ThompsonAnthony
    W. Thompson

Chairman of the Board of Directors

March 20, 2007/s/  Gary
    T. WescombeGary
    T. Wescombe

Director

March 20, 2007/s/  Edward
    A. JohnsonEdward
    A. Johnson

Director

March 20, 2007/s/  D.
    Fleet
    WallaceD.
    Fleet Wallace

Director

March 20, 2007/s/  W.
    Brand InlowW.
    Brand Inlow

Director

March 20, 2007/s/  Gary
    H. HuntGary
    H. Hunt

Director

March 20, 2007  122




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##### Table of Contents



EXHIBIT INDEX
  Regulation S-K,
  Form 10-K Regulation S-K).
  ExhibitNumber

Exhibit1
.1

Form of Dealer Manager Agreement
    between G REIT, Inc. and NNN Capital Corp. (included as
    Exhibit 1.1 to Amendment No. 2 to our Registration
    Statement on
    Form S-11
    filed on January 23, 2004 (File
    No. 333-109640)
    and incorporated herein by reference).1
.2

Form of Participating
    Broker-Dealer Agreement (included as Exhibit 1.2 to
    Amendment No. 2 to our Registration Statement on
    Form S-11
    filed on January 23, 2004 (File
    No. 333-109640)
    and incorporated herein by reference).2
.1

G REIT, Inc. Plan of Liquidation
    and Dissolution, as approved by stockholders on
    February 27, 2006 and as currently in effect (included as
    Exhibit A to our Definitive Proxy Statement filed on
    January 13, 2006 and incorporated herein by reference)3
.1

Articles of Incorporation of G
    REIT, Inc. (as approved by stockholders on June 29, 2004
    and as currently in effect (included as Appendix B to our
    Definitive Proxy Statement filed on May 27, 2004 and
    incorporated herein by reference).3
.2

Bylaws of G REIT, Inc. (as
    approved by stockholders on June 29, 2004 and as currently
    in effect (included as Appendix C to our Definitive Proxy
    Statement filed on May 27, 2004 and incorporated herein by
    reference).4
.1

Form of our Common Stock
    Certificate (included as Exhibit 4.1 to our Registration
    Statement on
    Form S-11
    filed on January 9, 2002 (File
    No. 333-76498)
    and incorporated herein by reference).10
.1

Form of Agreement of Limited
    Partnership of G REIT, L.P. (included as Exhibit 10.1 to
    our Registration Statement on
    Form S-11
    filed on January 9, 2002 (File
    No. 333-76498)
    and incorporated herein by reference).10
.2

Amended and Restated Dividend
    Reinvestment Plan (included as Exhibit C to our Prospectus,
    a part of Amendment No. 2 to our Registration Statement on
    Form S-11
    filed on January 23, 2004 (File
    No. 333-109640)
    and incorporated herein by reference).10
.3

Amended and Restated Stock
    Repurchase Plan (included as Exhibit D to our Prospectus, a
    part of Amendment No. 2 to our Registration Statement on
    Form S-11
    filed on January 23, 2004 (File
    No. 333-109640)
    and incorporated herein by reference).10
.4

Independent Director Stock Option
    Plan (included as Exhibit 10.4 to Amendment No. 1 to
    our Registration Statement on
    Form S-11
    filed on April 29, 2002 (File
    No. 333-76498)
    and incorporated herein by reference).10
.5

Officer and Employee Stock Option
    Plan (included as Exhibit 10.5 to Amendment No. 1 to
    our Registration Statement on
    Form S-11
    filed on April 29, 2002 (File
    No. 333-76498)
    and incorporated herein by reference).10
.6

Advisory Agreement between G REIT,
    Inc. and Triple Net Properties, LLC (included as
    Exhibit 10.6 to our Registration Statement on
    Form S-11
    filed on January 9, 2002 (File
    No. 333-76498)
    and incorporated herein by reference).10
.7

First Amendment to Advisory
    Agreement between G REIT, Inc. and Triple Net Properties, LLC
    (included as Exhibit 10.8 to Post Effective Amendment
    No. 1 to our Registration Statement on
    Form S-11
    filed on December 18, 2002 (File
    No. 333-76498)
    and incorporated herein by reference).10
.8

2004 Incentive Award Plan
    (included as Appendix A to the Definitive Proxy filed on
    May 27, 2004 and incorporated herein by reference).10
.9

Credit Agreement among G REIT,
    L.P., the Lenders and LaSalle Bank National Association dated as
    of January 31, 2003. (included as Exhibit 10.48 to
    Form 10-K
    for the fiscal year ended December 31, 2004 filed on
    March 31, 2005 and incorporated herein by reference).10
.10

First Amendment to Credit
    Agreement among G REIT, L.P., the Lenders and LaSalle Bank
    National Association dated as of April   , 2003.
    (included as Exhibit 10.49 to
    Form 10-K
    for the fiscal year ended December 31, 2004 filed on
    March 31, 2005 and incorporated herein by reference).




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##### Table of Contents



ExhibitNumber

Exhibit10
.11

Amended and Restated Credit
    Agreement among G REIT, L.P., the Lenders and LaSalle Bank
    National Association dated as of July 17, 2003. (included
    as Exhibit 10.50 to
    Form 10-K
    for the fiscal year ended December 31, 2004 filed on
    March 31, 2005 and incorporated herein by reference).10
.12

First, Second, Third, Fourth,
    Fifth and Sixth Amendment to the Amended and Restated Credit
    Agreement among G REIT, L.P., the Lenders and LaSalle Bank
    National Association dated as of August 11, 2003,
    September 19, 2003, November 7, 2003,
    December 19, 2003, March   , 2004 and
    August 27, 2004, respectively. (included as
    Exhibit 10.51 to
    Form 10-K
    for the fiscal year ended December 31, 2004 filed on
    March 31, 2005 and incorporated herein by reference).10
.13

Second Amended and Restated Credit
    Agreement dated January 25, 2006, by and among G REIT, L.P,
    certain lenders named therein, and LaSalle Bank National
    Association (included as Exhibit 10.1 to Current Report on
    Form 8-K
    filed on January 31, 2006 and incorporated herein by
    reference).10
.14

First Amendment to Second Amended
    and Restated Credit Agreement dated October 17, 2006, by
    and among G REIT, L.P, certain lenders named therein and LaSalle
    Bank National Association (included as Exhibit 10.1 to
    Form 8-K
    filed on November 13, 2006 and incorporated herein by
    reference).14
.1

GREIT Code of Business Conduct and
    Ethics dated May 14, 2004 (included as Exhibit 14.1 to
    Form 10-K
    for the fiscal year ended December 31, 2004 filed by us on
    March 31, 2005 and incorporated herein by reference).21
.1*

Subsidiaries of G REIT, Inc.31
.1*

Certification of Chief Executive
    Officer, as required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934, as amended, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2*

Certification of Chief Accounting
    Officer, as required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934, as amended, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
.1*

Certification of Chief Executive
    Officer, pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.32
.2*

Certification of Chief Accounting
    Officer, pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.     *
    
    Filed herewith.