##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549
      Form 10-Q
      (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    001-14245
  AMB Property, L.P.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

94-3285362(I.R.S.  Employer
    Identification No.)Pier 1, Bay 1, San Francisco, California(Address of Principal
    Executive Offices)

94111(Zip
    Code)   (415) 394-9000
 (Registrants telephone
    number, including area code)
  þ o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ




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##### 



AMB
    PROPERTY, L.P.
  INDEX
   
 PagePART I. FINANCIAL INFORMATIONItem 1.


Financial Statements (unaudited)Consolidated Balance Sheets as of
    September 30, 2008 and December 31, 2007


1Consolidated Statements of Operations for the
    Three and Nine Months Ended September 30, 2008 and 2007


2Consolidated Statement of Partners Capital
    for the Nine Months Ended September 30, 2008


3Consolidated Statements of Cash Flows for the
    Nine Months Ended September 30, 2008 and 2007


4Notes to Consolidated Financial Statements


5Item 2.


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


31Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


70Item 4.


Controls and Procedures


71PART II . OTHER INFORMATIONItem 1.


Legal Proceedings


73Item 1A.


Risk Factors


73Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


74Item 3.


Defaults Upon Senior Securities


74Item 4.


Submission of Matters to a Vote of Security
    Holders


74Item 5.


Other Information


74Item 6.


Exhibits


75EX-31.1EX-32.1




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##### Table of Contents



PART I  Item 1.
    Financial
    Statements  AMB
    PROPERTY, L.P.
  CONSOLIDATED
    BALANCE SHEETS
 As of
    September 30, 2008 and December 31, 2007
  September 30,


December 31,2008


2007(Unaudited, dollars in thousands)ASSETSInvestments in real estate:Land

$
1,086,548


$
1,276,621Buildings and improvements


3,487,111



3,777,210Construction in progress


1,742,131



1,655,714Total investments in properties


6,315,790



6,709,545Accumulated depreciation and amortization


(928,831
)


(916,686
)Net investments in properties


5,386,959



5,792,859Investments in unconsolidated joint ventures


433,649



356,194Properties held for contribution, net


693,805



488,339Properties held for divestiture, net


81,347



40,513Net investments in real estate


6,595,760



6,677,905Cash and cash equivalents


285,932



220,224Restricted cash


23,615



30,192Accounts receivable, net of allowance for doubtful accounts of
    $10,424 and $7,378, respectively


163,118



184,270Deferred financing costs, net


21,661



23,313Other assets


227,732



126,499Total assets

$
7,317,818


$
7,262,403LIABILITIES AND PARTNERS CAPITALDebt:Secured debt

$
1,384,409


$
1,471,087Unsecured senior debt


1,153,582



1,003,123Unsecured credit facilities


816,875



876,105Other debt


403,357



144,529Total debt


3,758,223



3,494,844Security deposits


57,489



40,842Distributions payable


56,383



54,907Accounts payable and other liabilities


297,178



210,447Total liabilities


4,169,273



3,801,040Commitments and contingencies (Note 11)Minority interests:Joint venture partners


282,083



517,572Preferred unitholders


109,213



109,805Total minority interests


391,296



627,377Partners capital:General partner, 98,101,795 and 98,981,097 units
    outstanding, respectively; 2,000,000 Series L preferred
    units issued and outstanding with a $50,000 liquidation
    preference, 2,300,000 Series M preferred units issued and
    outstanding with a $57,500 liquidation preference, 3,000,000
    Series O preferred units issued and outstanding with a
    $75,000 liquidation preference and 2,000,000 Series P
    preferred units issued and outstanding with a $50,000
    liquidation preference


2,696,287



2,763,952Limited partners, 2,424,303 and 2,733,894 units,
    respectively


60,962



70,034Total partners capital


2,757,249



2,833,986Total liabilities and partners capital

$
7,317,818


$
7,262,403    1




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##### Table of Contents



AMB
    PROPERTY, L.P.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 For the
    Three and Nine Months Ended September 30, 2008 and
    2007
  For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007(Unaudited, dollars in thousands, except share and per unit
    amounts)REVENUESRental revenues

$
152,993


$
157,805


$
487,071


$
474,752Private capital revenues


9,502



7,564



60,838



22,007Total revenues


162,495



165,369



547,909



496,759COSTS AND EXPENSESProperty operating expenses


(25,814
)


(23,244
)


(76,806
)


(70,726
)Real estate taxes


(18,343
)


(19,420
)


(61,569
)


(58,059
)Depreciation and amortization


(46,985
)


(40,628
)


(129,493
)


(121,641
)General and administrative


(34,415
)


(35,145
)


(103,361
)


(95,259
)Fund costs


(312
)


(261
)


(919
)


(779
)Impairment losses














(257
)Other expenses


1,088



(944
)


1,926



(2,995
)Total costs and expenses


(124,781
)


(119,642
)


(370,222
)


(349,716
)OTHER INCOME AND EXPENSESDevelopment profits, net of taxes


28,026



48,298



76,248



89,486Gains from sale or contribution of real estate interests, net










19,967



74,843Equity in earnings of unconsolidated joint ventures, net


5,372



3,425



14,359



7,286Other income


(4,229
)


7,956



(51
)


20,012Interest expense, including amortization


(32,319
)


(29,326
)


(100,955
)


(97,486
)Total other income and expenses, net


(3,150
)


30,353



9,568



94,141Income before minority interests, discontinued operations


34,564



76,080



187,255



241,184Minority interests share of income:Joint venture partners share of income before discontinued
    operations


(4,194
)


(5,890
)


(29,393
)


(21,088
)Joint venture partners share of development (profits)










(4,409
)


(1,335
)Preferred unitholders


(1,387
)


(1,605
)


(5,095
)


(6,285
)Total minority interests share of income


(5,581
)


(7,495
)


(38,897
)


(28,708
)Income from continuing operations


28,983



68,585



148,358



212,476Discontinued operations:Income attributable to discontinued operations, net of minority
    interests


185



3,278



2,149



9,773Gains (losses) from dispositions of real estate, net of minority
    interests


(12
)


4,034



2,280



4,393Total discontinued operations


173



7,312



4,429



14,166Net income


29,156



75,897



152,787



226,642Series L, M, O and P preferred unit distributions


(3,952
)


(3,952
)


(11,856
)


(11,856
)Series J and K preferred unit distributions














(1,608
)Preferred unit redemption issuance costs






(3
)






(2,930
)Net income available to common unitholders

$
25,204


$
71,942


$
140,931


$
210,248Income available to common unitholders attributable to:General partner

$
24,199


$
69,155


$
136,246


$
202,275Limited partners


1,005



2,787



4,685



7,973Net income available to common unitholders

$
25,204


$
71,942


$
140,931


$
210,248Basic income per common unitIncome from continuing operations (after preferred unit
    distributions and preferred unit redemption discount /issuance
    costs)

$
0.25


$
0.63


$
1.35


$
1.94Discontinued operations






0.07



0.04



0.14Net income available to common unitholders

$
0.25


$
0.70


$
1.39


$
2.08Diluted income per common unitIncome from continuing operations (after preferred unit
    distributions and preferred unit redemption discount/issuance
    costs)

$
0.24


$
0.61


$
1.32


$
1.89Discontinued operations






0.07



0.04



0.14Net income available to common unitholders

$
0.24


$
0.68


$
1.36


$
2.03WEIGHTED AVERAGE COMMON UNITS OUTSTANDINGBasic


101,119,207



102,917,908



101,312,811



101,229,730Diluted


102,922,373



105,109,868



103,430,421



103,777,347    2




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##### Table of Contents



AMB
    PROPERTY, L.P.
  CONSOLIDATED
    STATEMENT OF PARTNERS CAPITAL
 For the
    Nine Months Ended September 30, 2008
  General Partner


Limited PartnersPreferred Units


Common Units


Common UnitsUnits


Amount


Units


Amount


Units


Amount


Total(Unaudited, in thousands, except unit amounts)Balance as of December 31, 2007


9,300,000


$
223,412



98,981,097


$
2,540,540



2,733,894


$
70,034


$
2,833,986Comprehensive income:Net income






11,856







136,246







4,685Unrealized gain on securities and derivatives














(3,409
)






Currency translation adjustment














2,792







Total comprehensive income


























152,170Stock-based compensation amortization and issuance of common
    limited partnership units in connection with the issuance of
    restricted stock and options










478,046



16,741











16,741Issuance of common limited partnership units in connection with
    the exercise of stock options










129,507



4,213











4,213Conversion of operating partnership units to common stock










309,591



15,585



(309,591
)


(6,192
)


9,393Forfeiture of common limited partnership units in connection
    with the forfeiture of restricted stock










(30,855
)


(1,521
)










(1,521
)Repurchase of common units










(1,765,591
)


(87,696
)










(87,696
)Offering costs














(10
)










(10
)Reallocation of interests














2,095







(1,518
)


577Distributions






(11,856
)






(152,701
)






(6,047
)


(170,604
)Balance as of September 30, 2008


9,300,000


$
223,412



98,101,795


$
2,472,875



2,424,303


$
60,962


$
2,757,249    3




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##### Table of Contents



AMB
    PROPERTY, L.P.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 For the
    Nine Months Ended September 30, 2008 and 2007
  2008


2007(Unaudited, dollars in thousands)CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
152,787


$
226,642Adjustments to net income:Straight-line rents and amortization of lease intangibles


(9,050
)


(8,767
)Depreciation and amortization


129,493



121,641Impairment losses






257Foreign exchange (gains)/losses


(66
)


2,883Stock-based compensation amortization


16,741



13,517Equity in earnings of unconsolidated joint ventures


(14,359
)


(7,286
)Operating distributions received from unconsolidated joint
    ventures


24,913



12,354Gains from sale or contribution of real estate interests, net


(19,967
)


(74,843
)Development profits, net of taxes


(76,248
)


(89,486
)Debt premiums, discounts and finance cost amortization, net


6,456



2,446Total minority interests share of net income


38,897



28,708Discontinued operations:Depreciation and amortization


61



1,853Joint venture partners share of net income


233



(5
)Gains from dispositions of real estate, net of minority interests


(2,280
)


(4,393
)Changes in assets and liabilities:Accounts receivable and other assets


(14,410
)


(74,648
)Accounts payable and other liabilities


6,830



66,062Net cash provided by operating activities


240,031



216,935CASH FLOWS FROM INVESTING ACTIVITIESChange in restricted cash


3,305



(78,756
)Cash paid for property acquisitions


(185,153
)


(50,749
)Additions to land, buildings, development costs, building
    improvements, lease costs and securities


(768,440
)


(806,702
)Net proceeds from divestiture of real estate and securities


403,637



502,267Additions to interests in unconsolidated joint ventures


(51,601
)


(53,852
)Capital distributions received from unconsolidated joint ventures


27,055



82,724Repayment of mortgages and loans made to affiliates


81,494



1,542Cash transferred to unconsolidated joint ventures


(16,848
)


(33,709
)Loans made to affiliates


(73,480
)


Purchase of equity interests, net


(60,330
)


Net cash used in investing activities


(640,361
)


(437,235
)CASH FLOWS FROM FINANCING ACTIVITIESIssuance of common units, net


4,213



495,396Repurchase and retirement of common units


(87,696
)


(53,359
)Borrowings on secured debt


518,828



592,635Payments on secured debt


(197,861
)


(250,100
)Borrowings on other debt


525,000



75,956Payments on other debt


(202,046
)


(19,537
)Borrowings on unsecured credit facilities


1,377,720



1,242,481Payments on unsecured credit facilities


(1,409,412
)


(1,303,843
)Payment of financing fees


(6,145
)


(13,119
)Net proceeds from issuances of senior debt


325,000



24,734Payments on senior debt


(175,000
)


(125,000
)Issuance costs on preferred units


(10
)


(577
)Repurchase of preferred units






(102,737
)Contributions from joint venture partners


9,023



38,547Distributions paid to partners


(163,081
)


(156,165
)Distributions to minority interests, including preferred units


(63,563
)


(113,910
)Net cash provided by financing activities


454,970



331,402Net effect of exchange rate changes on cash


11,068



10,934Net increase in cash and cash equivalents


65,708



122,036Cash and cash equivalents at beginning of period


220,224



174,763Cash and cash equivalents at end of period

$
285,932


$
296,799SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid for interest, net of capitalized interest

$
98,096


$
105,171Non-cash transactions:Acquisition of properties

$
227,617


$
53,509Assumption of secured debt


(20,203
)


Assumption of other assets and liabilities


(14,872
)


(11
)Acquisition capital


(7,389
)


(849
)Minority interest contribution, including units issued






(1,900
)Net cash paid for property acquisitions

$
185,153


$
50,749Preferred unit redemption issuance costs

$



$
2,930Contribution of properties to unconsolidated co-investment
    ventures, net

$
114,035


$
74,035Purchase of equity interest of unconsolidated joint ventures, net

$



$
26,031    4




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    Organization
    and Formation of the Operating Partnership    ® ® and/or and/or co-investment
       5




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          
    on an owned and managed basis, which includes investments held
    on a consolidated basis or through unconsolidated co-investment
    ventures, the Operating Partnership owned or partially owned
    approximately 129.6 million square feet (principally,
    warehouse distribution buildings) that were 95.4% leased;
    on an owned and managed basis, which includes investments held
    on a consolidated basis or through unconsolidated co-investment
    ventures, the Operating Partnership had investments in 57
    development projects, which are expected to total approximately
    17.9 million square feet upon completion;
    on an owned and managed basis, which includes investments held
    on a consolidated basis or through unconsolidated co-investment
    ventures, the Operating Partnership owned 14 development
    projects, totaling approximately 3.5 million square feet,
    which are available for sale or contribution;
    through non-managed unconsolidated joint ventures, the Operating
    Partnership had investments in 46 industrial operating
    properties, totaling approximately 7.3 million square
    feet; and
    the Operating Partnership held approximately 0.1 million
    square feet through a ground lease, which is the location of the
    Operating Partnerships global headquarters.  2.
    Interim
    Financial Statements    Form 10-K Form 10-Q
 6




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Reclassifications.
  Investments in Real Estate. property-by-property
  Comprehensive Income.
  International Operations.
   7




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill and Intangible Assets. Goodwill and Other
    Intangible Assets
  New Accounting Pronouncements. Fair Value
    Measurements,
    Level 1.
  Level 2.
  Level 3.
  Fair Value Measurements on a Recurring Basis as of
    September 30, 2008Level 1


Level 2Assets/Liabilities


Assets/Liabilitiesat Fair Value


at Fair Value


TotalAssets:Deferred compensation plan

$
19,967


$



$
19,967Derivative assets






6,950



6,950Investment securities(1)


8,540







8,540Liabilities:Deferred compensation plan


19,967







19,967     (1)
    
    The fair value at September 30, 2008 reflects a loss on
    impairment of an investment of $3.4 million recognized
    during the three and nine months ended September 30, 2008. 8




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of FASB Statement
    No. 115,
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
  Disclosures about Derivative Instruments and Hedging
    Activities  An Amendment of FASB Statement
    No. 133,
  3.
    Development
    Activity   9




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    4.
    Development
    Profits, Gains from Dispositions of Real Estate Interests and
    Discontinued Operations    For the Three


For the NineMonths Ended


Months EndedSeptember 30,


September 30,2008


2007


2008


2007Number of completed development projects


1



1



4



6Number of value-added conversions






1







1Number of land parcels


1







1



Square feet


7,180



42,585



67,112



368,492Gross sales price

$
2,683


$
26,280


$
15,679


$
71,894Development profits, net of taxes

$
588


$
8,479


$
2,856


$
14,686     For the Three


For the NineMonths Ended


Months EndedSeptember 30,


September 30,2008


2007


2008


2007Total number of contributed development assets


3



4



10



14Total square feet


2,135,747



1,334,431



5,146,343



3,005,919Development profits, net of taxes

$
27,438


$
39,819


$
73,392


$
74,800   Gains from Sale or Contribution of Real Estate
    Interests.
  Discontinued Operations. Accounting for the Impairment or
    Disposal of Long-Lived Assets
 10




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Properties Held for Contribution. 15-20%. Accounting for the Impairment or
    Disposal of Long-Lived Assets
  Properties Held for Divestiture.
    For the Three


For the NineMonths Ended


Months EndedSeptember 30,


September 30,2008


2007


2008


2007Rental revenues

$
884


$
3,903


$
2,269


$
11,743Straight-line rents and amortization of lease intangibles


333



(16
)


488



(48
)Property operating expenses


(344
)


(400
)


(649
)


(1,263
)Real estate taxes


(162
)


(346
)


(350
)


(1,055
)Depreciation and amortization


(4
)


(354
)


(61
)


(1,853
)Other income and expenses, net






57



35



(18
)Interest, including amortization


(522
)


430



650



2,262Joint venture partners share of loss (income)






4



(233
)


5Income attributable to discontinued operations

$
185


$
3,278


$
2,149


$
9,773     September 30,


December 31,2008


2007Other assets

$
1,531


$
857Accounts payable and other liabilities

$
10,262


$
8,700  11




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Debt    September 30,


December 31,2008


2007Wholly-owned secured debt, varying interest rates from 1.1% to
    10.7%, due December 2008 to November 2015 (weighted average
    interest rate of 4.7% and 4.0% at September 30, 2008 and
    December 31, 2007, respectively)

$
590,138


$
351,032Consolidated joint venture secured debt, varying interest rates
    from 3.5% to 9.4%, due December 2008 to November 2022 (weighted
    average interest rates of 5.9% and 6.1% at September 30,
    2008 and December 31, 2007, respectively)


791,882



1,115,841Unsecured senior debt securities, varying interest rates from
    3.5% to 8.0%, due March 2009 to June 2018 (weighted average
    interest rates of 6.0% and 6.1% at September 30, 2008 and
    December 31, 2007, respectively)


1,162,491



1,012,491Other debt, varying interest rates from 3.4% to 7.5%, due
    November 2008 to November 2015 (weighted average interest rates
    of 3.9% and 6.0% at September 30, 2008 and
    December 31, 2007, respectively)


403,357



144,529Unsecured credit facilities, variable interest rate, due June
    2010 and June 2011 (weighted average interest rates of 2.9% and
    3.4% at September 30, 2008 and December 31, 2007,
    respectively)


816,875



876,105Total debt before unamortized net discounts


3,764,743



3,499,998Unamortized net discounts


(6,520
)


(5,154
)Total consolidated debt

$
3,758,223


$
3,494,844        12




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         13




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       14




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      ConsolidatedOperating


Joint


UnsecuredPartnership


Venture


Senior


UnsecuredSecured


Secured


Debt


Credit


OtherDebt


Debt


Securities


Facilities


Debt


Total2008

$
93,166


$
25,059


$



$



$
12,236


$
130,4612009


135,094



99,215



100,000







325,873



660,1822010


307,275



89,365



250,000



443,387



941



1,090,9682011


14,759



68,780



75,000



373,488



1,014



533,0412012


2,407



388,419











61,093



451,9192013


20,761



42,831



500,000







920



564,5122014


405



2,981











616



4,0022015


16,271



17,610



112,491







664



147,0362016






16,231















16,2312017






1,272















1,272Thereafter






40,119



125,000











165,119Subtotal


590,138



791,882



1,162,491



816,875



403,357



3,764,743Unamortized net premiums/(discounts)


2,334



55



(8,909
)










(6,520
)Total consolidated debt

$
592,472


$
791,937


$
1,153,582


$
816,875


$
403,357


$
3,758,223   6.
    Minority
    Interests  Consolidation of Variable Interest Entities  An
    Interpretation of ARB No. 51
  Consolidation of Variable
    Interest Entities  An Interpretation of ARB
    No. 51 No. 04-5 (EITF 04-5), Determining Whether a General Partner, or the General
    Partners as a Group, Controls a Limited Partnership or Similar
    Entity When the Limited Partners Have Certain Rights SOP 78-9, Accounting for Investments in Real Estate Ventures.
 15




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 04-5, EITF 04-5, and/or EITF 04-5
    Operating


Total InvestmentPartnerships


in Real Estate


Property Debt


Other DebtOwnership


September 30,


December 31,


September 30,


December 31,


September 30,


December 31,Consolidated Joint Ventures

Co-investment Venture Partner

Percentage


2008


2007


2008


2007


2008


2007Co-investment Ventures AMB/Erie, L.P.(1)

Erie Insurance Company and affiliates


50
%

$



$
53,745


$



$
20,026


$



$
AMB Partners II, L.P.(2)

City and County of San Francisco Employees Retirement
    System


20
%






694,490







319,956







65,000AMB-SGP, L.P.

Industrial JV Pte. Ltd.(4)


50
%


460,536



454,794



343,088



346,638







AMB Institutional Alliance Fund II, L.P.

AMB Institutional Alliance REIT II, Inc.(5)


20
%


538,992



529,148



234,238



238,284



60,000



60,000AMB-AMS,
    L.P.(3)

PMT, SPW and TNO(6)


39
%


157,291



156,468



83,761



83,151







Other Industrial Operating Ventures




92
%


211,637



209,554



21,973



28,570







Other Industrial Development Ventures




66
%


254,874



410,847



108,877



82,403







Total Consolidated Joint Ventures







$
1,623,330


$
2,509,046


$
791,937


$
1,119,028


$
60,000


$
125,000     (1)
    
    In March 2008, the Operating Partnership and Erie Insurance
    Company and its affiliates sold their interests in AMB/Erie,
    L.P., including its final real estate asset to AMB Institutional
    Alliance Fund III, L.P. for a gain of $20.0 million.(2)
    
    On July 1, 2008, the partners of AMB Partners II, L.P.
    (previously , a consolidated co-investment venture) contributed
    their interests in AMB Partners II, L.P. to AMB Institutional
    Alliance Fund III, L.P. in exchange for interests in AMB
    Institutional Alliance Fund III, L.P., an unconsolidated
    co-investment venture. No gain or loss was recognized on the
    contribution.(3)
    
    AMB-AMS,
    L.P. is a co-investment partnership with three Dutch pension
    funds. 16




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (4)
    
    A subsidiary of GIC Real Estate Pte. Ltd., the real estate
    investment subsidiary of the Government of Singapore Investment
    Corporation.(5)
    
    Comprised of 14 institutional investors as stockholders and one
    third-party limited partner as of September 30, 2008.(6)
    
    PMT is Stichting Pensioenfonds Metaal en Techniek, SPW is
    Stichting Pensioenfonds voor de Woningcorporaties and TNO is
    Stichting Pensioenfonds TNO.    September 30,


December 31,


Redemption/Callable2008


2007


DateJoint venture partners

$
282,083


$
517,572



N/AHeld through AMB Property II, L.P.:Class B Limited Partners


31,652



32,244



N/ASeries D preferred units (liquidation preference of $79,767)


77,561



77,561



February 2012Total minority interests

$
391,296


$
627,377     For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007Joint venture partners

$
4,194


$
5,890


$
29,393


$
21,088Joint venture partners share of development profits










4,409



1,335Held through AMB Property II, L.P.:Class B common limited partnership units


(44
)


174



800



1,283Series D preferred units (liquidation preference of $79,767)


1,431



1,431



4,295



4,367Series I preferred units (liquidation preference of $25,500)














635Total minority interests share of net income

$
5,581


$
7,495


$
38,897


$
28,708    17




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    7.
    Investments
    in Unconsolidated Joint Ventures    September 30, 2008OperatingPartnershipsOwnership

Square


September 30,


December 31,Unconsolidated Joint Ventures

Percentage

Feet


2008(6)


2007(6)Co-investment VenturesAMB Institutional Alliance Fund III, L.P.(1)

19%


37,301,250


$
187,546


$
135,710AMB Europe Fund I, FCP-FIS(2)

21%


9,174,716



66,974



49,893AMB Japan Fund I, L.P.(3)

20%


6,281,928



65,995



54,733AMB-SGP Mexico, LLC(4)

22%


6,324,638



14,663



12,557AMB DFS Fund I, LLC(5)

15%


1,288,340



19,693



22,004Other Industrial Operating Joint Ventures(7)

55%


7,669,507



50,877



48,555Total Unconsolidated Joint Ventures




68,040,379


$
405,748


$
323,452     (1)
    
    AMB Institutional Alliance Fund III, L.P. is an open-ended
    co-investment partnership formed in 2004 with institutional
    investors, which invest through a private real estate investment
    trust, and a third-party limited partner. On July 1, 2008,
    the partners of AMB Partners II, L.P. (previously, a
    consolidated co-investment venture) contributed their interests
    in AMB Partners II, L.P. to AMB Institutional Alliance
    Fund III, L.P. in exchange for interests in AMB
    Institutional Alliance Fund III, L.P., an unconsolidated
    co-investment venture. The net equity investment at
    September 30, 2008, for AMB Institutional Alliance
    Fund III, L.P. includes the net equity investment in AMB
    Partners II, L.P. The assets and liabilities of AMB Partners II,
    L.P., which were contributed to AMB Institutional Alliance
    Fund III, L.P., were $628.4 million and
    $608.2 million, respectively.(2)
    
    AMB Europe Fund I, FCP-FIS, is an open-ended co-investment
    venture formed in 2007 with institutional investors. The fund is
    Euro-denominated. U.S. dollar amounts are converted at
    period-end exchange rates for balance sheet amounts and at the
    average exchange rates in effect for income statement amounts
    during the nine months ended September 30, 2008 and 2007.(3)
    
    AMB Japan Fund I, L.P. is a co-investment partnership
    formed in 2005 with institutional investors. The fund is
    Yen-denominated. U.S. dollar amounts are converted at period-end
    exchange rates for balance sheet amounts and at the average
    exchange rates in effect for income statement amounts during the
    nine months ended September 30, 2008 and 2007.(4)
    
    AMB-SGP Mexico, LLC, is a co-investment partnership formed in
    2004 with Industrial (Mexico) JV Pte. Ltd., a subsidiary of GIC
    Real Estate Pte. Ltd, the real estate investment subsidiary of
    the Government of Singapore Investment Corporation.(5)
    
    AMB DFS Fund I, LLC is a co-investment partnership formed
    in 2006 with a subsidiary of GE Real Estate to build and sell
    properties.(6)
    
    As a result of its increased ownership in G. Accion, the
    Operating Partnership began consolidating its interest in G.
    Accion effective June 13, 2008. On July 18, 2008, the
    Operating Partnership acquired the remaining equity interest
    (approximately 42%) in G. Accion. As of September 30, 2008
    and December 31, 2007, the Operating Partnership had a 100%
    consolidated interest and 39% unconsolidated equity interest,
    respectively, in 18




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  G. Accion, a Mexican real estate company that holds equity
    method investments. As a wholly-owned subsidiary, G. Accion has
    been renamed AMB Property Mexico and it continues to provide
    management and development services for industrial, retail and
    residential properties in Mexico. Through its investment in AMB
    Property Mexico, the Operating Partnership holds equity
    interests in various other unconsolidated ventures totaling
    approximately $27.9 million as of September 30, 2008.
    At December 31, 2007, the Operating Partnership had equity
    interests in G. Accion totaling approximately $32.7 million.(7)
    
    Other Industrial Operating Joint Ventures includes joint
    ventures between the Operating Partnership and third parties
    which generally have been formed to take advantage of a
    particular market opportunity that can be accessed as a result
    of the joint venture partners experience in the market.
    The Operating Partnership typically owns
    50-90% of
    these joint ventures.   For the Three Months Ended


For the Three Months EndedSeptember 30, 2008


September 30, 2007Income (Loss)











Income (Loss)Property


from


Net





Property


from


NetOperating


Continuing


Income





Operating


Continuing


IncomeUnconsolidated Joint Ventures:

Revenues


Expenses


Operations


(Loss)


Revenues


Expenses


Operations


(Loss)Co-investment VenturesAMB Institutional Alliance Fund III, L.P.(1)

$
69,480


$
(17,517
)

$
5,859


$
5,859


$
36,291


$
(9,396
)

$
3,568


$
3,500AMB Europe Fund I, FCP-FIS(2)


28,724



(5,782
)


2,876



2,876



15,770



(2,584
)


2,059



2,059AMB Japan Fund I, L.P.(3)


19,757



(4,321
)


1,621



1,621



14,000



(3,054
)


1,519



1,519AMB-SGP Mexico, LLC(4)


9,082



(1,541
)


(4,716
)


(4,716
)


7,044



(1,217
)


(2,971
)


(2,971
)AMB DFS Fund I, LLC(5)


187



(26
)


2,911



2,911











(70
)


(70
)Total Co-investment Ventures


127,230



(29,187
)


8,551



8,551



73,105



(16,251
)


4,105



4,037Other Industrial Operating Joint Ventures


9,611



(2,011
)


1,822



1,822



10,108



(2,454
)


3,039



3,097Total Unconsolidated Joint Ventures

$
136,841


$
(31,198
)

$
10,373


$
10,373


$
83,213


$
(18,705
)

$
7,144


$
7,134   For the Nine Months Ended


For the Nine Months EndedSeptember 30, 2008


September 30, 2007Income (Loss)











Income (Loss)Property


from


Net





Property


from


NetOperating


Continuing


Income





Operating


Continuing


IncomeUnconsolidated Joint Ventures:

Revenues


Expenses


Operations


(Loss)


Revenues


Expenses


Operations


(Loss)Co-investment VenturesAMB Institutional Alliance Fund III, L.P.(1)

$
160,623


$
(41,205
)

$
11,989


$
11,989


$
99,005


$
(25,451
)

$
10,397


$
10,351AMB Europe Fund I, FCP-FIS(2)


76,752



(14,053
)


4,452



4,452



18,741



(3,574
)


2,735



2,735AMB Japan Fund I, L.P.(3)


54,712



(11,802
)


4,830



4,830



36,348



(7,806
)


5,219



5,219AMB-SGP Mexico, LLC(4)


23,462



(3,824
)


(8,590
)


(8,590
)


16,698



(2,683
)


(7,778
)


(7,778
)AMB DFS Fund I, LLC(5)


291



(30
)


10,185



10,185











(126
)


(126
)Total Co-investment Ventures


315,840



(70,914
)


22,866



22,866



170,792



(39,514
)


10,447



10,401Other Industrial Operating Joint Ventures


28,899



(6,273
)


19,090



19,090



30,195



(7,536
)


10,074



10,098Total Unconsolidated Joint Ventures

$
344,739


$
(77,187
)

$
41,956


$
41,956


$
200,987


$
(47,050
)

$
20,521


$
20,499  19




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    AMB Institutional Alliance Fund III, L.P. is an open-ended
    co-investment partnership formed in 2004 with institutional
    investors, which invest through a private real estate investment
    trust, and a third-party limited partner. On July 1, 2008,
    the partners of AMB Partners II, L.P., (previously, a
    consolidated co-investment venture) contributed their interests
    in AMB Partners II, L.P. to AMB Institutional Alliance
    Fund III, L.P. in exchange for interests in AMB
    Institutional Alliance Fund III, L.P., an unconsolidated
    co-investment venture. The summarized income statement
    information for the three and nine months ended
    September 30, 2008 for AMB Institutional Alliance
    Fund III, L.P. includes the summarized income statement
    information for AMB Partners II, L.P.(2)
    
    AMB Europe Fund I, FCP-FIS, is an open-ended co-investment
    venture formed in 2007 with institutional investors. The fund is
    Euro-denominated. U.S. dollar amounts are converted at
    period-end exchange rates for balance sheet amounts and at the
    average exchange rates in effect for income statement amounts
    during the nine months ended September 30, 2008 and 2007.
    Amounts for the three and nine months ended September 30,
    2007, represent the period from inception (June 12,
    2007) through September 30, 2007.(3)
    
    AMB Japan Fund I, L.P. is a co-investment partnership
    formed in 2005 with institutional investors. The fund is
    Yen-denominated. U.S. dollar amounts are converted at period-end
    exchange rates for balance sheet amounts and at the average
    exchange rates in effect for income statement amounts during the
    nine months ended September 30, 2008 and 2007.(4)
    
    AMB-SGP Mexico, LLC, is a co-investment partnership formed in
    2004 with Industrial (Mexico) JV Pte. Ltd., a subsidiary of GIC
    Real Estate Pte. Ltd, the real estate investment subsidiary of
    the Government of Singapore Investment Corporation.(5)
    
    AMB DFS Fund I, LLC is a co-investment partnership formed
    in 2006 with a subsidiary of GE Real Estate to build and sell
    properties.     20




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             21




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          8.
    Partners
    Capital    1 2 3 4
 22




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Three


For the NineMonths Ended


Months EndedSeptember 30,


September 30,Paying Entity

Security

2008


2007


2008


2007Operating Partnership

Common limited partnership units

$
0.520


$
0.500


$
1.560


$
1.500Operating Partnership

Series J preferred units


n/a



n/a



n/a


$
1.005Operating Partnership

Series K preferred units


n/a



n/a



n/a


$
1.005AMB Property II, L.P.

Class B common limited partnership units

$
0.520


$
0.500


$
1.560


$
1.500AMB Property II, L.P.

Series D preferred units

$
0.898


$
0.898


$
2.693


$
2.738AMB Property II, L.P.

Series I preferred units


n/a



n/a



n/a


$
1.244         For the Nine Months Ended September 30, 2008Dividend

Expected

Risk-free

Expected

FairYield

Volatility

Interest Rate

Life (Years)

Value3.6% - 4.5%

25.5% - 33.5%

2.7% - 3.5%

4.75 - 7.50

$7.91 - $14.37    23




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Income
    Per Unit    For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007NumeratorIncome from continuing operations

$
28,983


$
68,585


$
148,358


$
212,476Preferred unit distributions


(3,952
)


(3,952
)


(11,856
)


(13,464
)Preferred unit redemption issuance costs






(3
)






(2,930
)Income from continuing operations (after preferred unit
    distributions and preferred unit redemption issuance costs)


25,031



64,630



136,502



196,082Total discontinued operations


173



7,312



4,429



14,166Net income available to common unitholders

$
25,204


$
71,942


$
140,931


$
210,248DenominatorBasic


101,119,207



102,917,908



101,312,811



101,229,730Stock options and restricted stock dilution(1)


1,803,166



2,191,960



2,117,610



2,547,617Diluted weighted average common units


102,922,373



105,109,868



103,430,421



103,777,347Basic income per common unitIncome from continuing operations (after preferred unit
    distributions and preferred unit redemption issuance costs)

$
0.25


$
0.63


$
1.35


$
1.94Discontinued operations






0.07



0.04



0.14Net income available to common unitholders

$
0.25


$
0.70


$
1.39


$
2.08Diluted income per common unitIncome from continuing operations (after preferred unit
    distributions and preferred unit redemption issuance costs)

$
0.24


$
0.61


$
1.32


$
1.89Discontinued operations






0.07



0.04



0.14Net income available to common unitholders

$
0.24


$
0.68


$
1.36


$
2.03     (1)
    
    Excludes anti-dilutive stock options of 2,021,612 and 1,735,402,
    for the three and nine months ended September 30, 2008,
    respectively. Excludes anti-dilutive stock options of 1,100,332
    and 530,456, for the 24




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  three and nine months ended September 30, 2007,
    respectively. These weighted average units relate to
    anti-dilutive stock options, which are calculated using the
    treasury stock method, and could be dilutive in the future.  10.
    Segment
    Information    
    Real Estate Operations.  The Operating
    Partnership operates industrial properties and manages its
    business by geographic markets. Such industrial properties are
    typically comprised of multiple distribution warehouse
    facilities suitable for single or multiple customers who are
    engaged in various types of businesses. The geographic markets
    where the Operating Partnership owns industrial properties are
    managed separately because it believes each market has its own
    economic characteristics and requires its own operating, pricing
    and leasing strategies. Each market is considered to be an
    individual operating segment. The accounting policies of the
    segments are the same as those described in the summary of
    significant accounting policies. The Operating Partnership
    evaluates performance based upon property net operating income
    of the combined properties in each segment, which are listed
    below. In addition, the Operating Partnerships development
    business is included under real estate operations. It primarily
    consists of the Operating Partnerships development of real
    estate properties that are subsequently contributed to a
    co-investment venture fund in which the Operating Partnership
    has an ownership interest and for which the Operating
    Partnership acts as manager, or that are sold to third parties.
    The Operating Partnership evaluates performance of the
    development business by reported operating segment based upon
    gains generated from the disposition
    and/or
    contribution of real estate. The assets of the development
    business generally include properties under development and land
    held for development. During the period between the completion
    of development of a property and the date the property is
    contributed to an unconsolidated co-investment venture or sold
    to a third party, the property and its associated rental income
    and property operating costs are included in the real estate
    operations segment because the primary activity associated with
    the property during that period is leasing. Upon contribution or
    sale, the resulting gain or loss is included as gains from sale
    or contribution of real estate interests or development profits,
    as appropriate.
    Private Capital.  The Operating Partnership,
    through its private capital group, AMB Capital Partners, LLC
    (AMB Capital Partners), provides real estate
    investment, portfolio management and reporting services to
    co-investment ventures and clients. The private capital income
    earned consists of acquisition and development fees, asset
    management fees and priority distributions, and promoted
    interests and incentive distributions from the Operating
    Partnerships co-investment ventures and AMB Capital
    Partners clients. With respect to the Operating
    Partnerships U.S. and Mexico funds and co-investment
    ventures, the Operating Partnership typically earns a
    90.0 basis points acquisition fee on the acquisition cost
    of third party acquisitions, asset management priority
    distributions of 7.5% of net operating income on stabilized
    properties, 70.0 basis points of total projected costs as
    asset management fees on renovation or development properties,
    and incentive distributions of 15% of the return over a 9%
    internal rate of return and 20% of the return over a 12%
    internal rate of return to investors on a periodic basis or at
    the end of a funds life. In Japan, the Operating
    Partnership earns a 90.0 basis points acquisition fee on
    the acquisition cost of third party acquisitions, asset
    management priority distributions of 1.5% of 65% of the
    committed equity during the investment period and then 1.5% of
    unreturned equity, and incentive distributions of 20% of the
    return over a 10% internal rate of return and 25% of the return
    over a 13% internal rate of return to investors at the end of a
    funds life. In Europe, the Operating Partnership earns a
    90.0 basis points acquisition fee on the acquisition cost
    of third party acquisitions, asset management fees of
    75.0 basis points on the gross asset value of the fund, and
    incentive distributions of 20% of the return over a 9% internal
    rate of return and 25% of the return over a 12% internal rate of
    return to investors on a periodic basis. The accounting policies
    of the segment are the same as those described in the summary of
    significant accounting policies under Note 2, Notes to the 25




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##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated Financial Statements in the Operating
    Partnerships Annual Report on
    Form 10-K
    for the year ended December 31, 2007. The Operating
    Partnership evaluates performance based upon private capital
    income.    Revenues


Property NOI(2)


Development ProfitsFor the Three Months


For the Three Months


For the Three MonthsEnded September 30,


Ended September 30,


Ended September 30,Segments(1)

2008


2007


2008


2007


2008


2007U.S. MarketsSouthern California

$
25,379


$
27,830


$
20,406


$
22,114


$
20,456


$
1,424No. New Jersey/New York


14,811



18,869



10,433



13,227







San Francisco Bay Area


20,477



23,684



14,879



18,051







6,705Chicago


10,522



13,768



7,035



9,735







350On-Tarmac


13,086



13,472



7,557



7,735







South Florida


10,019



10,336



6,419



7,038







Seattle


6,157



9,940



4,815



7,844







Non-U.S. MarketsEurope


2,431



1,773



1,782



1,269







23,402Japan


6,648



2,185



4,727



1,979



4,016



16,417Other Markets


41,670



36,018



28,484



25,473



3,554



Total markets


151,200



157,875



106,537



114,465



28,026



48,298Straight-line rents and amortization of lease intangibles


3,010



3,817



3,010



3,817







Discontinued operations


(1,217
)


(3,887
)


(711
)


(3,141
)






Private capital income


9,502



7,564















Total

$
162,495


$
165,369


$
108,836


$
115,141


$
28,026


$
48,298   26




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenues


Property NOI(2)


Development ProfitsFor the Nine Months


For the Nine Months


For the Nine MonthsEnded September 30,


Ended September 30,


Ended September 30,Segments(1)

2008


2007


2008


2007


2008


2007U.S. MarketsSouthern California

$
80,249


$
81,677


$
63,258


$
64,712


$
21,563


$
10,764No. New Jersey/New York


50,692



54,420



35,761



37,302







San Francisco Bay Area


63,636



66,372



46,647



51,774







6,705Chicago


39,466



40,248



25,640



27,956



2,964



3,018On-Tarmac


39,438



40,351



22,220



22,717







South Florida


26,200



32,107



20,141



21,521



7,038



4,422Seattle


26,050



28,370



20,802



22,169



7,236



5,161Non-U.S. MarketsEurope


3,909



23,596



2,746



19,082



9,003



39,209Japan


19,722



2,273



14,709



1,820



17,332



16,417Other Markets


131,416



108,266



89,480



77,524



11,112



3,790Total markets


480,778



477,680



341,404



346,577



76,248



89,486Straight-line rents and amortization of lease intangibles


9,050



8,767



9,050



8,767







Discontinued operations


(2,757
)


(11,695
)


(1,758
)


(9,377
)






Private capital income


60,838



22,007















Total

$
547,909


$
496,759


$
348,696


$
345,967


$
76,248


$
89,486     (1)
    
    The markets included in U.S. markets are a subset of the
    Operating Partnerships regions defined as East, Southwest
    and West Central in the Americas. Japan is a part of the
    Operating Partnerships Asia region.(2)
    
    Property net operating income (NOI) is defined as
    rental revenue, including reimbursements, less property
    operating expenses, which excludes depreciation, amortization,
    general and administrative expenses and interest expense. For a
    reconciliation of NOI to net income, see the table below.   27




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007Property NOI

$
108,836


$
115,141


$
348,696


$
345,967Private capital revenues


9,502



7,564



60,838



22,007Depreciation and amortization


(46,985
)


(40,628
)


(129,493
)


(121,641
)General and administrative


(34,415
)


(35,145
)


(103,361
)


(95,259
)Fund costs


(312
)


(261
)


(919
)


(779
)Impairment losses














(257
)Other expenses


1,088



(944
)


1,926



(2,995
)Development profits, net of taxes


28,026



48,298



76,248



89,486Gains from dispositions of real estate interests










19,967



74,843Equity in earnings of unconsolidated joint ventures


5,372



3,425



14,359



7,286Other income


(4,229
)


7,956



(51
)


20,012Interest, including amortization


(32,319
)


(29,326
)


(100,955
)


(97,486
)Total minority interests share of income


(5,581
)


(7,495
)


(38,897
)


(28,708
)Total discontinued operations


173



7,312



4,429



14,166Net income

$
29,156


$
75,897


$
152,787


$
226,642     Total Assets as ofSeptember 30,


December 31,2008


2007U.S. MarketsSouthern California

$
816,238


$
925,771No. New Jersey/New York


531,420



637,356San Francisco Bay Area


787,087



777,964Chicago


322,202



453,086On-Tarmac


188,521



201,235South Florida


381,370



384,110Seattle


195,947



383,893Non-U.S. MarketsEurope


466,511



254,740Japan


666,691



717,586Other Markets


2,189,898



1,891,077Total markets


6,545,885



6,626,818Investments in unconsolidated joint ventures


433,649



356,194Non-segment assets


338,284



279,391Total assets

$
7,317,818


$
7,262,403  28




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Commitments
    and Contingencies  Commitments
  Lease Commitments.
  Standby Letters of Credit.
  Guarantees and Contribution
    Obligations.
      364-day
  Performance and Surety Bonds.
 29




---



##### Table of Contents



AMB
    PROPERTY, L.P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Promoted Interests and Other Contractual
    Obligations.
  Contingencies
  Litigation.
  Environmental Matters.
  General Uninsured Losses.
  Captive Insurance Company.
 30




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Some of the information included in this quarterly report on
    Form 10-Q
    contains forward-looking statements, which are made pursuant to
    the safe-harbor provisions of Section 21E of the Securities
    Exchange Act of 1934, as amended, and Section 27A of the
    Securities Act of 1933, as amended. Because these
    forward-looking statements involve numerous risks and
    uncertainties, there are important factors that could cause our
    actual results to differ materially from those in the
    forward-looking statements, and you should not rely on the
    forward-looking statements as predictions of future events. The
    events or circumstances reflected in the forward-looking
    statements might not occur. You can identify forward-looking
    statements by the use of forward-looking terminology such as
    believes, expects, may,
    will, should, seeks,
    approximately, intends,
    plans, forecasting, pro
    forma, estimates or anticipates,
    or the negative of these words and phrases, or similar words or
    phrases. You can also identify forward-looking statements by
    discussions of strategy, plans or intentions. Forward-looking
    statements should not be read as guarantees of future
    performance or results, and will not necessarily be accurate
    indicators of whether, or the time at which, such performance or
    results will be achieved. There is no assurance that the events
    or circumstances reflected in forward-looking statements will
    occur or be achieved. Forward-looking statements are necessarily
    dependent on assumptions, data or methods that may be incorrect
    or imprecise and we may not be able to realize them.
  The following factors, among others, could cause actual
    results and future events to differ materially from those set
    forth or contemplated in the forward-looking statements:
  
    changes in general economic conditions or in the real estate
    sector;
    defaults on or non-renewal of leases by customers or renewal
    at lower than expected rent;
    difficulties in identifying properties to acquire and in
    effecting acquisitions on advantageous terms and the failure of
    acquisitions to perform as we expect;
    risks and uncertainties affecting property development,
    redevelopment and value-added conversion (including construction
    delays, cost overruns, our inability to obtain necessary permits
    and financing, our inability to lease properties at all or at
    favorable rents and terms, public opposition to these
    activities, as well as the risks associated with our expansion
    of and increased investment in our development business);
    our failure to contribute properties to our co-investment
    ventures due to such factors as our inability to acquire,
    develop, or lease properties that meet the investment criteria
    of such ventures, or our co-investment ventures inability
    to access debt and equity capital to pay for property
    contributions or their allocation of available capital to cover
    other capital requirements such as future redemptions;
    risks and uncertainties relating to the disposition of
    properties to third parties and our ability to effect such
    transactions on advantageous terms;
    risks of doing business internationally and global expansion,
    including unfamiliarity with new markets and currency risks;
    risks of opening offices globally (including increasing
    headcount);
    a continued or prolonged downturn in the California, U.S., or
    the global economy or real estate conditions and other financial
    market fluctuations;
    risks of changing personnel and roles;
    losses in excess of our insurance coverage;
    our failure to divest of properties on advantageous terms or
    to timely reinvest proceeds from any such divestitures;
    unknown liabilities acquired in connection with acquired
    properties or otherwise;
    our failure to successfully integrate acquired properties and
    operations;
    risks associated with using debt to fund acquisitions and
    development, including re-financing risks; 31




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##### Table of Contents




    risks related to our obligations in the event of certain
    defaults under co-investment venture and other debt;
    our failure to obtain, renew, or extend necessary financing
    or access the debt or equity markets;
    our failure to maintain our current credit agency ratings or
    comply with our debt covenants;
    risks associated with equity and debt securities financings
    and issuances (including the risk of dilution);
    changes in local, state and federal regulatory requirements,
    including changes in real estate and zoning laws;
    increases in real property tax rates;
    risks associated with our tax structuring;
    increases in interest rates and operating costs or greater
    than expected capital expenditures; and
    environmental uncertainties and risks related to natural
    disaster.  Our success also depends upon economic trends generally,
    various market conditions and fluctuations and those other risk
    factors discussed under the heading Risk Factors and
    elsewhere in this report and in our Annual Report on
    Form 10-K
    for the year ended December 31, 2007, and any amendments
    thereto. We caution you not to place undue reliance on
    forward-looking statements, which reflect our analysis only and
    speak as of the date of this report or as of the dates indicated
    in the statements. All of our forward-looking statements,
    including those in this report, are qualified in their entirety
    by this statement. We assume no obligation to update or
    supplement forward-looking statements.
  ® ® ®
  THE
    COMPANY
  ® ® and/or and/or
     32




---



##### Table of Contents



(415) 394-9000. http://www.amb.com Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330. http://www.sec.gov
  Investment
    Strategy
    ® ® ®
      
    on an owned and managed basis, which include investments held on
    a consolidated basis or through unconsolidated joint ventures,
    we owned or partially owned approximately 129.6 million
    square feet (principally, warehouse distribution buildings) that
    were 95.4% leased;
    on an owned and managed basis, which include investments held on
    a consolidated basis or through unconsolidated co-investment
    ventures, we had investments in 57 development projects, which
    are expected to total approximately 17.9 million square
    feet upon completion; 33




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##### Table of Contents




    on an owned and managed basis, which include investments held on
    a consolidated basis or through unconsolidated joint ventures,
    we owned 14 development projects, totaling approximately
    3.5 million square feet, which are available for sale or
    contribution;
    through non-managed unconsolidated joint ventures, we had
    investments in 46 industrial operating properties, totaling
    approximately 7.3 million square feet; and
    we held approximately 0.1 million square feet through a
    ground lease, which is the location of our global headquarters.  Operating
    Strategy
    Growth
    Strategies
  Growth
    through Operations
    Growth
    through Development
     34




---



##### Table of Contents



Growth
    through Acquisitions and Capital Redeployment
      Growth
    through Global Expansion
  ®
  Growth
    through Co-Investments
  10-50%
  Managements
    Overview
    
    maintain and increase occupancy rates
    and/or
    increase rental rates at our properties; 35




---



##### Table of Contents




    continue to develop properties profitably and sell to third
    parties or contribute to our co-investment ventures; and
    continue to raise third-party equity in our co-investment
    ventures and to grow our earnings from our private capital
    business through the contribution of properties or from the
    acquisition of new properties.  Global
    Market and Economic Conditions
        Real
    Estate Operations
   36




---



##### Table of Contents



Total/WeightedOwned and Managed Property Data(1)

The Americas


Europe


Asia


AverageFor the quarter ended September 30, 2008:Rentable square feet


110,726,254



9,748,614



9,144,049



129,618,917Occupancy percentage at period end(3)


95.4
%


96.2
%


95.4
%


95.4
%Trailing four quarter same space square footage leased


17,493,291



415,368



506,126



18,414,785Trailing four quarter rent change on renewals and rollovers(2)(3)


4.8
%


(14.8
)%


4.1
%


4.1
%For the quarter ended September 30, 2007:Rentable square feet


99,483,418



7,052,701



7,494,320



114,030,439Occupancy percentage at period end(3)


95.7
%


94.4
%


93.7
%


95.5
%Trailing four quarter same space square footage leased


16,939,479



690,569



366,227



17,996,275Trailing four quarter rent change on renewals and rollovers(2)(3)


4.4
%


7.6
%


(0.6
)%


4.4
%     (1)
    
    Schedule includes owned and managed operating properties which
    we define as properties in which we have at least a 10%
    ownership interest, for which we are the property or asset
    manager and which we currently intend to hold for the long-term.
    This excludes development and renovation projects and recently
    completed development projects available for sale or
    contribution.(2)
    
    Rent changes on renewals and rollovers are calculated as the
    difference, weighted by square feet, of the net annualized base
    rent (ABR) due the first month of a term commencement and the
    net ABR due the last month of the former customers
    term. If free rent is granted, then the first positive full rent
    value is used as a point of comparison. The rental amounts
    exclude base stop amounts, holdover rent and premium rent
    charges. If either the previous or current lease terms are under
    12 months, then they are excluded from this calculation. If
    the lease is first generation or there is no prior lease for
    comparison, then it is excluded from this calculation.(3)
    
    On a consolidated basis, for the Americas, Europe and Asia,
    occupancy percentage at period end for 2008 was 95.1%, 78.7% and
    96.1%, and trailing four quarter rent change on renewals and
    rollovers at period end for 2008 was 4.4%, n/a and 11.9%,
    respectively. On a consolidated basis, for the Americas, Europe
    and Asia, occupancy percentage at period end for 2007 was 96.3%,
    n/a and 89.2%, and trailing four quarter rent change on renewals
    and rollovers at period end for 2007 was 4.3%, n/a and (7.8%),
    respectively. Properties in Europe are primarily held in the
    unconsolidated co-investment venture AMB Europe Fund I,
    FCP-FIS. 37




---



##### Table of Contents



Development
    Business
    non-U.S. markets
    Private
    Capital Business
   38




---



##### Table of Contents



AMB-AMS,
        Summary
    of Key Transactions
    
    Acquired, on an owned and managed basis, seven properties in the
    Americas and Asia aggregating approximately 1.6 million
    square feet for $139.6 million, including four properties
    aggregating approximately 0.7 million square feet for
    $70.6 million through unconsolidated co-investment ventures
    and three properties aggregating approximately 0.9 million
    square feet for $69.0 million acquired directly by us;
    Committed to seven new development projects in the Americas and
    Europe totaling 1.6 million square feet with an estimated
    total investment of approximately $132.3 million;
    Acquired 90 acres of land for development in the Americas,
    Europe and Asia for approximately $40.1 million;
    Contributed three completed development projects aggregating
    approximately 2.1 million square feet to AMB Institutional
    Alliance Fund III, L.P., AMB-SGP Mexico, LLC, and AMB Japan
    Fund I, L.P., all unconsolidated co-investment ventures;
    On July 1, 2008, the partners of AMB Partners II, L.P.
    contributed their interests in AMB Partners II, L.P.
    (previously, a consolidated co-investment venture) to AMB
    Institutional Alliance Fund III, L.P., in exchange for
    interests in AMB Institutional Alliance Fund III, L.P., an
    unconsolidated co-investment venture; and
    On July 18, 2008, acquired the remaining equity interest
    (approximately 42%) in G. Accion, S.A. de C.V. (G.
    Accion), a Mexican real estate company, increasing our
    equity interest from approximately 58% to 100%. 39




---



##### Table of Contents




    Acquired, on an owned and managed basis, 20 properties in the
    Americas, Asia and Europe aggregating approximately
    5.1 million square feet for $530.7 million, including
    11 properties aggregating approximately 2.5 million square
    feet for $326.2 million through unconsolidated
    co-investment ventures and nine properties aggregating
    approximately 2.6 million square feet for
    $204.5 million acquired directly by us;
    Committed to 20 new development projects in the Americas, Europe
    and Asia totaling approximately 6.0 million square feet
    with an estimated total investment of approximately
    $465.2 million;
    Acquired 332 acres of land for development in the Americas,
    Europe and Asia for approximately $159.3 million;
    Sold development projects aggregating approximately
    0.2 million square feet, including 0.1 million square
    feet that was held in an unconsolidated co-investment venture,
    and one
    seven-acre
    parcel of land that was held in an unconsolidated co-investment
    venture, for an aggregate sale price of $70.1 million;
    Contributed ten completed development projects aggregating
    approximately 5.1 million square feet to AMB Institutional
    Alliance Fund III, L.P., AMB-SGP Mexico, LLC, AMB Europe
    Fund I, FCP-FIS, and AMB Japan Fund I, L.P., all
    unconsolidated co-investment ventures;
    On June 13, 2008, acquired approximately 19% and on
    July 18, 2008, acquired the remaining equity interest
    (approximately 42%) in G. Accion, a Mexican real estate company,
    increasing our equity interest from approximately 39% to
    100%; and
    On July 1, 2008, the partners of AMB Partners II, L.P.
    contributed their interests in AMB Partners II, L.P.
    (previously, a consolidated co-investment venture) to AMB
    Institutional Alliance Fund III, L.P., in exchange for
    interests in AMB Institutional Alliance Fund III, L.P., an
    unconsolidated co-investment venture.      
    Obtained long-term secured debt financings for our consolidated
    joint ventures of $25.1 million with a weighted average
    interest rate of 5.9%;
    Obtained $24.9 million of secured debt (using the exchange
    rates in effect at September 30, 2008) with a weighted
    average interest rate of 5.9% for international assets;
    On July 1, 2008, the partners of AMB Partners II, L.P.
    contributed their interests in AMB Partners II, L.P. to AMB
    Institutional Alliance Fund III, L.P., in exchange for
    interests in AMB Institutional Alliance Fund III, L.P. At
    the contribution date, the outstanding balance of the
    $65.0 million non-recourse credit facility obtained by AMB
    Partners II, L.P. was repaid in full and the facility was
    terminated. Additionally, AMB Institutional Alliance
    Fund III, L.P., assumed $314.4 million of secured debt
    with a weighted average interest rate of 6.1%; and
    Obtained a $230.0 million secured term loan facility, which
    had a balance of $230.0 million outstanding as of
    September 30, 2008 and a weighted average interest rate of
    5.35%.    
    Obtained long-term secured debt financings for our consolidated
    joint ventures of $55.4 million with a weighted average
    interest rate of 5.8%;
    Assumed $36.4 million secured debt for our joint ventures
    with a weighted average interest rate of 8.6%; 40




---



##### Table of Contents




    Obtained $141.8 million of secured debt (using the exchange
    rates in effect at the applicable quarter end dates) with a
    weighted average interest rate of 2.7% for international assets;
    Sold $325.0 million aggregate principal amount of our
    senior unsecured notes under our Series C medium-term note
    program;
    Paid off $175.0 million of medium-term notes which matured
    in June 2008 and had an interest rate of 7.10%;
    Obtained and paid off a $100.0 million unsecured money
    market loan which matured in June 2008 and had an interest rate
    of 3.6%;
    Obtained and paid off a $100.0 million unsecured money
    market loan, which matured in September 2008 and had an interest
    rate of 3.4%;
    Obtained a $325.0 million unsecured term loan facility,
    which had a balance of $325.0 million outstanding as of
    September 30, 2008, with a weighted average interest rate
    of 3.5%;
    AMB Property Corporation repurchased approximately
    1.8 million shares of its common stock for an aggregate
    price of $87.7 million, at a weighted average price of
    $49.64 per share, which was paid by us in exchange for the
    cancellation of approximately 1.8 million common general
    partnership units;
    On July 1, 2008, the partners of AMB Partners II, L.P.
    contributed their interests in AMB Partners II, L.P. to AMB
    Institutional Alliance Fund III, L.P., in exchange for
    interests in AMB Institutional Alliance Fund III, L.P. At
    the contribution date, the outstanding balance of the
    $65.0 million non-recourse credit facility obtained by AMB
    Partners II, L.P. was repaid in full and the facility was
    terminated. Additionally, AMB Institutional Alliance
    Fund III, L.P., assumed $314.4 million of secured debt
    with a weighted average interest rate of 6.1%; and
    Obtained a $230.0 million secured term loan facility, which
    had a balance of $230.0 million outstanding as of
    September 30, 2008, and a weighted average interest rate of
    5.35%.    Critical
    Accounting Policies
  Form 10-K
 41




---



##### Table of Contents



CONSOLIDATED
    RESULTS OF OPERATIONS
    For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007Acquired:Number of properties


3



2



9



6Square feet (in thousands)


941



305



2,630



666Acquisition cost (in thousands)

$
68,989


$
18,635


$
204,533


$
55,459Sold or Contributed:Number of properties


6



7



20



21Square feet (in thousands)


2,143



1,423



6,062



7,812   For the
    Three Months Ended September 30, 2008 and 2007 (dollars in
    millions):
  For the Three Months Ended September 30,Revenues

2008


2007


$ Change


% ChangeRental revenuesU.S. industrial:Same store

$
123.4


$
141.9


$
(18.5
)


(13.0
)%2008 acquisitions


0.1







0.1



100.0
%2007 acquisitions


0.3



0.1



0.2



200.0
%Development


1.8



0.5



1.3



260.0
%Other industrial


4.6



0.9



3.7



411.1
%Non-U.S.
    industrial


22.8



14.4



8.4



58.3
%Total rental revenues


153.0



157.8



(4.8
)


(3.0
)%Private capital revenues


9.5



7.6



1.9



25.0
%Total revenues

$
162.5


$
165.4


$
(2.9
)


(1.8
)%    42




---



##### Table of Contents



non-U.S. industrial
  For the Three Months Ended September 30,Costs and Expenses

2008


2007


$ Change


% ChangeProperty operating costs:Rental expenses

$
25.8


$
23.3


$
2.5



10.7
%Real estate taxes


18.4



19.4



(1.0
)


(5.2
)%Total property operating costs

$
44.2


$
42.7


$
1.5



3.5
%Property operating costsU.S. industrial:Same store

$
33.8


$
38.6


$
(4.8
)


(12.4
)%2008 acquisitions


0.1







0.1



100.0
%2007 acquisitions


0.1



(0.1
)


0.2



200.0
%Development


1.4



0.5



0.9



180.0
%Other industrial


1.7



0.3



1.4



466.7
%Non-U.S.
    industrial


7.1



3.4



3.7



108.8
%Total property operating costs


44.2



42.7



1.5



3.5
%Depreciation and amortization


47.0



40.6



6.4



15.8
%General and administrative


34.4



35.1



(0.7
)


(2.0
)%Fund costs


0.3



0.3








%Other expenses


(1.1
)


0.9



(2.0
)


(222.2
)%Total costs and expenses

$
124.8


$
119.6


$
5.2



4.3
%   non-U.S. industrial
  43




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##### Table of Contents



For the Three Months Ended September 30,Other Income and (Expenses)

2008


2007


$ Change


% ChangeDevelopment profits, net of taxes

$
28.0


$
48.3


$
(20.3
)


(42.0
)%Equity in earnings of unconsolidated joint ventures, net


5.4



3.4



2.0



58.8
%Other income


(4.2
)


8.0



(12.2
)


(152.5
)%Interest expense, including amortization


(32.3
)


(29.3
)


3.0



10.2
%Total other income and (expenses), net

$
(3.1
)

$
30.4


$
(33.5
)


110.2
%     For the Three Months Ended September 30,Discontinued Operations

2008


2007


$ Change


% ChangeIncome attributable to discontinued operations, net of minority
    interests

$
0.2


$
3.3


$
(3.1
)


(93.9
)%Gains from dispositions of real estate, net of minority interests






4.0



(4.0
)


(100.0
)%Total discontinued operations

$
0.2


$
7.3


$
(7.1
)


(97.3
)%     44




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##### Table of Contents



For the Three Months Ended September 30,Preferred Units

2008


2007


$ Change


% ChangePreferred unit distributions

$
(4.0
)

$
(4.0
)

$





%Total preferred units

$
(4.0
)

$
(4.0
)







%   For the
    Nine Months Ended September 30, 2008 and 2007 (dollars in
    millions):
  For the NineMonths Ended September 30,Revenues

2008


2007


$ Change


% ChangeRental revenuesU.S. industrial:Same store

$
404.6


$
421.7


$
(17.1
)


(4.1
)%2008 acquisitions


0.1







0.1



100.0
%2007 acquisitions


1.1







1.1



100.0
%Development


3.2



3.4



(0.2
)


(5.9
)%Other industrial


15.1



2.8



12.3



439.3
%Non-U.S.
    industrial


63.0



46.9



16.1



34.3
%Total rental revenues


487.1



474.8



12.3



2.6
%Private capital revenues


60.8



22.0



38.8



176.4
%Total revenues

$
547.9


$
496.8


$
51.1



10.3
%   non-U.S. industrial
 45




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##### Table of Contents



For the NineMonths Ended September 30,Costs and Expenses

2008


2007


$ Change


% ChangeProperty operating costs:Rental expenses

$
76.8


$
70.7


$
6.1



8.6
%Real estate taxes


61.6



58.1



3.5



6.0
%Total property operating costs

$
138.4


$
128.8


$
9.6



7.5
%Property operating costsU.S. industrial:Same store

$
112.6


$
115.7


$
(3.1
)


(2.7
)%2008 acquisitions


0.1







0.1



100.0
%2007 acquisitions


0.2



(0.1
)


0.3



300.0
%Development


2.9



1.8



1.1



61.1
%Other industrial


5.3



0.9



4.4



488.9
%Non-U.S.
    industrial


17.3



10.5



6.8



64.8
%Total property operating costs


138.4



128.8



9.6



7.5
%Depreciation and amortization


129.5



121.6



7.9



6.5
%General and administrative


103.4



95.2



8.2



8.6
%Fund costs


0.9



0.8



0.1



12.5
%Impairment losses






0.3



(0.3
)


(100.0
)%Other expenses


(2.0
)


3.0



(5.0
)


(166.7
)%Total costs and expenses

$
370.2


$
349.7


$
20.5



5.9
%   non-U.S. industrial
  46




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##### Table of Contents



For the NineMonths Ended September 30,Other Income and (Expenses)

2008


2007


$ Change


% ChangeDevelopment profits, net of taxes

$
76.3


$
89.5


$
(13.2
)


(14.7
)%Gains from dispositions of real estate interests, net


20.0



74.8



(54.8
)


(73.3
)%Equity in earnings of unconsolidated joint ventures, net


14.4



7.3



7.1



97.3
%Other income


(0.1
)


20.0



(20.1
)


(100.5
)%Interest expense, including amortization


(101.0
)


(97.5
)


3.5



3.6
%Total other income and (expenses), net

$
9.6


$
94.1


$
(84.5
)


89.7
%     47




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##### Table of Contents



For the NineMonths Ended September 30,Discontinued Operations

2008


2007


$ Change


% ChangeIncome attributable to discontinued operations, net of minority
    interests

$
2.1


$
9.8


$
(7.7
)


(78.6
)%Gains from dispositions of real estate, net of minority interests


2.3



4.4



(2.1
)


(47.7
)%Total discontinued operations

$
4.4


$
14.2


$
(9.8
)


(69.0
)%     For the NineMonths Ended September 30,Preferred Units

2008


2007


$ Change


% ChangePreferred unit distributions

$
(11.9
)

$
(13.5
)

$
(1.6
)


(11.9
)%Preferred unit redemption issuance costs






(2.9
)


(2.9
)


(100.0
)%Total preferred units

$
(11.9
)

$
(16.4
)

$
(4.5
)


(27.4
)%     LIQUIDITY
    AND CAPITAL RESOURCES
  Balance Sheet Strategy. and/or
    
    cash on hand and cash flow from operations;
    private capital from co-investment partners;
    net proceeds from contributions of properties and completed
    development projects to our co-investment ventures; 48




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##### Table of Contents




    net proceeds from the sales of development projects, value-added
    conversion projects and land to third parties;
    net proceeds from divestitures of properties;
    borrowings under our unsecured credit facilities;
    other forms of secured or unsecured financing;
    assumption of debt related to acquired properties;
    proceeds from limited partnership unit offerings (including
    issuances of limited partnership units by our
    subsidiaries); and
    proceeds from equity (common and preferred) or debt securities
    offerings.    
    development, expansion and renovation of properties;
    acquisitions;
    debt service;
    distributions on outstanding common and preferred limited
    partnership units; and
    working capital.        Cash Flows.
 49




---



##### Table of Contents



co-investment
    Capital
    Resources
  Development Completions.
  For the


For theThree Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Placed in Operations:Number of projects










1



1Square feet










396,710



179,400Investment

$



$



$
17,396


$
10,657Sold:Number of projects






1



2



6Square feet










115,664



368,492Investment

$



$
8,065


$
26,249


$
51,648Contributed:Number of projects










1



7Square feet










406,156



2,037,047Investment

$



$



$
21,572


$
195,556Held for Sale or Contribution:Number of projects


2



6



12



9Square feet


771,930



1,786,465



4,777,756



2,259,647Investment

$
82,975


$
138,202


$
542,507


$
182,149Total:Number of projects


2



7



16



23Square feet


771,930



1,786,465



5,696,286



4,844,586Investment

$
82,975


$
146,267


$
607,724


$
440,010  50




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##### Table of Contents



For the


For theThree Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Number of completed development projects


1



1



4



6Number of value-added conversions






1







1Number of land parcels


1







1



Square feet


7,180



42,585



67,112



368,492Gross sales price

$
2,683


$
26,280


$
15,679


$
71,894Development profits, net of taxes

$
588


$
8,479


$
2,856


$
14,686     For the


For theThree Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Total number of contributed development assets


3



4



10



14Total square feet


2,135,747



1,334,431



5,146,343



3,005,919Development profits, net of taxes

$
27,438


$
39,819


$
73,392


$
74,800   Property Divestitures.
  Gains from Sale or Contribution of Real Estate
    Interests.
  Properties Held for Contribution. 15-20%. co-investment Accounting for the Impairment or
    Disposal of
 51




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##### Table of Contents



Long-Lived
    Assets
  Properties Held for Divestiture.
  Co-investment Ventures. Consolidation of Variable
    Interest Entities  An Interpretation of ARB
    No. 51 No. 04-5 (EITF 04-5), Determining Whether a General Partner, or the General
    Partners as a Group, Controls a Limited Partnership or Similar
    Entity When the Limited Partners Have Certain Rights SOP 78-9, Accounting for Investments in Real Estate Ventures. EITF 04-5, EITF 04-5, and/or EITF 04-5
      Approximate


OriginalOwnership


PlannedConsolidated Co-investment Venture

Co-investment Venture Partner

Percentage


Capitalization(1)AMB Institutional Alliance Fund II, L.P.(2)

AMB Institutional Alliance REIT II, Inc.


20
%

$
490,000AMB-SGP, L.P.(3)

Industrial JV Pte. Ltd.


50
%

$
420,000AMB-AMS,
    L.P.(4)

PMT, SPW and TNO(5)


39
%

$
228,000     (1)
    
    Planned capitalization includes anticipated debt and all
    partners expected equity contributions.(2)
    
    AMB Institutional Alliance Fund II, L.P. is a co-investment
    partnership formed in 2001 with institutional investors, which
    invest through a private real estate investment trust, and a
    third-party limited partner. 52




---



##### Table of Contents



(3)
    
    AMB-SGP, L.P. is a co-investment partnership formed in 2001 with
    Industrial JV Pte. Ltd., a subsidiary of GIC Real Estate Pte.
    Ltd., the real estate investment subsidiary of the Government of
    Singapore Investment Corporation.(4)
    
    AMB-AMS,
    L.P. is a co-investment partnership formed in 2004 with three
    Dutch pension funds.(5)
    
    PMT is Stichting Pensioenfonds Metaal en Techniek, SPW is
    Stichting Pensioenfonds voor de Woningcorporaties and TNO is
    Stichting Pensioenfonds TNO.      ApproximateUnconsolidated Co-investment



Ownership

PlannedVenture

Co-investment Venture Partner

Percentage

Capitalization(1)AMB Institutional Alliance Fund III, L.P.(2)(3)

AMB Institutional Alliance REIT III, Inc.


19
%

$
3,813,000AMB Europe Fund I,
    FCP-FIS(3)(4)

Institutional investors


21
%

$
1,379,000AMB Japan Fund I, L.P.(5)

Institutional investors


20
%

$
1,677,000AMB-SGP Mexico, LLC(6)

Industrial (Mexico) JV Pte. Ltd.


22
%

$
660,000AMB DFS Fund I, LLC(7)

Strategic Realty Ventures, LLC


15
%

$
439,000     (1)
    
    Planned capitalization includes anticipated debt and all
    partners expected equity contributions.(2)
    
    AMB Institutional Alliance Fund III, L.P. is an open-ended
    co-investment partnership formed in 2004 with institutional
    investors, which invest through a private real estate investment
    trust. On July 1, 2008, the partners of AMB Partners II,
    L.P. (previously, a consolidated co-investment venture)
    contributed their interests in AMB Partners II, L.P. to AMB
    Institutional Alliance Fund III, L.P. in exchange for
    interests in AMB Institutional Alliance Fund III, L.P., an
    unconsolidated co-investment venture.(3)
    
    The planned capitalization and investment capacity of AMB
    Institutional Alliance Fund III, L.P. and AMB Europe
    Fund I, FCP-FIS, as open-ended funds is not limited. The
    planned capitalization represents the gross book value of real
    estate assets as of the most recent quarter end.(4)
    
    AMB Europe Fund I, FCP-FIS, is an open-ended co-investment
    venture formed in 2007 with institutional investors. The venture
    is Euro-denominated. U.S. dollar amounts are converted at the
    exchange rate in effect at September 30, 2008.(5)
    
    AMB Japan Fund I, L.P. is a co-investment venture formed in
    2005 with institutional investors. The venture is
    Yen-denominated. U.S. dollar amounts are converted at the
    exchange rate in effect at September 30, 2008.(6)
    
    AMB-SGP Mexico, LLC is a co-investment venture formed in 2004
    with Industrial (Mexico) JV Pte. Ltd., a subsidiary of GIC Real
    Estate Pte. Ltd., the real estate investment subsidiary of the
    Government of Singapore Investment Corporation.(7)
    
    AMB DFS Fund I, LLC is a co-investment venture formed in
    2006 with a subsidiary of GE Real Estate to build and sell
    properties.     53




---



##### Table of Contents



Common and Preferred Equity. 1 2 3 4
    Debt. 50-65%
       54




---



##### Table of Contents



and/or
  Credit Facilities.
   55




---



##### Table of Contents



56




---



##### Table of Contents



Operating


Consolidated


UnsecuredPartnership


Joint


Senior


UnsecuredSecured


Venture


Debt


Credit


OtherDebt


Debt


Securities


Facilities(1)


Debt


Total2008

$
93,166


$
25,059


$



$



$
12,236


$
130,4612009


135,094



99,215



100,000







325,873



660,1822010


307,275



89,365



250,000



443,387



941



1,090,9682011


14,759



68,780



75,000



373,488



1,014



533,0412012


2,407



388,419











61,093
(4)


451,9192013


20,761



42,831



500,000







920



564,5122014


405



2,981











616



4,0022015


16,271



17,610



112,491







664



147,0362016






16,231















16,2312017






1,272















1,272Thereafter






40,119



125,000











165,119Subtotal

$
590,138


$
791,882


$
1,162,491


$
816,875


$
403,357


$
3,764,743Unamortized premiums/(discounts)


2,334



55



(8,909
)










(6,520
)Total consolidated debt

$
592,472


$
791,937


$
1,153,582


$
816,875


$
403,357


$
3,758,223AMBs share of unconsolidated co-investment venture
    debt(2)(3)






735,943











35,296



771,239Total debt(3)

$
592,472


$
1,527,880


$
1,153,582


$
816,875


$
438,653


$
4,529,462Co-investment venture partners share of consolidated
    debt(3)






(456,927
)










(48,000
)


(504,927
)Our share of total debt(3)

$
592,472


$
1,070,953


$
1,153,582


$
816,875


$
390,653


$
4,024,535Weighted average interest rate


4.7
%


5.4
%


6.0
%


2.9
%


3.8
%


4.8
%Weighted average maturity (years)


1.6



4.8



4.4



2.1



1.5



3.3     (1)
    
    Represents three credit facilities with total capacity of
    approximately $1.6 billion. Includes $329.2 million,
    $337.8 million, $114.2 million and $35.7 million
    in Yen, Canadian dollar, Euros and Singapore dollar-based
    borrowings outstanding at September 30, 2008, respectively,
    translated to U.S. dollars using the foreign exchange rates in
    effect on September 30, 2008.(2)
    
    The weighted average interest and average maturity for the
    unconsolidated co-investment venture debt were 5.1% and
    5.1 years, respectively.(3)
    
    Our share of total debt represents the pro rata portion of the
    total debt based on our percentage of equity interest in each of
    the consolidated or unconsolidated joint ventures holding the
    debt. We believe that our share of total debt is a meaningful
    supplemental measure, which enables both management and
    investors to analyze our leverage and to compare our leverage to
    that of other companies. In addition, it allows for a more
    meaningful comparison of our debt to that of other companies
    that do not consolidate their joint ventures. Our share of total
    debt is not intended to reflect our actual liability should
    there be a default under any or all of such loans or a
    liquidation of the co-investment ventures. The above table
    reconciles our share of total debt to total consolidated debt, a
    GAAP financial measure.(4)
    
    Maturity includes $60.0 million balance outstanding on a
    $70.0 million non-recourse credit facility obtained by AMB
    Institutional Alliance Fund II, L.P.  57




---



##### Table of Contents



Market Capital as of September 30, 2008Units


Market


MarketSecurity

Outstanding


Price(1)


Value(1)Common general partnership units


98,101,795
(4)

$
45.30


$
4,444,011Common limited partnership units(2)


3,683,016



45.30



166,841Total


101,784,811






$
4,610,852Total options outstanding










6,422,704Dilutive effect of stock options and restricted stock(3)










1,803,167     (1)
    
    Assumes that our general partnership units are exchanged for AMB
    Property Corporations common stock on a one-for-one basis
    because there is no public market for our units.(2)
    
    Includes class B common limited partnership units issued by
    AMB Property II, L.P.(3)
    
    Computed using the treasury stock method and an average share
    price for AMB Property Corporations common stock of $47.53
    for the quarter ended September 30, 2008.(4)
    
    Includes 905,220 shares of unvested restricted stock.  Preferred Units as of September 30, 2008Distribution


Liquidation


Redemption/CallableSecurity

Rate


Preference


ProvisionsSeries D preferred units(1)


7.18
%

$
79,767



February 2012Series L preferred stock


6.50
%


50,000



June 2008Series M preferred stock


6.75
%


57,500



November 2008Series O preferred stock


7.00
%


75,000



December 2010Series P preferred stock


6.85
%


50,000



August 2011Weighted average/total


6.90
%

$
312,267     (1)
    
    On January 29, 2007, all of the outstanding 7.75%
    Series D Cumulative Redeemable Preferred Limited
    Partnership Units of AMB Property II, L.P. were transferred from
    one institutional investor to another institutional investor. In
    connection with that transfer, AMB Property II, L.P. agreed to
    amend the terms of the series D preferred units to, among
    other things, change the rate applicable to the series D
    preferred units from 7.75% to 7.18% and change the date prior to
    which the series D preferred units may not be redeemed from
    May 5, 2004 to February 22, 2012.  Capitalization Ratios as of September 30, 2008Total debt-to-total market capitalization(1)


47.9
%Our share of total debt-to-our share of total market
    capitalization(1)


45.0
%Total debt plus preferred-to-total market capitalization(1)


51.2
%Our share of total debt plus preferred-to-our share of total
    market capitalization(1)


48.5
%Our share of total debt-to-our share of total book
    capitalization(1)


58.4
%     (1)
    
    Our definition of total market capitalization is
    total debt plus preferred equity liquidation preferences plus
    market equity. Our definition of our share of total market
    capitalization is our share of total debt plus preferred
    equity liquidation preferences plus market equity. Our
    definition of market equity is the total number of
    outstanding shares of AMB Property Corporations common
    stock and our common limited partnership units multiplied by the
    closing price per share of AMB Property Corporations
    common stock as of September 30, 2008. Our definition of
    preferred is preferred equity liquidation
    preferences. Our share of total book capitalization
    is defined as our share of total debt plus minority interests to
    preferred unitholders and limited partnership unitholders plus
    partners capital. Our share of total debt is
    the pro rata portion of the total debt based on our percentage
    of equity interest in each of the consolidated and
    unconsolidated co-investment ventures holding the debt. We
    believe that our share of total debt is a meaningful
    supplemental measure, which 58




---



##### Table of Contents



enables both management and investors to analyze our leverage
    and to compare our leverage to that of other companies. In
    addition, it allows for a more meaningful comparison of our debt
    to that of other companies that do not consolidate their
    co-investment ventures. Our share of total debt is not intended
    to reflect our actual liability should there be a default under
    any or all of such loans or a liquidation of the co-investment
    ventures. For a reconciliation of our share of total debt to
    total consolidated debt, a GAAP financial measure, please see
    the table of debt maturities and capitalization above.  Liquidity
          For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,Paying Entity

Security

2008


2007


2008


2007Operating Partnership

Common limited partnership units

$
0.520


$
0.500


$
1.560


$
1.500Operating Partnership

Series J preferred units(1)


n/a



n/a



n/a


$
1.005Operating Partnership

Series K preferred units(1)


n/a



n/a



n/a


$
1.005AMB Property II, L.P.

Class B common limited
    partnership units

$
0.520


$
0.500


$
1.560


$
1.500AMB Property II, L.P.

Series D preferred units

$
0.898


$
0.898


$
2.693


$
2.738AMB Property II, L.P.

Series I preferred units(2)


n/a



n/a



n/a


$
1.244     (1)
    
    In April 2007, we redeemed all of our series J and
    series K preferred units.(2)
    
    In April 2007, AMB Property II, L.P. repurchased all of its
    series I preferred units.     59




---



##### Table of Contents



For the Nine MonthsEnded September 30,Summary of Distributions Paid

2008


2007(Dollars in thousands)Net cash provided by operating activities

$
240,031


$
216,935Dividends paid to partners


(163,081
)


(156,165
)Distributions to minority interests, including preferred units


(63,563
)


(113,910
)Excess (shortfall) of net cash provided by operating activities
    over distributions paid

$
13,387


$
(53,140
)Net proceeds from divestiture of real estate

$
403,637


$
502,267Excess of net cash provided by operating activities and net
    proceeds from divestiture of real estate over distributions paid

$
417,024


$
449,127   Capital
    Commitments
    For the Three Months Ended September 30,


For the Nine Months Ended September 30,2008


2007


2008


2007The Americas:Number of new development projects


5



9



15



20Number of value-added conversion projects(1)














1Square feet


1,126,541



2,327,175



4,464,298



5,415,497Estimated total investment(1)

$
72,922


$
181,345


$
316,995


$
407,670Europe:Number of new development projects


2



2



3



2Square feet


477,465



504,288



817,906



504,288Estimated total investment(1)

$
59,419


$
51,652


$
91,580


$
51,652Asia:Number of new development projects










2



3Square feet










694,315



2,027,859Estimated total investment(1)

$



$



$
56,651


$
229,553Total:Number of new development projects


7



11



20



25Number of value-added conversion projects














1Square feet


1,604,006



2,831,463



5,976,519



7,947,644Estimated total investment(1)

$
132,341


$
232,997


$
465,226


$
688,875  60




---



##### Table of Contents



(1)
    
    Includes total estimated cost of development, renovation, or
    expansion, including initial acquisition costs, prepaid ground
    leases, buildings, and associated carry costs. Estimated total
    investments are based on current forecasts and are subject to
    change.
    Non-U.S.
    dollar investments are translated into U.S. dollars using the
    exchange rate as of September 30, 2008 or 2007, as
    applicable.  Lease Commitments. on-tarmac
  Co-Investment Ventures.
  Captive Insurance Company.
  Potential Contingent and Unknown
    Liabilities.
  
    liabilities for environmental conditions;
    claims of customers, vendors or other persons dealing with our
    predecessors prior to our formation or acquisition transactions
    that had not been asserted prior to our formation or acquisition
    transactions;
    accrued but unpaid liabilities incurred in the ordinary course
    of business; and
    tax liabilities. 61




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##### Table of Contents



Capital
    Deployment
    For the Three Months Ended September 30,


For the Nine Months Ended September 30,2008


2007


2008


2007The Americas:Acres


38



92



197



1,026Estimated build out potential (square feet)


674,488



1,444,220



3,537,632



17,996,473Investment(1)

$
9,201


$
65,755


$
88,436


$
165,951Europe:Acres


16







61



Estimated build out potential (square feet)


400,029







1,282,347



Investment(1)

$
11,813


$



$
36,186


$
Asia:Acres


36



16



74



19Estimated build out potential (square feet)


1,654,137



398,264



2,838,973



787,264Investment(1)

$
19,090


$
5,645


$
34,683


$
18,645Total:Acres


90



108



332



1,045Estimated build out potential (square feet)


2,728,654



1,842,484



7,658,952



18,783,737Investment(1)

$
40,104


$
71,400


$
159,305


$
184,596     (1)
    
    Includes acquisition and associated closing costs. 62




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##### Table of Contents



For the Three Months Ended September 30,


For the Nine Months Ended September 30,2008


2007


2008


2007Number of properties acquired by AMB Institutional Alliance
    Fund III, L.P.


4



5



8



18Square feet


625,038



986,161



1,622,649



3,815,577Expected investment

$
70,638


$
83,284


$
171,694


$
311,803Number of properties acquired by AMB Europe Fund I, FCP-FIS






1



3



5Square feet






122,924



848,313



1,468,239Expected investment

$



$
9,384


$
154,499


$
134,779Number of properties acquired by AMB Japan Fund I,
    L.P.






1







8Square feet






44,566







1,107,261Expected investment

$



$
4,957


$



$
180,901Number of properties acquired by AMB-SGP Mexico, LLC














3Square feet














1,739,976Expected investment

$



$



$



$
69,688Number of properties acquired by AMB Property, L.P.


3



2



9



6Square feet


941,412



304,777



2,630,318



665,829Expected investment

$
68,990


$
18,635


$
204,533


$
55,459Total number of properties acquired


7



9



20



40Total square feet


1,566,450



1,458,428



5,101,280



8,796,882Total acquisition cost

$
137,218


$
113,601


$
517,325


$
738,158Total acquisition capital


2,410



2,659



13,401



14,472Total expected investment

$
139,628


$
116,260


$
530,726


$
752,630   OFF-BALANCE
    SHEET ARRANGEMENTS
  Standby Letters of Credit.
  Guarantees and Contribution
    Obligations.
     63




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##### Table of Contents



Euro 364-day
  Performance and Surety Bonds.
  Promoted Interests and Other Contractual
    Obligations.
  SUPPLEMENTAL
    EARNINGS MEASURES
  Funds From Operations (FFO) and Funds From
    Operations Per Share and Unit
    (FFOPS).
   64




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##### Table of Contents



65




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##### Table of Contents



For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007Net income available to common
    unitholders(1)

$
25,204


$
71,942


$
140,931


$
210,248Income available to common unitholders attributable to limited
    partners


(1,005
)


(2,787
)


(4,685
)


(7,973
)(Gains) losses from sale or contribution of real estate, net of
    minority interests


12



(3,912
)


(22,158
)


(79,172
)Depreciation and amortization:Total depreciation and amortization


46,985



40,628



129,493



121,641Discontinued operations depreciation


4



354



61



1,853Non-real estate depreciation


(1,997
)


(1,387
)


(5,786
)


(3,965
)Adjustments to derive FFO from consolidated co-investment
    ventures:Co-investment venture partners minority interests (Net
    income)


4,194



5,890



29,393



21,088Limited partnership unitholders minority interests (Net
    income)


(137
)


581



2,518



4,903Limited partnership unitholders minority interests
    (Development gains)


1,090



2,115



2,795



3,861Discontinued operations minority interests (Net income)


8



139



316



423FFO attributable to minority interests


(8,819
)


(15,731
)


(41,812
)


(47,347
)Adjustments to derive FFO from unconsolidated co-investment
    ventures:Our share of net income


(5,372
)


(3,425
)


(14,359
)


(7,286
)Our share of FFO


11,589



9,828



32,727



21,308Funds from operations

$
71,756


$
104,235


$
249,434


$
239,582Basic FFO per common unit

$
0.71


$
1.01


$
2.46


$
2.37Diluted FFO per common unit

$
0.70


$
0.99


$
2.41


$
2.31Weighted average common units:Basic


101,119,207



102,917,908



101,312,811



101,229,730Diluted


102,922,373



105,109,868



103,430,421



103,777,347     (1)
    
    Includes gains from undepreciated land sales of
    $0.9 million for the three and nine months ended
    September 30, 2008. Includes no gains from undepreciated
    land sales and $0.2 million of gains from undepreciated
    land sales for the three and nine months ended
    September 30, 2007, respectively.  SS NOI.
 66




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##### Table of Contents



For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2008


2007


2008


2007Net income

$
29,156


$
75,897


$
152,787


$
226,642Private capital revenues


(9,502
)


(7,564
)


(60,838
)


(22,007
)Depreciation and amortization


46,985



40,628



129,493



121,641General and administrative


34,415



35,145



103,361



95,259Fund costs


312



261



919



779Impairment losses














257Other expenses


(1,088
)


944



(1,926
)


2,995Total other income and expenses


3,150



(30,353
)


(9,568
)


(94,141
)Total minority interests share of income


5,581



7,495



38,897



28,708Total discontinued operations


(173
)


(7,312
)


(4,429
)


(14,166
)Net Operating Income (NOI)


108,836



115,141



348,696



345,967Less non same store NOI


(17,714
)


(24,441
)


(76,654
)


(79,485
)Less non-cash adjustments(1)


14



(339
)


(711
)


(3,457
)Cash basis same store NOI

$
91,136


$
90,361


$
271,331


$
263,025     (1)
    
    Non-cash adjustments include straight-line rents and
    amortization of lease intangibles for the same store pool only. 67




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##### Table of Contents



OWNED AND
    MANAGED OPERATING AND LEASING STATISTICS
  Owned and
    Managed Operating and Leasing Statistics(1)
    Operating PortfolioSquare feet owned(2)(3)


129,618,917Occupancy percentage(3)


95.4
%Average occupancy percentage


95.3
%Weighted average lease terms (years):Original


6.2Remaining


3.4Trailing four quarter tenant retention


72.4
%Trailing four quarter rent change on renewals and rollovers:(4)Percentage


4.1
%Same space square footage commencing (millions)


18.4Trailing four quarter second generation leasing
    activity:(5)Tenant improvements and leasing commissions per sq. ft.:Retained

$
1.42Re-tenanted

$
3.15Weighted average

$
1.99Square footage commencing (millions)


21.8     (1)
    
    Schedule includes owned and managed operating properties,
    defined as properties in which we have at least a 10% ownership
    interest, for which we are the property or asset manager and
    which we currently intend to hold for the long-term. This
    excludes development and renovation projects and recently
    completed development projects available for sale or
    contribution.(2)
    
    As of September 30, 2008, one of our subsidiaries also
    managed approximately 1.1 million additional square feet of
    properties representing the IAT portfolio on behalf of the IAT
    Air Cargo Facilities Income Fund. As of September 30, 2008,
    we also had investments in 7.4 million square feet of
    operating properties through our investments in non-managed
    unconsolidated joint ventures and 0.1 million square feet,
    which is the location of our global headquarters.(3)
    
    On a consolidated basis, we had approximately 70.8 million
    rentable square feet with an occupancy rate of 95.0% at
    September 30, 2008.(4)
    
    Rent changes on renewals and rollovers are calculated as the
    difference, weighted by square feet, of the net ABR due the
    first month of a term commencement and the net ABR due the
    last month of the former customers term. If free rent is
    granted, then the first positive full rent value is used as a
    point of comparison. The rental amounts exclude base stop
    amounts, holdover rent and premium rent charges. If either the
    previous or current lease terms are under 12 months, then
    they are excluded from this calculation. If the lease is first
    generation or there is no prior lease for comparison, then it is
    excluded from this calculation.(5)
    
    Second generation tenant improvements and leasing commissions
    per square foot are the total cost of tenant improvements,
    leasing commissions and other leasing costs incurred during
    leasing of second generation space divided by the total square
    feet leased. Costs incurred prior to leasing available space are
    not included until such space is leased. Second generation space
    excludes newly developed square footage or square footage vacant
    at acquisition. 68




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##### Table of Contents



Owned and
    Managed Same Store Operating Statistics(1)
    For the Three


For the NineMonths Ended


Months EndedSeptember 30,


September 30,Same Store Pool(2)

2008


2008Square feet in same store pool(3)


100,910,875



100,910,875% of total square feet


77.9
%


77.9
%Occupancy percentage(3)


95.2
%


95.2
%Average occupancy percentage


95.1
%


95.1
%Weighted average lease terms (years):Original


5.9



5.9Remaining


3.0



3.0Trailing four quarter tenant retention


72.3
%


72.3
%Trailing four quarters rent change on renewals and
    rollovers:(4)Percentage


3.5
%


3.5
%Same space square footage commencing (millions)


17.7



17.7Growth % increase (decrease) (including straight-line rents):Revenues(5)


4.1
%


4.6
%Expenses(5)


6.3
%


5.5
%Net operating income(5)(6)


3.3
%


4.3
%Growth % increase (decrease) (excluding straight-line rents):Revenues(5)


4.3
%


5.0
%Expenses(5)


6.3
%


5.5
%Net operating income(5)(6)


3.5
%


4.9
%     (1)
    
    Schedule includes owned and managed operating properties,
    defined as properties in which we have at least a 10% ownership
    interest, for which we are the property or asset manager and
    which we currently intend to hold for the long-term. This
    excludes development and renovation projects and recently
    completed development projects available for sale or
    contribution.(2)
    
    Same store pool includes all properties that are owned as of
    both the current and prior year reporting periods and excludes
    development properties for both the current and prior reporting
    years. The same store pool is set annually and excludes
    properties purchased and developments stabilized (generally
    defined as properties that are 90% leased or properties that
    have been substantially complete for at least 12 months)
    after December 31, 2006.(3)
    
    On a consolidated basis, we had approximately 65.0 million
    square feet with an occupancy rate of 95.1% at
    September 30, 2008.(4)
    
    Rent changes on renewals and rollovers are calculated as the
    difference, weighted by square feet, of the net ABR due the
    first month of a term commencement and the net ABR due the
    last month of the former customers term. If free rent is
    granted, then the first positive full rent value is used as a
    point of comparison. The rental amounts exclude base stop
    amounts, holdover rent and premium rent charges. If either the
    previous or current lease terms are under 12 months, then
    they are excluded from this calculation. If the lease is first
    generation or there is no prior lease for comparison, then it is
    excluded from this calculation.(5)
    
    For the three months ended September 30, 2008, on a
    consolidated basis, the percentage change was 1.3%, 2.7% and
    0.8%, respectively, for revenues, expenses and NOI (including
    straight-line rents) and 1.5%, 2.7% and 1.1%, respectively, for
    revenues, expenses and NOI (excluding straight-line rents). For
    the nine months ended September 30, 2008, on a consolidated
    basis, the percentage change was 2.4%, 2.4% and 2.4%,
    respectively, for 69




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##### Table of Contents



revenues, expenses and NOI (including straight-line rents) and
    2.9%, 2.4% and 3.1%, respectively, for revenues, expenses and
    NOI (excluding straight-line rents).(6)
    
    See Part I, Item 2: Managements Discussion
    and Analysis of Financial Condition and Results of
    Operations  Supplemental Earnings Measures for
    a discussion of same store net operating income and cash-basis
    same store net operating income and a reconciliation of same
    store net operating income and cash-basis same store net
    operating income and net income.  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk      2008


2009


2010


2011


2012


Thereafter


Total


Fair ValueFixed rate debt(1)

$
17,925


$
484,472


$
406,486


$
142,009


$
379,261


$
844,590


$
2,274,743


$
2,198,430Average interest rate


6.4
%


3.9
%


6.5
%


6.6
%


5.9
%


6.2
%


5.7
%


n/aVariable rate debt(2)

$
112,536


$
175,710


$
684,482


$
391,032


$
72,658


$
53,582


$
1,490,000


$
1,425,020Average interest rate


1.7
%


3.7
%


3.9
%


3.0
%


5.0
%


6.0
%


3.6
%


n/aInterest payments

$
2,152


$
25,364


$
53,699


$
21,292


$
26,046


$
55,677


$
184,230



n/a     (1)
    
    Represents 60.4% of all outstanding debt at September 30,
    2008.(2)
    
    Represents 39.6% of all outstanding debt at September 30,
    2008.      Financial Instruments.
 70




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##### Table of Contents



Maturity DatesDecember 31,


September 27,


NotionalRelated Derivatives (In thousands)

2008


2009


Amount


Fair ValueInterest Rate Swaps (USD)Notional Amount





$
325,000


$
325,000Receive Floating(%)






US LIBORPay Fixed Rate(%)






2.50
%Fair Market Value (USD)






2,201






$
2,201Foreign Exchange Forward ContractsFX Forward Contract, EuroNotional Amount (USD)

$
166,469






$
166,469Forward Strike Rate


1.4412/31/08 Forward Rate as of 9/30/2008


1.35Fair Market Value (USD)

$
3,742










$
3,742FX Forward Contract, GBPNotional Amount (USD)

$
80,819






$
80,819Forward Strike Rate


1.8012/31/08 Forward Rate as of 9/30/2008


1.79Fair Market Value (USD)

$
1,007










$
1,007$
572,288


$
6,950   International Operations.
    Item 4.
    Controls
    and Procedures   71




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##### Table of Contents



Rule 13a-15(b)
   72




---



##### Table of Contents



PART II  Item 1.
    Legal
    Proceedings   Item 1A.  Risk
    Factors  Form 10-K
  If the
    global market and economic crisis intensifies or continues in
    the long-term, disruptions in the capital and credit markets may
    adversely affect our business, results of operations, cash flows
    and financial condition.
       73




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##### Table of Contents



Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information    74




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##### Table of Contents



Item 6.
    Exhibits  No. 001-13545.
  ExhibitNumber

Description10
.1

Credit Agreement, dated as of September 4, 2008, by and
    among AMB Property, L.P., as Borrower, the banks listed on the
    signature pages thereto, The Bank of Nova Scotia, as
    Administrative Agent, ING Real Estate Finance (USA) LLC, as
    Syndication Agent, The Bank of Nova Scotia and ING Real Estate
    Finance (USA) LLC, as Joint Lead Arrangers and Joint
    Bookrunners, and TD Bank N.A. and US Bank, National Association,
    as Documentation Agents. (incorporated by reference to
    Exhibit 10.1 of AMB Property, L.P.s Current Report on
    Form 8-K
    filed on September 5, 2008).10
.2

Guaranty of Payment, dated as of September 4, 2008, by AMB
    Property Corporation, as Guarantor, for the benefit of The Bank
    of Nova Scotia, as Administrative Agent for the banks that are
    from time to time parties to that certain Credit Agreement,
    dated as of September 4, 2008, among AMB Property, L.P., as
    the Borrower, the banks listed on the signature pages thereto,
    the Administrative Agent, ING Real Estate Finance (USA) LLC, as
    Syndication Agent, The Bank of Nova Scotia and ING Real Estate
    Finance (USA) LLC, as Joint Lead Arrangers and Joint
    Bookrunners, and TD Bank N.A. and US Bank, National Association,
    as Documentation Agents. (incorporated by reference to
    Exhibit 10.2 of AMB Property, L.P.s Current Report on
    Form 8-K
    filed on September 5, 2008).31
.1

Rule 13a-14(a)/15d-14(a)
    Certifications dated November 12, 2008.32
.1

18 U.S.C. § 1350 Certifications dated
    November 12, 2008. The certifications in this exhibit are
    being furnished solely to accompany this report pursuant to
    18 U.S.C. § 1350, and are not being filed for purposes
    of Section 18 of the Securities Exchange Act of 1934, as
    amended, and are not to be incorporated by reference into any of
    our filings, whether made before or after the date hereof,
    regardless of any general incorporation language in such filing.  75




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##### Table of Contents



SIGNATURES
    By:
    AMB PROPERTY,
    L.P., RegistrantBy:
    AMB
    Property Corporation, its general partner
  By:
    /s/  Hamid
    R. Moghadam   Chairman of the Board and
 Chief Executive Officer
 (Duly Authorized Officer and
  Principal Executive Officer)
  By:
    /s/  Thomas
    S. Olinger   Chief Financial Officer
 (Duly Authorized Officer and
  Principal Financial Officer)
  By:
    /s/  Nina
    A. Tran   Senior Vice President and
 Chief Accounting Officer
 (Duly Authorized Officer and
  Principal Accounting Officer)
   76