##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|  |  |                                                      |  | 
|- |  | ---------------------------------------------------- |  | 
|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
|  |  | THE SECURITIES EXCHANGE ACT OF 1934                 
|  |  |                                                     
|  |  | For the quarterly period ended March 31, 2003       
|  |  |                                                     
|  |  | OR                                                  
|  |  |                                                     
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|  |  | THE SECURITIES EXCHANGE ACT OF 1934                 

Commission File Number: 001-14162

GLENBOROUGH REALTY TRUST INCORPORATED
(Exact name of registrant as specified in its charter)

|                                        |  |                    
|--------------------------------------- |  | -------------------
|Maryland                                |  | 94-3211970         
|(State or other jurisdiction            |  | (I.R.S. Employer   
|of incorporation or organization)       |  | Identification No.)
|                                        |  |                    
|400 South El Camino Real,               |  |                    
|Suite 1100, San Mateo, California       |  |                    
|(650) 343-9300                          |  | 94402-1708         
|(Address of principal executive offices |  | (Zip Code)         
|and telephone number)                   |  |                    

Securities registered under Section 12(b) of the Act:

|                                                            |  |                        
|----------------------------------------------------------- |  | -----------------------
|                                                            |  | Name of Exchange       
|Title of each class:                                        |  | on which registered:   
|Common Stock, $.001 par value                               |  | New York Stock Exchange
|7.75% Series A Convertible Preferred Stock, $.001 par value |  | New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes x  No o

As of May 9, 2003, 27,792,331 shares of Common Stock ($.001 par value) and
10,092,800 shares of 7.75% Series A Convertible Preferred Stock ($.001 par
value, $25.00 per share liquidation preference) were outstanding.





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TABLE OF CONTENTS



|                                                                                               |                                                                                          |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                                                 
|Item 1. Consolidated Financial Statements of Glenborough Realty Trust Incorporated (Unaudited)
|                                                                                               | Consolidated Balance Sheets at March 31, 2003 and December 31, 2002                     
|                                                                                               | Consolidated Statements of Income for the three months ended March 31, 2003 and 2002    
|                                                                                               | Consolidated Statement of Stockholders Equity for the three months ended March 31, 2003
|                                                                                               | Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002
|                                                                                               | Notes to Consolidated Financial Statements                                              
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations 
|Item 3. Qualitative and Quantitative Information About Market Risk                            
|Item 4. Controls and Procedures                                                               
|PART II. OTHER INFORMATION                                                                    
|Item 1. Legal Proceedings                                                                     
|Item 4. Submission of Matters to a Vote of Security Holders                                   
|Item 6. Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                                                                                    
|EXHIBIT INDEX                                                                                 
|EXHIBIT 10.1                                                                                  
|EXHIBIT 10.2                                                                                  
|EXHIBIT 10.3                                                                                  
|EXHIBIT 10.4                                                                                  
|EXHIBIT 10.5                                                                                  
|EXHIBIT 10.6                                                                                  
|EXHIBIT 12.1                                                                                  
|EXHIBIT 99.1                                                                                  
|EXHIBIT 99.2                                                                                  



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##### Table of Contents



INDEX
GLENBOROUGH REALTY TRUST INCORPORATED

|              |  |                                                                                         |                                                                                          |    |       |         
|------------- |  | --------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | -- | ----- | --------
|              |  |                                                                                         |                                                                                          |    |       | Page No.
|PART I        |  | FINANCIAL INFORMATION                                                                   |                                                                                          |    |      
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 1.       |  | Consolidated Financial Statements of Glenborough Realty
Trust Incorporated (Unaudited): |                                                                                          |    |      
|              |  |                                                                                         |                                                                                          |    |       |         
|              |  |                                                                                         | Consolidated Balance Sheets at March 31, 2003 and
December 31, 2002                      |    |       | 3       
|              |  |                                                                                         |                                                                                          |    |       |         
|              |  |                                                                                         | Consolidated Statements of Income for the three months
ended March 31, 2003 and 2002     |    |       | 4       
|              |  |                                                                                         |                                                                                          |    |       |         
|              |  |                                                                                         | Consolidated Statement of Stockholders Equity for the
three months ended March 31, 2003 |    | 5    
|              |  |                                                                                         |                                                                                          |    |       |         
|              |  |                                                                                         | Consolidated Statements of Cash Flows for the three
months ended March 31, 2003 and 2002 |    |       | 6-7     
|              |  |                                                                                         |                                                                                          |    |       |         
|              |  |                                                                                         | Notes to Consolidated Financial Statements                                               |    |       | 8-21    
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 2.       |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations   |                                                                                          |    | 22-29
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 3.       |  | Qualitative and Quantitative Information About Market Risk                              |                                                                                          |    | 29   
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 4.       |  | Controls and Procedures                                                                 |                                                                                          |    | 30   
|              |  |                                                                                         |                                                                                          |    |       |         
|PART II       |  | OTHER INFORMATION                                                                       |                                                                                          |    |      
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 1.       |  | Legal Proceedings                                                                       |                                                                                          |    | 30   
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 4.       |  | Submission of Matters to a Vote of Security Holders                                     |                                                                                          |    | 30   
|              |  |                                                                                         |                                                                                          |    |       |         
|Item 6.       |  | Exhibits and Reports on Form 8-K                                                        |                                                                                          |    | 30   
|              |  |                                                                                         |                                                                                          |    |       |         
|SIGNATURES    |  |                                                                                         |                                                                                          | 31
|              |  |                                                                                         |                                                                                          |    |       |         
|EXHIBIT INDEX |  |                                                                                         | 34                                                                                       |   

2



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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

GLENBOROUGH REALTY TRUST INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited)

|                                        |                                                                                                                                                                                 |                            |              |                                            |         |           |           |           |              |           |           | 
|--------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------ | ------------------------------------------ | ------- | --------- | --------- | --------- | ------------ | --------- | --------- | 
|                                        |                                                                                                                                                                                 |                            |              |                                            |         | March 31, |           |           | December 31, |          
|                                        |                                                                                                                                                                                 |                            |              |                                            |         | 2003      |           |           | 2002         |          
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |           |           |           |              |          
|ASSETS                                  |                                                                                                                                                                                 |                            |              |                                            |         |           |           |          
|                                        | Rental properties, gross                                                                                                                                                        |                            | $            | 1,391,575                                  |         |           | $         | 1,323,939 |             
|                                        | Accumulated depreciation                                                                                                                                                        |                            |              | (181,353                                   | )       |           |           | (171,701  | )           
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|                                        | Rental properties, net                                                                                                                                                          |                            |              | 1,210,222                                  |         |           |           | 1,152,238 |             
|                                        | Properties held for sale (net of accumulated
depreciation of $8,336
and $12,291 at March 31, 2003 and December 31, 2002,
respectively)                                          |                            |              | 37,267                                     |         |           |           | 95,697    |             
|                                        | Investments in land and development                                                                                                                                             |                            |              | 75,389                                     |         |           |           | 78,529    |             
|                                        | Investments in unconsolidated operating joint ventures                                                                                                                          |                            |              | 7,936                                      |         |           |           | 7,822     |             
|                                        | Mortgage loans receivable                                                                                                                                                       |                            |              | 42,548                                     |         |           |           | 41,813    |             
|                                        | Cash and cash equivalents                                                                                                                                                       |                            |              | 10,057                                     |         |           |           | 5,029     |             
|                                        | Other assets                                                                                                                                                                    |                            |              | 50,410                                     |         |           |           | 52,735    |             
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|                                        |                                                                                                                                                                                 |                            | TOTAL ASSETS |                                            | $       | 1,433,829 |           |           | $            | 1,433,863 |          
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|LIABILITIES AND STOCKHOLDERS EQUITY    |                                                                                                                                                                                 |                            |              |                                            |         |           |           |          
|Liabilities:                            |                                                                                                                                                                                 |                            |              |                                            |         |           |           |          
|                                        | Mortgage loans                                                                                                                                                                  |                            | $            | 668,253                                    |         |           | $         | 605,996   |             
|                                        | Unsecured bank line                                                                                                                                                             |                            |              | 56,796                                     |         |           |           | 76,204    |             
|                                        | Obligations associated with properties held for sale                                                                                                                            |                            |              | 19,592                                     |         |           |           | 56,705    |             
|                                        | Other liabilities                                                                                                                                                               |                            |              | 25,814                                     |         |           |           | 22,490    |             
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|                                        |                                                                                                                                                                                 | Total liabilities          |              |                                            | 770,455 |           |           |           | 761,395      |          
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|Commitments and contingencies (Note 13) |                                                                                                                                                                                 |                            |              |                                            |         |           |           |          
|Minority interest                       |                                                                                                                                                                                 |                            | 40,325       |                                            |         |           | 40,910    |          
|Stockholders Equity:                   |                                                                                                                                                                                 |                            |              |                                            |         |           |           |          
|                                        | Common stock, $0.001 par value, 27,792,331 and 27,927,698
shares issued and outstanding at March 31, 2003 and
December 31, 2002, respectively                                   |                            |              | 28                                         |         |           |           | 28        |             
|                                        | Preferred stock, $0.001 par value, $25.00 liquidation
preference, 10,092,800 and 10,097,800 shares issued and
outstanding at
March 31, 2003 and December 31, 2002, respectively |                            |              | 10                                         |         |           |           | 10        |             
|                                        | Additional paid-in capital                                                                                                                                                      |                            |              | 782,569                                    |         |           |           | 785,051   |             
|                                        | Deferred compensation                                                                                                                                                           |                            |              | (3,696                                     | )       |           |           | (3,897    | )           
|                                        | Distributions in excess of accumulated earnings                                                                                                                                 |                            |              | (155,862                                   | )       |           |           | (149,634  | )           
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|                                        |                                                                                                                                                                                 | Total stockholders equity |              |                                            | 623,049 |           |           |           | 631,558      |          
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |          
|                                        |                                                                                                                                                                                 |                            |              | TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY |         | $         | 1,433,829 |           |              | $         | 1,433,863 | 
|                                        |                                                                                                                                                                                 |                            |              |                                            |         |           |          

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

3



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GLENBOROUGH REALTY TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31, 2003 and 2002
(in thousands, except share and per share amounts)
(Unaudited)

|                                                                                                      |                                                               |                |            |        |        |   |            |        |        | 
|----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | -------------- | ---------- | ------ | ------ | - | ---------- | ------ | ------ | 
|                                                                                                      |                                                               |                |            | 2003   |        |   | 2002       |       
|                                                                                                      |                                                               |                |            |        |        |   |            |       
|REVENUE                                                                                               |                                                               |                |            |        |        |   |            |       
|                                                                                                      | Rental revenue                                                |                | $          | 46,840 |        |   | $          | 40,383 |       
|                                                                                                      | Fees and reimbursements from affiliates                       |                |            | 806    |        |   |            | 1,041  |       
|                                                                                                      | Interest and other income                                     |                |            | 808    |        |   |            | 2,887  |       
|                                                                                                      | Equity in earnings of unconsolidated
operating joint ventures |                |            | 123    |        |   |            | 58     |       
|                                                                                                      |                                                               |                |            |        |        |  
|                                                                                                      |                                                               | Total revenue  |            |        | 48,577 |   |            |        | 44,369 | 
|                                                                                                      |                                                               |                |            |        |        |  
|EXPENSES                                                                                              |                                                               |                |            |        |        |   |            |       
|                                                                                                      | Property operating expenses                                   |                |            | 16,050 |        |   |            | 12,113 |       
|                                                                                                      | General and administrative                                    |                |            | 3,786  |        |   |            | 3,217  |       
|                                                                                                      | Depreciation and amortization                                 |                |            | 13,473 |        |   |            | 10,631 |       
|                                                                                                      | Interest expense                                              |                |            | 9,237  |        |   |            | 8,174  |       
|                                                                                                      | Provision for impairment of real estate assets                |                |            | 2,272  |        |   |            |       |       
|                                                                                                      |                                                               |                |            |        |        |  
|                                                                                                      |                                                               | Total expenses |            |        | 44,818 |   |            |        | 34,135 | 
|                                                                                                      |                                                               |                |            |        |        |  
|Income before minority interest and discontinued
operations                                           |                                                               |                | 3,759      |        |        |   | 10,234     |       
|Minority interest                                                                                     |                                                               |                | (613       | )      |        |   | (651       | )     
|                                                                                                      |                                                               |                |            |        |        |  
|Income before discontinued operations                                                                 |                                                               |                | 3,146      |        |        |   | 9,583      |       
|Discontinued operations (including net gain on
sales of $4,450 and $0 in 2003 and 2002,
respectively) |                                                               |                | 7,508      |        |        |   | 1,108      |       
|                                                                                                      |                                                               |                |            |        |        |  
|Net income                                                                                            |                                                               |                | 10,654     |        |        |   | 10,691     |       
|Preferred dividends                                                                                   |                                                               |                | (4,891     | )      |        |   | (4,891     | )     
|Discount on preferred stock repurchases                                                               |                                                               |                | 17         |        |        |   |           |       
|                                                                                                      |                                                               |                |            |        |        |  
|Net income available to Common Stockholders                                                           |                                                               | $              | 5,780      |        |        | $ | 5,800      |       
|                                                                                                      |                                                               |                |            |        |        |  
|Basic Per Share Data:                                                                                 |                                                               |                |            |        |        |   |            |       
|Income (loss) available to Common Stockholders
before discontinued operations                         |                                                               | $              | (0.04      | )      |        | $ | 0.17       |       
|Discontinued operations                                                                               |                                                               |                | 0.25       |        |        |   | 0.04       |       
|                                                                                                      |                                                               |                |            |        |        |  
|Net income available to Common Stockholders                                                           |                                                               | $              | 0.21       |        |        | $ | 0.21       |       
|                                                                                                      |                                                               |                |            |        |        |  
|Basic weighted average shares outstanding                                                             |                                                               |                | 27,732,118 |        |        |   | 27,006,349 |       
|                                                                                                      |                                                               |                |            |        |        |  
|Diluted Per Share Data:                                                                               |                                                               |                |            |        |        |   |            |       
|Income (loss) available to Common Stockholders
before discontinued operations                         |                                                               | $              | (0.04      | )      |        | $ | 0.17       |       
|Discontinued operations                                                                               |                                                               |                | 0.25       |        |        |   | 0.04       |       
|                                                                                                      |                                                               |                |            |        |        |  
|Net income available to Common Stockholders                                                           |                                                               | $              | 0.21       |        |        | $ | 0.21       |       
|                                                                                                      |                                                               |                |            |        |        |  
|Diluted weighted average shares outstanding                                                           |                                                               |                | 30,744,142 |        |        |   | 30,540,254 |       
|                                                                                                      |                                                               |                |            |        |        |  

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

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GLENBOROUGH REALTY TRUST INCORPORATED
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
For the three months ended March 31, 2003
(in thousands)
(Unaudited)

|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |   |        |             |           |                  |          |   |  |   |         |  
|-------------------------------------------------------------------- |  | ------------ | ------ | - | --------------- | - | -- | ------ |  |  | --------- | - |  | ------- | -- |  | ------------ | ---------- | ------- | -------- | -------- | - | ------ | ----------- | --------- | ---------------- | -------- | - |  | - | ------- | -
|                                                                     |  | Common Stock |        |   | Preferred Stock |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |  
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |  
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |   |        |             |           | Distributions in |          |   |  |   |        
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              | Additional |         |          |          |   |        |             | excess of |                  |          |   |  |  
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              | Paid-in    |         |          | Deferred |   |        | accumulated |           |                  |          |   | 
|                                                                     |  | Shares       |        |   | Par Value       |   |    | Shares |  |  | Par Value |   |  | Capital |    |  | Compensation |            |         | earnings |          |   | Total  |            
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |   |        |            
|Balance at December 31, 2002                                         |  |              | 27,928 |   |                 | $ | 28 |        |  |  | 10,098    |   |  | $       | 10 |  |              | $          | 785,051 |          |          | $ | (3,897 | )           |           | $                | (149,634 | ) |  | $ | 631,558 |  
|Exercise of stock options                                            |  |              | 3      |   |                 |   |   |        |  |  |          |   |  |         |   |  |              |            | 40      |          |          |   |       |             |           |                  |         |   |  |   | 40      |  
|Common and preferred stock repurchases                               |  |              | (139   | ) |                 |   |   |        |  |  | (5        | ) |  |         |   |  |              |            | (2,408  | )        |          |   |       |             |           |                  |         |   |  |   | (2,408  | )
|Amortization of deferred compensation                                |  |              |       |   |                 |   |   |        |  |  |          |   |  |         |   |  |              |            |        |          |          |   | 201    |             |           |                  |         |   |  |   | 201     |  
|Discount on preferred stock repurchases                              |  |              |       |   |                 |   |   |        |  |  |          |   |  |         |   |  |              |            | (17     | )        |          |   |       |             |           |                  | 17       |   |  |   |        |  
|Reallocation of limited partners
interests in Operating Partnership |  |              |       |   |                 |   |   |        |  |  |          |   |  |         |   |  |              |            | (97     | )        |          |   |       |             |           |                  |         |   |  |   | (97     | )
|Dividends paid to common and preferred
stockholders                  |  |              |       |   |                 |   |   |        |  |  |          |   |  |         |   |  |              |            |        |          |          |   |       |             |           |                  | (16,899  | ) |  |   | (16,899 | )
|Net income                                                           |  |              |       |   |                 |   |   |        |  |  |          |   |  |         |   |  |              |            |        |          |          |   |       |             |           |                  | 10,654   |   |  |   | 10,654  |  
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |   |        |            
|Balance at March 31, 2003                                            |  |              | 27,792 |   |                 | $ | 28 |        |  |  | 10,093    |   |  | $       | 10 |  |              | $          | 782,569 |          |          | $ | (3,696 | )           |           | $                | (155,862 | ) |  | $ | 623,049 |  
|                                                                     |  |              |        |   |                 |   |    |        |  |  |           |   |  |         |    |  |              |            |         |          |          |   |        |            

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

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GLENBOROUGH REALTY TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2003 and 2002
(in thousands)
(Unaudited)

|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |        |       |         |        |         |  
|-------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ----------------------------------------- | ------- | ------- | ------ | ----- | ------- | ------ | ------- | -
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         | 2003    |        |       | 2002    |       
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |        |       |         |       
|Cash flows from operating activities:                                                                                |                                                                                   |                                                                                             |                                           |         |         |        |       |        
|                                                                                                                     | Net income                                                                        |                                                                                             | $                                         | 10,654  |         |        | $     | 10,691  |       
|                                                                                                                     | Adjustments to reconcile net income to net cash
provided by operating activities: |                                                                                             |                                           |         |         |        |       |         |       
|                                                                                                                     |                                                                                   | Depreciation and amortization (including
discontinued operations)                           |                                           |         | 14,293  |        |       |         | 12,397 |        
|                                                                                                                     |                                                                                   | Amortization of loan fees, included in
interest expense (including discontinued
operations) |                                           |         | 803     |        |       |         | 484    |        
|                                                                                                                     |                                                                                   | Accrued interest on mortgage loans receivable                                               |                                           |         | (735    | )      |       |         | (479   | )      
|                                                                                                                     |                                                                                   | Minority interest in income from operations                                                 |                                           |         | 613     |        |       |         | 651    |        
|                                                                                                                     |                                                                                   | Equity in earnings of unconsolidated
operating joint ventures                               |                                           |         | (123    | )      |       |         | (58    | )      
|                                                                                                                     |                                                                                   | Net gain on sales of real estate assets                                                     |                                           |         | (4,450  | )      |       |         |       |        
|                                                                                                                     |                                                                                   | Provision for impairment of real estate assets                                              |                                           |         | 2,272   |        |       |         |       |        
|                                                                                                                     |                                                                                   | Amortization of deferred compensation                                                       |                                           |         | 201     |        |       |         | 42     |        
|                                                                                                                     |                                                                                   | Changes in certain assets and liabilities, net                                              |                                           |         | (2,561  | )      |       |         | (508   | )      
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|                                                                                                                     |                                                                                   |                                                                                             | Net cash provided by operating activities |         |         | 20,967 |       |         |        | 23,220  |  
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|Cash flows from investing activities:                                                                                |                                                                                   |                                                                                             |                                           |         |         |        |       |        
|                                                                                                                     | Net proceeds from sales of rental property                                        |                                                                                             |                                           | 77,979  |         |        |       |        |       
|                                                                                                                     | Acquisitions of rental property                                                   |                                                                                             |                                           | (69,508 | )       |        |       | (47,570 | )     
|                                                                                                                     | Payments for capital and tenant improvements                                      |                                                                                             |                                           | (9,562  | )       |        |       | (7,397  | )     
|                                                                                                                     | Investments in land and development                                               |                                                                                             |                                           | (3,890  | )       |        |       | (4,545  | )     
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|                                                                                                                     |                                                                                   |                                                                                             | Net cash used for investing activities    |         |         | (4,981 | )     |         |        | (59,512 | )
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|Cash flows from financing activities:                                                                                |                                                                                   |                                                                                             |                                           |         |         |        |       |        
|                                                                                                                     | Proceeds from borrowings                                                          |                                                                                             |                                           | 93,569  |         |        |       | 65,789  |       
|                                                                                                                     | Repayment of borrowings                                                           |                                                                                             |                                           | (84,209 | )       |        |       | (13,162 | )     
|                                                                                                                     | Distributions to minority interest holders                                        |                                                                                             |                                           | (1,295  | )       |        |       | (1,345  | )     
|                                                                                                                     | Dividends paid to common and preferred stockholders                               |                                                                                             |                                           | (16,899 | )       |        |       | (16,475 | )     
|                                                                                                                     | Exercise of stock options                                                         |                                                                                             |                                           | 40      |         |        |       | 4,290   |       
|                                                                                                                     | Repurchases of common stock                                                       |                                                                                             |                                           | (2,300  | )       |        |       | (734    | )     
|                                                                                                                     | Repurchases of preferred stock                                                    |                                                                                             |                                           | (108    | )       |        |       |        |       
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|                                                                                                                     |                                                                                   | Net cash (used for)/provided by financing
activities                                        |                                           |         | (11,202 | )      |       |         | 38,363 |        
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|Net increase in cash and cash equivalents                                                                            |                                                                                   |                                                                                             | 4,784                                     |         |         |        | 2,071 |        
|Cash and cash equivalents at beginning of period,
including $244 at properties held for sale as of December
31, 2002 |                                                                                   |                                                                                             | 5,273                                     |         |         |        | 4,410 |        
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       
|Cash and cash equivalents at end of period                                                                           |                                                                                   | $                                                                                           | 10,057                                    |         |         | $      | 6,481 |        
|                                                                                                                     |                                                                                   |                                                                                             |                                           |         |         |       

continued

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

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##### Table of Contents



GLENBOROUGH REALTY TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS  continued
For the three months ended March 31, 2003 and 2002
(in thousands)
(Unaudited)

|                                                                        |                                                                                                        |  |      |       |  |      |   |       |  
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ |  | ---- | ----- |  | ---- | - | ----- | -
|                                                                        |                                                                                                        |  | 2003 |       |  | 2002 |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|Supplemental disclosure of cash flow information:                       |                                                                                                        |  |      |       |  |      |   |      
|                                                                        |                                                                                                        |  |      |       |  |      |   |      
|                                                                        | Cash paid for interest (net of capitalized
interest of $1,084 and $983 in 2003 and
2002, respectively) |  | $    | 8,336 |  |      | $ | 8,883 |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|Supplemental disclosure of non-cash investing
and financing activities: |                                                                                                        |  |      |       |  |      |   |      
|                                                                        |                                                                                                        |  |      |       |  |      |   |      
|                                                                        | Reclassification of real estate assets
from investments in land and development                        |  | $    | 4,768 |  |      | $ |      |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|                                                                        | Acquisition of joint venture from
development alliance                                                 |  | $    |      |  |      | $ | 427   |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|                                                                        | Note receivable from sale of investment in
development                                                 |  | $    |      |  |      | $ | 3,775 |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|                                                                        | Reallocation of limited partners
interests in Operating Partnership                                   |  | $    | 97    |  |      | $ |      |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|                                                                        | Conversion of Operating Partnership units
into common stock, at market value on date
of issuance       |  | $    |      |  |      | $ | 109   |  
|                                                                        |                                                                                                        |  |      |       |  |      |  
|                                                                        | Unrealized loss on marketable securities                                                               |  | $    |      |  |      | $ | (29   | )
|                                                                        |                                                                                                        |  |      |       |  |      |  

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

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##### Table of Contents






GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

Note 1. ORGANIZATION

Glenborough Realty Trust Incorporated (the Company) was incorporated in the
State of Maryland on August 26, 1994. The Company commenced operations on
January 1, 1996. The Company has elected to qualify as a real estate investment
trust (REIT) under the Internal Revenue Code of 1986, as amended (the
Code). The common and preferred stock of the Company (the Common Stock and
the Preferred Stock, respectively) are listed on the New York Stock Exchange
(NYSE) under the trading symbols GLB and GLB Pr A, respectively.

As of March 31, 2003, 27,792,331 shares of Common Stock and 10,092,800 shares
of Preferred Stock were issued and outstanding. Common and preferred shares
authorized are 188,000,000 and 12,000,000, respectively. Assuming the issuance
of 3,012,024 shares of Common Stock issuable upon redemption of 3,012,024
partnership units in the Operating Partnership (as defined below), there would
be 30,804,355 shares of Common Stock outstanding as of March 31, 2003. In 1999
and 2000, the Companys Board of Directors authorized the repurchase of up to
8,210,700 shares of Common Stock and 3,450,000 shares of Preferred Stock. As of
March 31, 2003, 6,318,016 shares of Common Stock and 1,407,200 shares of
Preferred Stock have been repurchased at a total cost of approximately $126
million.

The Companys Preferred Stock has a $25.00 per share liquidation preference and
is convertible at any time at the option of the holder thereof into shares of
Common Stock at an initial conversion price of $32.83 per share of Common Stock
(equivalent to a conversion rate of 0.7615 shares of Common Stock for each
share of Series A Convertible Preferred Stock), subject to adjustment in
certain circumstances. On and after January 16, 2003, the Series A Preferred
Stock may be redeemed at the option of the Company, in whole or in part,
initially at 103.88% of the liquidation preference per share, and thereafter at
prices declining to 100% of the liquidation preference on and after January 16,
2008, plus in each case accumulated, accrued and unpaid dividends, if any, to
the redemption date.

To maintain the Companys qualification as a REIT, no more than 50% of the
value of the outstanding shares of the Company may be owned, directly or
indirectly, by five or fewer individuals (defined to include certain entities),
applying certain constructive ownership rules. To help ensure that the Company
will not fail this test, the Companys Articles of Incorporation provide for
certain restrictions on the transfer of the Common Stock to prevent further
concentration of stock ownership.

The Company, through its majority owned subsidiaries, is engaged primarily in
the ownership, operation, management, leasing, acquisition, expansion and
development of various income-producing properties. The Companys principal
consolidated subsidiary, in which it holds a 1% general partner interest and an
89.22% limited partner interest at March 31, 2003, is Glenborough Properties,
L.P. (the Operating Partnership). Each of the holders of the remaining
interests in the Operating Partnership (OP Units) has the option to redeem
its OP Units and to receive, at the option of the Company, in exchange for each
OP Unit, either (i) one share of common stock of the Company, or (ii) cash
equal to the fair market value of one share of common stock of the Company. As
of March 31, 2003, the Operating Partnership, directly and through the
subsidiaries in which it and the Company own 100% of the ownership interests,
controls a portfolio of 70 real estate projects.

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements present the consolidated financial
position of the Company and its subsidiaries as of March 31, 2003 and December
31, 2002, and the consolidated results of operations and cash flows of the
Company and its subsidiaries for the three months ended March 31, 2003 and
2002. All significant intercompany transactions, receivables and payables have
been eliminated in consolidation.

In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (consisting of only normal accruals) necessary to
present fairly the financial position and results of operations of the Company
as of March 31, 2003, and for the period then ended.

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

Reclassifications

Certain prior year balances have been reclassified to conform to the current
year presentation, with no effect on consolidated results of operations.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the results of operations during the reporting
period. Actual results could differ from those estimates.

New Accounting Pronouncements

In November 2002, the FASB approved for issuance FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on
the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of FIN 45 are applicable on a prospective basis to guarantees issued
or modified after December 31, 2002. The disclosure requirements are effective
for financial statements of interim and annual periods ending after December
15, 2002.

In December 2002, the FASB approved for issuance SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure. SFAS 148 amends SFAS 123
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirements of SFAS 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The measurement provisions of SFAS 148 are effective for fiscal years
beginning after December 15, 2002. The disclosure provisions are effective for
financial statements of interim and annual periods ending after December 15,
2002. This standard did not have a material impact on the Companys
consolidated financial position or results of operations since the Company did
not adopt the fair value based method of accounting for stock based
compensation.

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date.
It applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. FIN 46 may be applied
prospectively with a cumulative-effect adjustment as of the date on which it is
first applied or by restating previously issued financial statements for one or
more years with a cumulative-effect adjustment as of the beginning of the first
year restated. The disclosure requirements of FIN 46 are effective for all
financial statements initially issued after January 31, 2003. It is possible
that certain of the entities through which and with which the Company conducts
business, including those described in Notes 5 and 7 will be deemed to be
Variable Interest Entities under the provisions of FIN 46. The total assets and
liabilities of such entities were approximately $262 million and $195 million
at March 31, 2003. The Companys maximum exposure to loss would be equal to
its investments in these arrangements, plus the related debt guarantees, as
described in Note 5. The disclosures provided reflect managements
understanding and analysis of FIN 46 based upon information currently
available. The evaluation of the Companys various arrangements is ongoing and
is subject to change in the event additional interpretive guidance is provided
by the Financial Accounting Standards Board or others.

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

Stock Based Compensation

At March 31, 2003, the Company has an employee stock incentive plan. The
Company accounts for stock options and bonus grants in the plan under the
recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. For incentive stock
options, no stock-based employee compensation cost is reflected in net income
as all options granted under the plan have an exercise price equal to the
market value of the underlying Common Stock on the date of grant. The options
vest over periods between 1 and 6 years, and have a maximum term of 10 years.
As of March 31, 2003 and 2002, 266,241 and 103,062 shares, respectively, of
bonus grants were outstanding under the Plan. The fair value of the shares
granted has been recorded as deferred compensation in the accompanying
financial statements and is being charged to earnings ratably over the
respective vesting periods that range from 5 to 10 years. As a result,
additional compensation expense of $201,249 and $41,973 was recognized during
the three months ended March 31, 2003 and 2002, respectively, which is included
in general and administrative expense on the accompanying consolidated
statements of income.

As permitted by Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (SFAS 123), the Company has not
changed its method of accounting for stock options but has provided the
additional required disclosures. Had compensation cost for the Companys
stock-based compensation plans been determined based on the fair value at the
grant dates for awards under those plans, consistent with the method of SFAS
No. 123, the Companys net income and earnings per share would have been
reduced to the pro forma amounts indicated below (in thousands except for per
share amounts):

|                                            |  |                         |  |   |       |                    |  |   |                    |   |  | 
|------------------------------------------- |  | ----------------------- |  | - | ----- | ------------------ |  | - | ------------------ | - |  | 
|                                            |  |                         |  |   |       | Three months ended |  |   | Three months ended |  
|                                            |  |                         |  |   |       | March 31, 2003     |  |   | March 31, 2002     |  
|                                            |  |                         |  |   |       |                    |  |   |                    |  
|Net income available to
Common Stockholders |  | As reported             |  | $ | 5,780 |                    |  | $ | 5,800              |  
|                                            |  | SFAS No. 123 Adjustment |  |   | (602  | )                  |  |   | (1,155             | )
|                                            |  |                         |  |   |       |                    |  |   |                   
|                                            |  | Pro forma               |  | $ | 5,178 |                    |  | $ | 4,645              |  
|                                            |  |                         |  |   |       |                    |  |   |                    |  
|Basic earnings per share                    |  | As reported             |  | $ | 0.21  |                    |  | $ | 0.21               |  
|                                            |  | SFAS No. 123 Adjustment |  |   | (0.02 | )                  |  |   | (0.04              | )
|                                            |  |                         |  |   |       |                    |  |   |                   
|                                            |  | Pro forma               |  | $ | 0.19  |                    |  | $ | 0.17               |  
|                                            |  |                         |  |   |       |                    |  |   |                    |  
|Diluted earnings per share                  |  | As reported             |  | $ | 0.21  |                    |  | $ | 0.21               |  
|                                            |  | SFAS No. 123 Adjustment |  |   | (0.02 | )                  |  |   | (0.04              | )
|                                            |  |                         |  |   |       |                    |  |   |                   
|                                            |  | Pro forma               |  | $ | 0.19  |                    |  | $ | 0.17               |  
|                                            |  |                         |  |   |       |                    |  |   |                    |  

Rental Properties

Rental properties are stated at cost, net of accumulated depreciation, unless
circumstances indicate that such amount cannot be recovered, in which case, the
carrying value of the property is reduced to estimated fair value. Estimated
fair value: (i) is based upon the Companys plans for the continued operation
of each property; and (ii) is computed using estimated sales price, as
determined by prevailing market values for comparable properties and/or the use
of capitalization rates multiplied by annualized net operating income based
upon the age, construction and use of the building. The fulfillment of the
Companys plans related to each of its properties is dependent upon, among
other things, the presence of economic conditions which will enable the Company
to continue to hold and operate the properties prior to their eventual sale.
Due to uncertainties inherent in the valuation process and in the economy, it
is reasonably possible that the actual results of operating and disposing of
the Companys properties could be materially different than current
expectations.

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

Depreciation is provided using the straight line method over the useful lives
of the respective assets. The useful lives are as follows:

|                           |  |                          
|-------------------------- |  | -------------------------
|Buildings and Improvements |  | 5 to 40 years            
|Tenant Improvements        |  | Term of the related lease
|Furniture and Equipment    |  | 5 to 7 years             

Expenditures for maintenance and repairs are charged to operations as incurred.
Maintenance expenditures include planned major maintenance activities such as
painting, paving, HVAC and roofing repair costs. The Company expenses costs as
incurred and does not accrue in advance of planned major maintenance
activities. Significant renovations or betterments that extend the economic
useful lives of assets are capitalized.

Investments in Land and Development

The Company, through mezzanine loans and equity contributions, invests in
various development alliances with projects currently under development. The
interest on advances and other direct project costs incurred by the Company are
capitalized to the investments during the period in which the projects are
under development. See Note 5 for further discussion.

Investments in Unconsolidated Operating Joint Ventures

The Companys investments in operating joint ventures are accounted for using
the equity method. The Company does not hold a controlling interest in any
operating joint venture. See Note 6 for further discussion.

Mortgage Loans Receivable

The Company monitors the recoverability of its mortgage loans receivable
through ongoing contact with the borrowers to ensure timely receipt of interest
and principal payments, and where appropriate, obtains financial information
concerning the operation of the properties. Interest on mortgage loans
receivable is recognized as revenue as it accrues during the period the loan is
outstanding. Mortgage loans receivable will be evaluated for impairment if it
becomes evident that the borrower is unable to meet its debt service
obligations in a timely manner and cannot satisfy its payments using sources
other than the operations of the property securing the loan. If it is concluded
that such circumstances exist, then such loan will be considered to be impaired
and its recorded amount will be reduced to the estimated fair value of the
collateral securing it. Interest income will also cease to accrue under such
circumstances. Due to uncertainties inherent in the valuation process, it is
reasonably possible that the amount ultimately realized from the Companys
collection on its mortgage loans receivable will be different than the recorded
amounts. See Note 7 for further discussion.

Cash and Cash Equivalents

The Company considers short-term investments (including certificates of
deposit) with a maturity of three months or less at the time of investment to
be cash equivalents.

Derivative Financial Instruments

The Company may use derivative financial instruments in the event that it
believes such instruments will be an effective hedge against fluctuations in
interest rates on a specific borrowing. Derivative financial instruments such
as forward rate agreements or interest rate swaps may be used in this capacity.
To the extent such instruments do not qualify as hedges, they will be accounted
for on a mark-to-market basis and recorded in earnings each period as
appropriate.

At March 31, 2003 and December 31, 2002, the Company was not a party to any
open interest rate protection agreements other than the interest rate cap
contract entered into in December 2001 as discussed in Note 9.

Deferred Financing and Other Fees

Fees paid in connection with the financing and leasing of the Companys
properties, including costs allocated to the origination of leases in place at
properties acquired by the Company, are amortized over the term of the related
notes payable or leases and are included in other assets.

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

Minority Interest

Minority interest represents the 9.78% and 9.74% limited partner interests in
the Operating Partnership not held by the Company at March 31, 2003 and
December 31, 2002, respectively. The Company periodically adjusts the carrying
value of minority interest to reflect its share of the book value of the
Operating Partnership. Such adjustments are recorded to stockholders equity as
a reallocation of limited partnership interest in the Operating Partnership.

Revenues

The Company recognizes rental revenue on a straight-line basis at amounts that
it believes it will collect on a tenant by tenant basis. The estimation process
may result in higher or lower levels from period to period as the Companys
collection experience and the credit quality of the Companys tenants changes.
Actual amounts collected could be lower or higher than the amounts recognized
on a straight-line basis if specific tenants are unable to pay rent that the
Company has previously recognized as revenue, or if other tenants pay rent whom
the Company previously estimated would not. SFAS No. 141 requires the Company
to allocate a portion of the purchase price of a building to above market and
below market rate leases. An above market rate lease creates an asset which is
amortized over the lease term of the leases in the acquired building and
results in a reduction to rental revenue. A below market rate lease creates a
liability which is amortized over the lease term of the leases in the acquired
building and results in an increase to rental revenue. The unamortized
portions of these obligations are included in other assets and other
liabilities in the accompanying consolidated balance sheets.

The Companys portfolio of leases turns over continuously, with the number and
value of expiring leases varying from year to year. The Companys ability to
re-lease the space to existing or new tenants at rates equal to or greater than
those realized historically is impacted by, among other things, the economic
conditions of the market in which a property is located, the availability of
competing space, and the level of improvements which may be required at the
property. No assurance can be given that the rental rates that the Company
will obtain in the future will be equal to or greater than those obtained under
existing contractual commitments.

Reimbursements from tenants for real estate taxes and other recoverable
operating expenses are recognized as revenue in the period the applicable
expenses are incurred. Differences between estimated and actual amounts are
recognized in the subsequent year.

For the three months ended March 31, 2003 and 2002, no single tenant
represented 10% or more of the rental revenue of the Company.

Fee and reimbursement revenue consists of property management fees, asset
management fees, and transaction fees from the acquisition, disposition,
refinancing, leasing and construction supervision of real estate for
unconsolidated affiliates.

Sales of Real Estate

The Company recognizes sales of real estate when a contract has been executed,
a closing has occurred, the buyers initial and continuing investment is
adequate to demonstrate a commitment to pay for the property and the Company
does not have a substantial continuing involvement in the property. Each
property is considered a separately identifiable component of the Company and
is reported in discontinued operations when the operations and cash flows of
the property have been (or will be) eliminated from the ongoing operations of
the Company as a result of a disposal transaction.

Income Taxes

The Company has elected to be taxed as a real estate investment trust under
Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the
Code). A real estate investment trust is generally not subject to federal
income tax on that portion of its real estate investment trust taxable income
(Taxable Income) that is distributed to its stockholders, provided that at
least 90% of Taxable Income is distributed and other requirements are met.

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

Reference to 2002 Audited Financial Statements

These unaudited financial statements should be read in conjunction with the
Notes to Consolidated Financial Statements included in the 2002 audited
financial statements.

Note 3. ACQUISITIONS OF RENTAL PROPERTY

In the first quarter of 2003, the Company acquired 1525 Wilson Boulevard, a
305,000 square foot office building located in Arlington, Virginia. The total
acquisition cost of approximately $71 million was funded with a new $50 million
mortgage loan (as discussed in Note 9) and the proceeds from the disposition of
several industrial properties in the fourth quarter of 2002, as well as two
industrial property sales in the first quarter of 2003, as discussed below.
SFAS No. 141 requires that for business combinations initiated after June 30,
2001, the acquirer allocate a portion of acquisition cost to intangible assets
and liabilities in applying the purchase method of accounting. Intangible
assets related to lease origination and above market rate leases recognized in
the 1525 Wilson Boulevard transaction amounted to $1.6 million. Liabilities
related to below market rate leases amounted to $695,000.

Note 4. DISPOSITIONS OF RENTAL PROPERTY

In the first quarter of 2003, the Company sold seven properties, including four
industrial, two office and one multifamily. These assets were sold for an
aggregate sales price of $79.9 million and generated a net gain of
approximately $4,450,000.

The seven properties sold in the first quarter of 2003 were:

|                        |  |             |  |                     |  |              |  |                |   |  |               |              |         |  |       | 
|----------------------- |  | ----------- |  | ------------------- |  | ------------ |  | -------------- | - |  | ------------- | ------------ | ------- |  | ----- | 
|                        |  |             |  |                     |  |              |  |                |   |  |               | Total Square
|Property                |  | Type        |  | Location            |  | Date of Sale |  | Building Count |   |  | Footage/Units
|                        |  |             |  |                     |  |              |  |                |   |  |              
|Covance Business Center |  | Industrial  |  | Indianapolis, IN    |  | 1/8/03       |  |                | 1 |  |               |              | 333,600 |  | sf   
|Bellanca Airport Park   |  | Industrial  |  | Los Angeles, CA     |  | 1/30/03      |  |                | 1 |  |               |              | 84,201  |  | sf   
|Buschwood III           |  | Office      |  | Tampa, FL           |  | 3/25/03      |  |                | 1 |  |               |              | 77,095  |  | sf   
|Clark Avenue            |  | Office      |  | King of Prussia, PA |  | 3/27/03      |  |                | 1 |  |               |              | 40,000  |  | sf   
|Valley Forge VII        |  | Industrial  |  | Norristown, PA      |  | 3/27/03      |  |                | 1 |  |               |              | 25,700  |  | sf   
|Canyons                 |  | Multifamily |  | Fort Worth, TX      |  | 3/28/03      |  |                | 1 |  |               |              | 349     |  | units
|Valley Forge IV         |  | Industrial  |  | Norristown, PA      |  | 3/31/03      |  |                | 1 |  |               |              | 51,600  |  | sf   

In accordance with SFAS 144 Accounting for the Impairment or Disposal of Long
Lived Assets, the gain on sale and the related operating results from these
sold properties are classified as discontinued operations in the accompanying
consolidated statements of income for all periods presented. In addition, real
estate properties classified as held for sale are presented separately on the
consolidated balance sheet with the related results from operations classified
as discontinued operations in the accompanying consolidated statements of
income for all periods presented. There was one property classified as held
for sale at March 31, 2003 and four properties classified as held for sale at
December 31, 2002.

The major classes of assets and liabilities of properties classified as held
for sale at March 31, 2003 and December 31, 2002 are (dollars in thousands):

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

|            |                           |                                                      |   |        |        |  |      |         |        | 
|----------- | ------------------------- | ---------------------------------------------------- | - | ------ | ------ |  | ---- | ------- | ------ | 
|            |                           |                                                      |   | 2003   |        |  | 2002 |        
|            |                           |                                                      |   |        |        |  |      |        
|ASSETS      |                           |                                                      |   |        |        |  |      |        
|            | Rental properties, gross  |                                                      | $ | 42,281 |        |  | $    | 104,154 |       
|            | Accumulated depreciation  |                                                      |   | (8,336 | )      |  |      | (12,291 | )     
|            |                           |                                                      |   |        |        | 
|            | Rental properties, net    |                                                      |   | 33,945 |        |  |      | 91,863  |       
|            | Cash and cash equivalents |                                                      |   |       |        |  |      | 244     |       
|            | Other assets              |                                                      |   | 3,322  |        |  |      | 3,590   |       
|            |                           |                                                      |   |        |        | 
|            |                           | Properties held for sale                             |   | $      | 37,267 |  |      | $       | 95,697 | 
|            |                           |                                                      |   |        |        | 
|LIABILITIES |                           |                                                      |   |        |        |  |      |        
|            | Mortgage loans            |                                                      | $ | 19,229 |        |  | $    | 52,717  |       
|            | Other liabilities         |                                                      |   | 363    |        |  |      | 3,988   |       
|            |                           |                                                      |   |        |        | 
|            |                           | Obligations associated with
properties held for sale |   | $      | 19,592 |  |      | $       | 56,705 | 
|            |                           |                                                      |   |        |        | 

Below is a summary of the results of operations of sold and held for sale
properties through their respective disposition dates, if applicable (dollars
in thousands):

|                                               |  |                    |       |  |      |   |       | 
|---------------------------------------------- |  | ------------------ | ----- |  | ---- | - | ----- | 
|                                               |  | Three months ended |      
|                                               |  | March 31,          |      
|                                               |  |                    |      
|                                               |  | 2003               |       |  | 2002 |  
|                                               |  |                    |       |  |      |  
|Rental revenue                                 |  | $                  | 5,817 |  |      | $ | 6,550 | 
|                                               |  |                    |       |  |      |  
|Property operating expenses                    |  |                    | 1,392 |  |      |   | 2,384 | 
|Depreciation and amortization                  |  |                    | 820   |  |      |   | 1,766 | 
|Interest expense                               |  |                    | 547   |  |      |   | 1,292 | 
|                                               |  |                    |       |  |      |  
|Total expenses                                 |  |                    | 2,759 |  |      |   | 5,442 | 
|                                               |  |                    |       |  |      |  
|Income before net gain on sales of real
estate |  |                    | 3,058 |  |      |   | 1,108 | 
|Net gain on sales of real estate               |  |                    | 4,450 |  |      |   |      | 
|                                               |  |                    |       |  |      |  
|Discontinued operations                        |  | $                  | 7,508 |  |      | $ | 1,108 | 
|                                               |  |                    |       |  |      |  

Note 5. INVESTMENTS IN LAND AND DEVELOPMENT

The Company is independently developing approximately 96,000 square feet of
commercial property, which is substantially completed and currently in the
stabilization phase, in New Jersey. As of March 31, 2003, the Company had
invested approximately $13.3 million in this project. Additionally, the Company
has approximately 88 acres of land with a book value of approximately $20.4
million as of March 31, 2003. This land has potential for future development of
approximately 1,175,000 square feet of office space. The Company is obligated
to fund approximately $820,000 towards these developments in 2003. The loans
secured by certain of these development properties contain recourse provisions
to the Company in the aggregate amount of $14.8 million; however, some of the
loans were not fully drawn as of March 31, 2003.

The Company is currently involved in a number of alliances organized in limited
liability companies and stock corporations which could ultimately result in the
development of approximately 938,000 square feet of commercial and mixed-use
properties in California and Colorado. These projects are currently in three
different phases of development: approximately 425,000 square feet is
substantially completed and in the stabilization phase, 63,000 square feet is
in the predevelopment phase and 450,000 square feet is in the entitlement
phase. The alliances grant

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

the Company certain rights to purchase the properties upon completion of
development. As of March 31, 2003, the Company had an investment basis of
approximately $41.7 million in these alliances. In addition, the Company has
acquired properties from them aggregating approximately $119.8 million since
1999. In the first quarter of 2003, due to decreased leasing activity and lower
than anticipated market rents, the Company recorded a provision for impairment
totaling $2,272,000 to provide for a decrease in the carrying value of its 10%
owned development joint venture, which owns an 86,100 square foot office
property located in San Mateo, California, to its estimated fair value of zero.
The Company has no further contractual obligations for the future funding of
these developments; however, the Company will likely be funding a portion of
their working capital needs until such time as other financing is obtained.
Under these alliances, the Company has provided an aggregate of $48.7 million
in debt guarantees; however, some of the loans were not fully drawn as of March
31, 2003. These guarantees will remain in place until such time as the related
development financing has been replaced or repaid, the terms of which vary from
under 1 year to up to 2 years. The Company would be required to perform under
these guarantees in the event that the proceeds generated by the sale,
refinance or additional capital contribution by partners of the development
project were insufficient to repay the full amount of the related debt
financing. There is currently no recorded liability for any amounts that may
become payable under these guarantees, nor is there a liability for the
Companys obligation to stand-ready to fund such guarantees. In the event
that the Company must make payments under one of these guarantees, its only
recourse is to the Limited Liability Companies that own the properties. No
estimate of the amount that could be recovered by the Company in such an event
can be made at this time.

Note 6. INVESTMENTS IN UNCONSOLIDATED OPERATING JOINT VENTURES

The Companys investments in unconsolidated operating joint ventures are
accounted for using the equity method. The Company records earnings on its
investments equal to its ownership interest in the ventures earnings (losses).
Distributions are recorded as a reduction of the Companys investment.

The Companys investments in unconsolidated operating joint ventures consist of
the following as of March 31, 2003 and December 31, 2002 (dollars in
thousands):

|                     |  |                    |    |   |          |                  |         |        |         |               |  |           |      |   |       |      |  |   |       |  |  |   |       | 
|-------------------- |  | ------------------ | -- | - | -------- | ---------------- | ------- | ------ | ------- | ------------- |  | --------- | ---- | - | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|                     |  |                    |    |   |          | Property         |         | Square |         |               |  |           |      |   |       |      |  |   |       |  | 
|Joint Venture        |  | Ownership Interest |    |   | Location |                  | Footage |        |         | Property Type |  |           | 2003 |   |       | 2002 | 
|                     |  |                    |    |   |          |                  |         |        |         |               |  |           |      |   |       |      | 
|Rincon Center I & II |  |                    | 10 | % |          | San Francisco,   |         |        | 741,000 |               |  | Mixed-Use |      | $ | 4,310 |      |  | $ | 4,225 | 
|                     |  |                    |    |   |          | California       |         |        |         |               |  |           |      |   |       |      |  |   |       |  |  |  
|2000 Corporate Ridge |  |                    | 10 | % |          | McLean, Virginia |         |        | 256,000 |               |  | Office    |      |   | 3,200 |      |  |   | 3,171 | 
|Gateway Retail I     |  |                    | 50 | % |          | Denver, Colorado |         |        | 12,000  |               |  | Retail    |      |   | 426   |      |  |   | 426   | 
|                     |  |                    |    |   |          |                  |         |        |         |               |  |           |      |   |       |      |  |   |       |  |  |  
|                     |  |                    |    |   |          |                  |         |        |         |               |  |           |      |   |       |      |  | $ | 7,936 |  |  | $ | 7,822 | 
|                     |  |                    |    |   |          |                  |         |        |         |               |  |           |      |   |       |      |  |   |       |  |  |  

Note 7. MORTGAGE LOANS RECEIVABLE

The Company holds a first mortgage of approximately $42.5 million, including
accrued interest of $2.6 million at March 31, 2003, secured by land at Gateway
Park in Aurora, Colorado. Through December 31, 2002, the loan accrued interest
at a fixed rate of 13% and matured in July 2005. Effective January 1, 2003, the
loan was modified to reduce the interest rate to 6.5% as a result of changes in
prevailing market interest rates since the original date of the loan and to
extend the maturity date to July 2007. Periodic payments of interest and
principal are received on the loan from proceeds of land parcel sales in the
project. Gateway Park is a development project where the Company and the Pauls
Corporation have an alliance and where the Company has also acquired property.
In this arrangement, the Company has rights under certain conditions and
subject to certain contingencies to purchase the properties upon completion of
development and, thus, through this arrangement, the Company could acquire up
to 5 million square feet of office space over the next ten years. No loan loss
reserves have been recorded related to this loan.

Note 8. OTHER ASSETS

As of March 31, 2003 and December 31, 2002, other assets on the consolidated
balance sheets consist of the following (in thousands):

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

|                                          |  |      |        |  |      |   |        | 
|----------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                          |  | 2003 |        |  | 2002 |  
|                                          |  |      |        |  |      |  
|Accounts receivable, net                  |  | $    | 710    |  |      | $ | 2,481  | 
|Straight-line rent receivable, net        |  |      | 7,917  |  |      |   | 6,570  | 
|Prepaid expenses                          |  |      | 485    |  |      |   | 4,313  | 
|Impound accounts                          |  |      | 2,546  |  |      |   | 2,352  | 
|Note receivable                           |  |      | 3,775  |  |      |   | 3,775  | 
|Deferred leasing and financing costs, net |  |      | 28,895 |  |      |   | 27,510 | 
|Investment in management contracts        |  |      | 2,204  |  |      |   | 2,356  | 
|Corporate office fixed assets, net        |  |      | 2,550  |  |      |   | 2,601  | 
|Other                                     |  |      | 1,328  |  |      |   | 777    | 
|                                          |  |      |        |  |      |  
|Total other assets                        |  | $    | 50,410 |  |      | $ | 52,735 | 
|                                          |  |      |        |  |      |  

Note 9. SECURED AND UNSECURED LIABILITIES

The Company had the following mortgage loans and bank lines outstanding as of
March 31, 2003 and December 31, 2002 (dollars in thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |      |         |  |      |   |         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 2003 |         |  | 2002 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |      |         |  |      |  
|Secured loans with various lenders, bearing
interest at fixed rates between 4.83% and 8.13%
at March 31, 2003 and December 31, 2002, with
monthly principal and interest payments ranging
between $19 and $292 and maturing at various
dates through July 1, 2008. These loans are
secured by properties with an aggregate net
carrying value of $400,144 and $382,237 at
March 31, 2003 and December 31, 2002,
respectively.                                                                                                                                                                                                                                                                            |  | $    | 291,454 |  |      | $ | 274,966 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |      |         |  |      |   |         | 
|Secured loans with various lenders, bearing
interest at variable rates ranging between
3.30% and 3.80% at March 31, 2003, and 3.38%
and 3.88% at December 31, 2002, and maturing at
various dates through January 31, 2006. These
loans are secured by properties with an
aggregate net carrying value of $213,690 and
$198,371 at March 31, 2003 and December 31,
2002, respectively.                                                                                                                                                                                                                                                                                                                   |  |      | 162,795 |  |      |   | 149,936 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |      |         |  |      |   |         | 
|Secured loan with an insurance company, net of
unamortized discount of $1,723 and $1,801 at
March 31, 2003 and December 31, 2002,
respectively. The loan has two fixed rate
components. The fixed rate component of
$44,915 bears interest at 6.125%, matures on
November 10, 2008 and requires monthly
principal and interest payments of $296. The
fixed rate component of $92,374 bears interest
at 5.91%, matures on November 10, 2008, and
requires monthly principal and interest
payments of $595. The two components are
cross-collateralized and are secured by
properties with an aggregate net carrying value
of $199,420 and $200,956 at March 31, 2003 and
December 31, 2002, respectively. |  |      | 137,289 |  |      |   | 137,684 | 

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |  |      |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 2003 |         |  | 2002 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |  |      |  
|Secured loan with an insurance company, net
of unamortized discount of $784 and $819 at
March 31, 2003 and December 31, 2002,
respectively. The loan has both a fixed rate
and a variable rate component. The fixed rate
component of $51,969 bears interest at
6.125%, matures on November 10, 2008, and
requires monthly principal and interest
payments of $343. The variable rate component
of $43,974 bears interest at a floating rate
of 30-day LIBOR plus 3.25% with an absolute
floor of 5% (5% at March 31, 2003 and
December 31, 2002), matures on December 11,
2004, and requires monthly interest-only
payments. The two components are
cross-collateralized and are secured by
properties with an aggregate net carrying
value of $156,488 and $157,248 at March 31,
2003 and December 31, 2002, respectively. |  |      | 95,944  |  |      |   | 96,127  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |  |      |  
|Total mortgage loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |      | 687,482 |  |      |   | 658,713 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |  |      |  
|Unsecured $180,000 line of credit with a
group of commercial banks (Credit Facility)
with a variable interest rate of 30-day LIBOR
plus 1.525% (2.83% and 2.91% at March 31,
2003 and December 31, 2002, respectively),
monthly interest only payments and a maturity
date of September 19, 2005, with one one-year
extension option.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |      | 56,796  |  |      |   | 76,204  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |  |      |  
|Total secured and unsecured liabilities
before adjustment for properties held for
sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | $    | 744,278 |  |      | $ | 734,917 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |      |         |  |      |  

Mortgage loans on the consolidated balance sheet as of March 31, 2003 and
December 31, 2002 are presented net of properties classified as held for sale.
The following table reconciles total secured and unsecured liabilities from the
table above to the amounts presented on the consolidated balance sheet:

|                                                           |  |      |         |   |      |   |         |  
|---------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                           |  | 2003 |         |   | 2002 |  
|                                                           |  |      |         |   |      |  
|Total mortgage loans                                       |  | $    | 687,482 |   |      | $ | 658,713 |  
|Properties held for sale (Note 4)                          |  |      | (19,229 | ) |      |   | (52,717 | )
|                                                           |  |      |         |   |      |  
|Total mortgage loans adjusted for properties
held for sale |  |      | 668,253 |   |      |   | 605,996 |  
|Unsecured bank line                                        |  |      | 56,796  |   |      |   | 76,204  |  
|                                                           |  |      |         |   |      |  
|Total secured and unsecured liabilities                    |  | $    | 725,049 |   |      | $ | 682,200 |  
|                                                           |  |      |         |   |      |  

In the first quarter of 2003, in order to finance the acquisition of 1525
Wilson Boulevard (as discussed in Note 3), the Company obtained a $50 million
loan. The loan has a maturity date of January 31, 2006 and bears interest at
the floating rate of 30-day LIBOR plus 2.25%. The interest rate on this loan
at March 31, 2003, was 3.55%.

In the first quarter of 2003, the Company closed a $17.5 million loan which is
secured by an 144,000 square foot office property located in Alexandria,
Virginia. The loan has a maturity date of March 1, 2008 and bears interest at a
fixed rate of 5%.

In the first quarter of 2003, approximately $37.2 million of the Companys
mortgage loans were paid off on the maturity dates.

In the fourth quarter of 2001, the Company closed a $52.5 million secured loan
with an insurance company (Secured Financing). The Secured Financing bears
interest at a floating rate of 30-day LIBOR plus 3.25% with an absolute floor
of 5% (5% at March 31, 2003 and December 31, 2002) and has an initial maturity
of December 11, 2004, with two one-year extension options. In connection with
the Secured Financing, the Company entered into an interest rate cap agreement
(caplets) to hedge increases in 30-day LIBOR rates above a specified level. The

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

agreement expires over a term concurrent with the Secured Financing, is indexed
to a 30-day LIBOR rate, is for a notional amount equal to the maximum amount
available on the Secured Financing, and caps 30-day LIBOR at a maximum of 6%.
As of March 31, 2003 and December 31, 2002, the 30-day LIBOR rate was 1.3% and
1.38%, respectively. The Company paid a $594,000 fee at the inception of the
cap agreement. As a result of the sale of two properties in 2002,
approximately $8.5 million of this loan was paid off and a related portion of
the caplets was cancelled. Accordingly, approximately $97,000 of the caplet fee
was charged to earnings. The remaining $497,000 fee is being charged to
earnings as the caplets expire.

Outstanding borrowings under the Credit Facility decreased from $76,204,000 at
December 31, 2002, to $56,796,000 at March 31, 2003. The decrease was due to
pay downs totaling $45,392,000 generated from the sales of properties, proceeds
of a new mortgage loan and cash flow from operations, offset by draws totaling
$25,984,000 for the acquisition of properties (as discussed in Note 3), stock
repurchases and development advances. The Credit Facility requires, among
other things, the Company to be in compliance with certain financial covenants
and ratios. The Company has been in compliance during the first three months of
2003 and remains in compliance at March 31, 2003.

Some of the Companys properties are held in limited partnerships and limited
liability companies in order to facilitate financing. All such entities are
owned 100% directly or indirectly by the Company.

The required principal payments on the Companys debt for the next five years
and thereafter, as of March 31, 2003, are as follows (in thousands). Included
in the year ending December 31, 2005, is the Credit Facility balance of $56,796
which has an initial maturity of September 19, 2005.

|             |  |   |         | 
|------------ |  | - | ------- | 
|Year Ending  |  |   |         | 
|December 31, |  |   |         | 
|             |  |   |         | 
|2003         |  | $ | 50,684  | 
|2004         |  |   | 53,209  | 
|2005         |  |   | 166,480 | 
|2006         |  |   | 156,505 | 
|2007         |  |   | 30,852  | 
|Thereafter   |  |   | 286,548 | 
|             |  |   |        
|Total        |  | $ | 744,278 | 
|             |  |   |        

Note 10. RELATED PARTY TRANSACTIONS

Fee and reimbursement income earned by the Company from related parties totaled
$806,000 and $1,041,000 for the three months ended March 31, 2003 and 2002,
respectively, and consisted of property management fees, asset management fees
and other fee income.

Note 11. EARNINGS PER SHARE

Earnings per share are as follows (in thousands, except for weighted average
shares and per share amounts):

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

|                                                      |                                         |   |                    |            |  |      |       |            | 
|----------------------------------------------------- | --------------------------------------- | - | ------------------ | ---------- |  | ---- | ----- | ---------- | 
|                                                      |                                         |   | Three months ended |           
|                                                      |                                         |   | March 31,          |           
|                                                      |                                         |   |                    |           
|                                                      |                                         |   | 2003               |            |  | 2002 |      
|                                                      |                                         |   |                    |            |  |      |      
|Net income available to common
Stockholders  Basic   |                                         | $ | 5,780              |            |  | $    | 5,800 |           
|Minority interest                                     |                                         |   | 613                |            |  |      | 651   |           
|                                                      |                                         |   |                    |            |  |     
|Net income available to common
Stockholders  Diluted |                                         | $ | 6,393              |            |  | $    | 6,451 |           
|                                                      |                                         |   |                    |            |  |     
|Weighted average shares:                              |                                         |   |                    |            |  |      |       |           
|                                                      | Basic                                   |   |                    | 27,732,118 |  |      |       | 27,006,349 | 
|                                                      | Stock options                           |   |                    |           |  |      |       | 465,442    | 
|                                                      | Convertible Operating Partnership
Units |   |                    | 3,012,024  |  |      |       | 3,068,463  | 
|                                                      |                                         |   |                    |            |  |     
|                                                      | Diluted                                 |   |                    | 30,744,142 |  |      |       | 30,540,254 | 
|                                                      |                                         |   |                    |            |  |     
|Basic earnings per share                              |                                         | $ | 0.21               |            |  | $    | 0.21  |           
|Diluted earnings per share                            |                                         | $ | 0.21               |            |  | $    | 0.21  |           

The preferred stock has been excluded from the calculation of diluted earnings
per share as it is anti-dilutive in all periods presented. Options to purchase
3,187,743 shares of the Companys common stock were not included in the
computation of diluted earnings per share for the three months ended March 31,
2003 as they are anti-dilutive. The unvested restricted stock has been excluded
from the calculation of diluted earnings per share for the three months ended
March 31, 2003 as it is anti-dilutive. Options to purchase 3,055,012 shares of
the Companys common stock for the three months ended March 31, 2002 were not
included in the computation of diluted earnings per share because their
exercise prices were greater than the average market price of the Companys
common stock of $20.70 per share.

Note 12. SEGMENT INFORMATION

During the three months ended March 31, 2003 and 2002, the Company owned a
portfolio of properties comprised primarily of two product types: office and
industrial. Each of these product types represents a reportable segment with
distinct uses and tenant types that require the Company to employ different
management strategies. Each segment contains properties located in various
regions and markets within the United States. The office portfolio consists
primarily of suburban office buildings. The industrial portfolio consists of
properties designed for warehouse, distribution and light manufacturing for
single-tenant or multi-tenant use.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company evaluates performance
of its property types based on net operating income derived by subtracting
rental expenses and real estate taxes (operating expenses) from rental
revenues. Significant information used by the Company for its reportable
segments (excluding discontinued operations) as of and for the three months
ended March 31, 2003 and 2002 is as follows (in thousands):

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

|                            |  |        |         |  |                      |   |         |       |  |   |           | 
|--------------------------- |  | ------ | ------- |  | -------------------- | - | ------- | ----- |  | - | --------- | 
|                            |  | Office |         |  | Industrial and other |   |         | Total | 
|                            |  |        |         |  |                      |   |         |       | 
|2003                        |  |        |         |  |                      |   |         |       |  |   |           | 
|Rental revenue              |  | $      | 39,798  |  |                      | $ | 7,042   |       |  | $ | 46,840    | 
|Property operating expenses |  |        | 15,419  |  |                      |   | 2,029   |       |  |   | 17,448    | 
|                            |  |        |         |  |                      |   |         |       | 
|Net operating income (NOI)  |  | $      | 24,379  |  |                      | $ | 5,013   |       |  | $ | 29,392    | 
|                            |  |        |         |  |                      |   |         |       | 
|Rental properties, net      |  | $      | 994,067 |  |                      | $ | 216,155 |       |  | $ | 1,210,222 | 
|                            |  |        |         |  |                      |   |         |       | 
|2002                        |  |        |         |  |                      |   |         |       |  |   |           | 
|Rental revenue              |  | $      | 33,136  |  |                      | $ | 7,247   |       |  | $ | 40,383    | 
|Property operating expenses |  |        | 11,631  |  |                      |   | 1,806   |       |  |   | 13,437    | 
|                            |  |        |         |  |                      |   |         |       | 
|Net operating income (NOI)  |  | $      | 21,505  |  |                      | $ | 5,441   |       |  | $ | 26,946    | 
|                            |  |        |         |  |                      |   |         |       | 
|Rental properties, net      |  | $      | 899,878 |  |                      | $ | 335,684 |       |  | $ | 1,235,562 | 
|                            |  |        |         |  |                      |   |         |       | 

The following is a reconciliation of segment revenues and income to
consolidated revenues and income for the periods presented above (in
thousands):

|                                                            |                                                |   |        |         |   |      |        |         |  
|----------------------------------------------------------- | ---------------------------------------------- | - | ------ | ------- | - | ---- | ------ | ------- | -
|                                                            |                                                |   | 2003   |         |   | 2002 |       
|                                                            |                                                |   |        |         |   |      |       
|Revenues                                                    |                                                |   |        |         |   |      |        |        
|Total revenue for reportable segments                       |                                                | $ | 46,840 |         |   | $    | 40,383 |        
|Other revenue (1)                                           |                                                |   | 1,737  |         |   |      | 3,986  |        
|                                                            |                                                |   |        |         |   |     
|Total consolidated revenues                                 |                                                | $ | 48,577 |         |   | $    | 44,369 |        
|                                                            |                                                |   |        |         |   |     
|Net Income                                                  |                                                |   |        |         |   |      |        |        
|NOI for reportable segments                                 |                                                | $ | 29,392 |         |   | $    | 26,946 |        
|Elimination of internal property management fees            |                                                |   | 1,398  |         |   |      | 1,324  |        
|Unallocated amounts:                                        |                                                |   |        |         |   |      |        |        
|                                                            | Other revenue (1)                              |   |        | 1,737   |   |      |        | 3,986   |  
|                                                            | General and administrative expenses            |   |        | (3,786  | ) |      |        | (3,217  | )
|                                                            | Depreciation and amortization                  |   |        | (13,473 | ) |      |        | (10,631 | )
|                                                            | Interest expense                               |   |        | (9,237  | ) |      |        | (8,174  | )
|                                                            | Provision for impairment of real estate assets |   |        | (2,272  | ) |      |        |        |  
|                                                            |                                                |   |        |         |   |     
|Income before minority interest and discontinued
operations |                                                | $ | 3,759  |         |   | $    | 10,234 |        
|                                                            |                                                |   |        |         |   |     



|(1) |  | Other revenue includes fee income, interest and other income and equity
in earnings of unconsolidated operating joint ventures.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------

Note 13. COMMITMENTS AND CONTINGENCIES

Environmental Matters
The Company follows a policy of monitoring its properties for the presence of
hazardous or toxic substances. The Company is not aware of any environmental
liability with respect to the properties that would have a material adverse
effect on the Companys business, assets or results of operations. There can be
no assurance that such a material environmental liability does not exist. The
existence of any such material environmental liability could have an adverse
effect on the Companys results of operations and cash flow.

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GLENBOROUGH REALTY TRUST INCORPORATED

Notes to Consolidated Financial Statements
March 31, 2003

General Uninsured Losses
The Company, or in certain instances, tenants of the properties, carry
comprehensive liability, fire and extended coverage with respect to the
properties. This coverage has policy specification and insured limits
customarily carried for similar properties. However, certain types of losses
(such as from earthquakes and floods) may be either uninsurable or not
economically insurable. Further, certain of the properties are located in areas
that are subject to earthquake activity and floods. Should a property sustain
damage as a result of an earthquake or flood, the Company may incur losses due
to insurance deductibles, co-payments on insured losses or uninsured losses. In
addition, although the Companys existing policies of insurance covering
property damage do not exclude coverage for acts of terrorism, it is possible
that such an exclusion could be imposed by an insurance carrier either during
the current policy term upon satisfaction of certain notice requirements, or
upon future policy renewal, in which case any losses from acts of terrorism
might be uninsured. Should an uninsured loss occur, the Company could lose some
or all of its capital investment, cash flow and anticipated profits related to
one or more properties.

Litigation
Certain claims and lawsuits have arisen against the Company in its normal
course of business. Based on advise from legal counsel, the Company believes
that such claims and lawsuits will not have a material adverse effect on the
Companys financial position, cash flow or results of operations.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations

Background

Glenborough Realty Trust Incorporated is a self-administered and self-managed
real estate investment trust, or REIT, with a portfolio of 70 primarily office
and industrial properties, including 3 operating joint ventures, as of March
31, 2003. Our portfolio encompasses approximately 13 million square feet in 18
states. We are currently focusing on high-quality multi-tenant office
properties in the following core markets: Southern California, Northern New
Jersey, Washington D.C., Boston, Chicago, Northern California and Denver. We
also participate in several alliances to develop property for both our
portfolio and for sale to third parties.

We were incorporated in the State of Maryland on August 26, 1994 and commenced
operations on January 1, 1996. We elected to qualify as a REIT under the
Internal Revenue Code of 1986, as amended. Our Common Stock and Preferred Stock
are listed on the New York Stock Exchange, or NYSE, under the trading symbols
GLB and GLB Pr A, respectively.

Results of Operations

Comparison of the three months ended March 31, 2003 to the three months ended
March 31, 2002.

Rental Revenue. Rental revenue increased $6,457,000, or 16%, to $46,840,000 for
the three months ended March 31, 2003 from $40,383,000 for the three months
ended March 31, 2002. This change primarily resulted from property
acquisitions, lease termination fees and an increase in straight-line rents.

Fees and Reimbursements from Affiliates. Fees and reimbursements from
affiliates consist primarily of property management and asset management fees
paid to us under property and asset management agreements with the
unconsolidated operating and development joint ventures and the Rancon
Partnerships. This revenue decreased $235,000, or 23%, to $806,000 for the
three months ended March 31, 2003, from $1,041,000 for the three months ended
March 31, 2002, primarily due to a disposition fee received upon the sale of a
Rancon property in 2002 and a decrease in asset management fees received from
the Rancon Partnerships due to the property sale.

Interest and Other Income. Interest and other income decreased $2,079,000, or
72%, to $808,000 for the three months ended March 31, 2003, from $2,887,000 for
the three months ended March 31, 2002. The decrease was primarily due to
interest income earned from the sale of a mezzanine loan related to a
development project in the first quarter of 2002.

Equity in Earnings of Unconsolidated Operating Joint Ventures.Equity in
earnings of unconsolidated operating joint ventures increased $65,000, or 112%,
to $123,000 for the three months ended March 31, 2003, from $58,000 for the
three months ended March 31, 2002, due to a decrease in interest expense at one
joint venture.

Property Operating Expenses. Property operating expenses increased $3,937,000,
or 33%, to $16,050,000 for the three months ended March 31, 2003, from
$12,113,000 for the three months ended March 31, 2002, primarily due to
property acquisitions and increases in property taxes and utility and snow
removal costs in the first quarter of 2003 as compared to the first quarter of
2002.

General and Administrative Expenses. General and administrative expenses
increased $569,000, or 18%, to $3,786,000 for the three months ended March 31,
2003, from $3,217,000 for the three months ended March 31, 2002, primarily due
to an increase in professional services and travel and employee training costs.

Depreciation and Amortization. Depreciation and amortization increased
$2,842,000, or 27%, to $13,473,000 for the three months ended March 31, 2003,
from $10,631,000 for the three months ended March 31, 2002. This increase is
due to property acquisitions and depreciation of capital improvements.

Interest Expense. Interest expense increased $1,063,000, or 13%, to $9,237,000
for the three months ended March 31, 2003, from $8,174,000 for the three months
ended March 31, 2002. This increase is primarily due to an increase in debt as
a result of property acquisitions offset by decreases in variable interest
rates.

Provision for impairment of real estate assets.During the first quarter of
2003, due to decreased leasing activity and lower than anticipated market
rents, we recorded a provision for impairment totaling $2,272,000 to provide
for a decrease in the carrying value of our 10% owned development joint
venture, which owns an 86,100 square foot office property located in San Mateo,
California, to its estimated fair value of zero.

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Discontinued Operations.The results of discontinued operations increased
$6,400,000 to $7,508,000 for the three months ended March 31, 2003, from
$1,108,000 for the three months ended March 31, 2002, primarily as a result of
the gain on sale of $4,450,000 and the recognition of $2,523,000 of prepaid
rent upon the sale of one property, offset by a smaller number of properties
included in discontinued operations in the first quarter of 2003 as compared to
the first quarter of 2002. There were eight properties included in
discontinued operations for the three months ended March 31, 2003 as compared
to seventeen for the same period in 2002.

Liquidity and Capital Resources

Cash Flows

For the three months ended March 31, 2003, cash provided by operating
activities was $20,967,000 as compared to $23,220,000 for the same period in
2002. The decrease is primarily due to a decrease in occupancy rates and an
increase in property taxes and utility and snow removal costs. Cash used for
investing activities was $4,981,000 for the three months ended March 31, 2003,
as compared to $59,512,000 for the same period in 2002. The change is primarily
due to an increase in cash provided by real estate sales offset by an increase
in cash used for real estate acquisitions. Cash used for financing activities
was $11,202,000 for the three months ended March 31, 2003, as compared to
$38,363,000 of cash provided by financing activities for the same period in
2002. The change was primarily due to an increase in cash used for the
repayment of debt offset by an increase in proceeds from new debt.

We expect to meet our short-term liquidity requirements generally through our
working capital, our Credit Facility (as defined below) and cash generated by
operations. We believe that cash generated by our operations will be adequate
to meet our operating requirements and to make distributions in accordance with
REIT requirements in both the short and the long-term. In addition to cash
generated by operations, the Credit Facility provides for working capital
advances. However, there can be no assurance that our results of operations
will not fluctuate in the future and at times affect our ability to meet our
operating requirements and the amount of our distributions. If significant
decreases in occupancy or rental rates occurred at our properties, this could
have an adverse impact on our operating cash flows. Similarly, increases in
interest rates could have an adverse impact on our operating cash flows.

Our principal sources of funding for acquisitions, development, expansion and
renovation of properties and stock repurchases include the unsecured Credit
Facility, permanent secured debt financing, public and private equity and debt
issuances, the issuance of partnership units in the Operating Partnership,
proceeds from property sales and cash flow provided by operations.

Investments in Land and Development

We are independently developing approximately 96,000 square feet of commercial
property, which is substantially completed and currently in the stabilization
phase, in New Jersey. As of March 31, 2003, we had invested approximately $13.3
million in this project. Additionally, we have approximately 88 acres of land
with a book value of approximately $20.4 million as of March 31, 2003. This
land has potential for future development of approximately 1,175,000 square
feet of office space. We are obligated to fund approximately $820,000 towards
these developments in 2003. The loans secured by certain of these development
properties contain recourse provisions to us in the aggregate amount of $14.8
million; however, some of the loans were not fully drawn as of March 31, 2003.

We are currently involved in a number of alliances organized in limited
liability companies and stock corporations which could ultimately result in the
development of approximately 938,000 square feet of commercial and mixed-use
properties in California and Colorado. These projects are currently in three
different phases of development: approximately 425,000 square feet is
substantially completed and in the stabilization phase, 63,000 square feet is
in the predevelopment phase and 450,000 square feet is in the entitlement
phase. The alliances grant us certain rights to purchase the properties upon
completion of development. As of March 31, 2003, we had an investment basis of
approximately $41.7 million in these alliances. In addition,
we have acquired properties from them aggregating approximately $119.8 million
since 1999. In the first quarter of 2003, due to decreased leasing activity and
lower than anticipated market rents, we recorded a provision for impairment
totaling $2,272,000 to provide for a decrease in the carrying value of our 10%
owned development joint venture, which owns an 86,100 square foot office
property located in San Mateo, California, to its estimated fair value of zero.
We have no further contractual obligations for the future funding of these
developments; however, we will likely be funding a portion of their working
capital needs until such time as other financing is obtained. Under these
alliances, we have provided an aggregate of $48.7 million in debt guarantees;
however, some of the loans were not fully drawn as of March 31, 2003. These
guarantees will remain in place until such time as the related development
financing has been replaced or repaid, the terms of which vary from under 1
year to up to 2 years. We would be required to perform under these guarantees
in the event that the proceeds generated by the sale, refinance or additional
capital contribution by partners of the development project were insufficient
to repay the full amount of

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the related debt financing. There is currently no
recorded liability for any amounts that may become payable under these
guarantees, nor is there a liability for our obligation to stand-ready to
fund such guarantees. In the event that we must make payments under one of
these guarantees, our only recourse is to the Limited Liability Companies that
own the properties. No estimate of the amount that could be recovered by us in
such an event can be made at this time.

Investments in Unconsolidated Operating Joint Ventures

Investments in unconsolidated operating joint ventures increased from
$7,822,000 at December 31, 2002, to $7,936,000 at March 31, 2003. This increase
was due to our equity interests in the joint ventures earnings during the
first three months of 2003.

Mortgage Loans Receivable

Mortgage loans receivable increased from $41,813,000 at December 31, 2002, to
$42,548,000 at March 31, 2003. This increase was due to accrued interest on a
loan made by us under a development alliance.

Secured and Unsecured Financing

Mortgage loans payable increased from $658,713,000 at December 31, 2002, to
$687,482,000 at March 31, 2003. This increase resulted from $67,500,000 in new
mortgage loans (discussed below) and $85,000 of draws on construction loans,
offset by loan payoffs of $37,201,000 due to debt maturities and $1,615,000 of
scheduled principal payments on other debt.

In the first quarter of 2003, in order to finance the acquisition of 1525
Wilson Boulevard, we obtained a $50 million loan. The loan has a maturity date
of January 31, 2006 and bears interest at the floating rate of 30-day LIBOR
plus 2.25%. The interest rate on this loan at March 31, 2003, was 3.55%.

In the first quarter of 2003, we closed a $17.5 million loan which is secured
by an 144,000 square foot office property located in Alexandria, Virginia. The
loan has a maturity date of March 1, 2008 and bears interest at a fixed rate of
5%.

In the first quarter of 2003, approximately $37.2 million of our mortgage loans
were paid off on the maturity dates.

In the fourth quarter of 2001, we closed a $52.5 million secured loan with an
insurance company (Secured Financing). The Secured Financing bears interest
at a floating rate of 30-day LIBOR plus 3.25% with an absolute floor of 5% (5%
at March 31, 2003 and December 31, 2002) and has an initial maturity of
December 11, 2004, with two one-year extension options. In connection with the
Secured Financing, we entered into an interest rate cap agreement (caplets) to
hedge increases in 30-day LIBOR rates above a specified level. The agreement
expires over a term concurrent with the Secured Financing, is indexed to a
30-day LIBOR rate, is for a notional amount equal to the maximum amount
available on the Secured Financing, and caps 30-day LIBOR at a maximum of 6%.
As of March 31, 2003 and December 31, 2002, the 30-day LIBOR rate was 1.3% and
1.38%, respectively. We paid a $594,000 fee at the inception of the cap
agreement. Related to the sale of two properties in 2002, approximately $8.5
million of this loan was paid off and a related portion of the caplets was
cancelled. Accordingly, approximately $97,000 of the caplet fee was charged to
earnings. The remaining $497,000 fee is being charged to earnings as the
caplets expire.

Outstanding borrowings under the Credit Facility decreased from $76,204,000 at
December 31, 2002, to $56,796,000 at March 31, 2003. The decrease was due to
pay downs totaling $45,392,000 generated from the sales of properties, proceeds
of a new
mortgage loan and cash flow from operations, offset by draws totaling
$25,984,000 for the acquisition of properties, stock repurchases and
development advances. The Credit Facility requires us, among other things, to
be in compliance with certain financial covenants and ratios. We have been in
compliance during the first three months of 2003 and remain in compliance at
March 31, 2003.

Some of our properties are held in limited partnerships and limited liability
companies in order to facilitate financing. All such entities are owned 100%
directly or indirectly by us.

At March 31, 2003, our total indebtedness included fixed-rate debt of
$480,712,000 and floating-rate debt of $263,566,000. Our ratio of total debt to
gross book assets was approximately 46% at March 31, 2003.

It is our policy to manage our exposure to fluctuations in market interest
rates through the use of fixed rate debt instruments to the extent possible. At
March 31, 2003, approximately 35% of our outstanding debt, including amounts
borrowed under the Credit Facility, was subject to variable rates. We may, from
time to time, enter into interest rate protection agreements intended to hedge
the cost of new borrowings. It is not our policy to engage in hedging
activities for speculative purposes. At March 31,

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2003, we were not a party to
any open interest rate protection agreements other than the interest rate cap
contract entered into in December 2001 as discussed above.

Equity and Debt Offerings

In November 1997, we filed a shelf registration statement with the SEC (the
1997 Registration Statement) which registered the issuance of up to $1.0
billion of our equity securities. The 1997 Registration Statement was declared
effective on December 18, 1997. There is currently $801.2 million of capacity
in equity securities remaining on the 1997 Registration Statement. In January
1999, we filed a shelf registration statement with the SEC (the 1999
Registration Statement) which registered the issuance of up to $300 million of
debt securities of Glenborough Properties, L.P, which may be guaranteed by us.
The 1999 Registration Statement was declared effective by the SEC on January
25, 1999. There is currently $300 million of capacity of debt securities
remaining on the 1999 Registration Statement. We currently have no plans to
issue equity or debt securities in the near term under these registration
statements.

Stock Repurchases
In 1999, our Board of Directors authorized the repurchase of up to 6.2 million
shares of our outstanding Common Stock. This represented approximately 20% of
our total outstanding Common Stock. In connection with the sale of 36
multifamily properties in December 2000, the repurchase authorization was
increased to approximately 8.2 million shares, representing approximately 26%
of Common Stock outstanding when the repurchase program began. As of March 31,
2003, 6,318,016 common shares have been repurchased for a total cost of
approximately $104,831,000; this represents approximately 77% of the expanded
repurchase authorization and approximately 20% of Common Stock outstanding when
the repurchase program began. In addition, during 1999, we announced that our
Board of Directors had approved the repurchase of up to 15% of our Preferred
Stock, or 1,725,000 shares. In May 2000, the Preferred Stock repurchase
authorization was increased to 3,450,000 shares, representing approximately 30%
of Preferred Stock outstanding when the repurchase program began. As of March
31, 2003, 1,407,200 preferred shares have been repurchased for a total cost of
approximately $21,076,000; this represents approximately 41% of the expanded
repurchase authorization and approximately 12% of Preferred Stock outstanding
when the repurchase program began. Future stock repurchases will be made from
time to time in the open market or otherwise and the timing will depend on
market conditions and other factors.

Critical Accounting Policies

Revenue recognized on a straight-line basis

We recognize rental revenue on a straight-line basis at amounts that we believe
we will collect on a tenant by tenant basis. The estimation process may result
in higher or lower levels from period to period as our collection experience
and the credit quality of our tenants changes. Actual amounts collected could
be lower or higher than the amounts recognized on a straight-line basis if
specific tenants are unable to pay rent that we have previously recognized as
revenue, or if other tenants remain whom we previously believed would not.

Carrying value of rental properties, investments in development and other
investment assets

Our rental properties, investments in development and other investment assets
such as operating joint ventures and mortgage loans receivable are generally
carried at the lower of cost or estimated fair value. Certain development and
operating joint ventures include our share of undistributed income or loss
arising from the investment, and the mortgage loans receivable include accrued
interest. In addition, under our long-term development program, some interest,
payroll and general and administrative costs incurred in connection with this
program may be capitalized. The actual value of our portfolio of property,
investments in development and other investments could be significantly higher
or lower than their carrying amounts.

Our status as a real estate investment trust (REIT)

We have elected to be taxed as a real estate investment trust under Sections
856 to 860 of the Internal Revenue Code of 1986, as amended (the Code). A
real estate investment trust is generally not subject to federal income tax on
that portion of its real estate investment trust taxable income (Taxable
Income) that is distributed to its stockholders, provided that at least 90% of
Taxable Income is distributed and other requirements are met. We believe that
we have complied with all requirements to qualify as a REIT for the three
months ended March 31, 2003 and 2002. Accordingly, no provision for income
taxes is included in our consolidated financial statements.

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New Accounting Pronouncements

In November 2002, the FASB approved for issuance FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on
the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of FIN 45 were applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. The disclosure requirements are
effective for financial statements of interim and annual periods ending after
December 15, 2002.

In January 2003, the FASB approved for issuance FASB Interpretation No. 46 (FIN
46), Consolidation of Variable Interest Entities. FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date.
It applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. FIN 46 may be applied
prospectively with a cumulative-effect adjustment as of the date on which it is
first applied or by restating previously issued financial statements for one or
more years with a cumulative-effect adjustment as of the beginning of the first
year restated. The disclosure requirements of FIN 46 are effective for all
financial statements initially issued after January 31, 2003. It is possible
that certain of the entities through which and with which we conduct business,
including those described in Notes 5 and 7 in Item 1 will be deemed to be
Variable Interest Entities under the provisions of FIN 46. The total assets and
liabilities of such entities were approximately $262 million and $195 million
at March 31, 2003. Our maximum exposure to loss would be equal to our
investments in these arrangements, plus the related debt guarantees, as
described in Note 5 in Item 1. The disclosures provided reflect our
understanding and analysis of FIN 46 based upon information currently
available. The evaluation of our various arrangements is ongoing and is subject
to change in the event additional interpretive guidance is provided by the
Financial Accounting Standards Board or others.

Inflation

Leases at the office properties typically provide for rent adjustment and
pass-through of certain operating expenses during the term of the lease.
Substantially all of the leases at the industrial properties provide for
pass-through to tenants of certain operating costs, including real estate
taxes, common area maintenance expenses, and insurance. All of these provisions
may permit us to increase rental rates or other charges to tenants in response
to rising prices and therefore, serve to reduce our exposure to the adverse
effects of inflation.

Funds from Operations

Funds from Operations, or FFO, as defined by NAREIT, represents net income
(loss) (including income and loss from discontinued operations) before minority
interest and extraordinary items, adjusted for real estate related depreciation
and amortization and gains (losses) from the disposal of properties. We believe
that FFO is a widely used measure of the operating performance of equity REITs
which provides a relevant basis for comparison among other REITs. Together with
net income and cash flows, FFO provides investors with an additional basis to
evaluate the ability of a REIT to incur and service debt, to pay distributions,
and to fund acquisitions, developments and other capital expenditures. FFO does
not represent net income or cash flows from operations as defined by GAAP, and
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indicator of our operating performance or as an
alternative to cash flows from operating, investing and financing activities
(determined in accordance with GAAP) as a measure of liquidity. FFO does not
necessarily indicate that cash flows will be sufficient to fund all of our cash
needs including principal amortization, capital improvements and distributions
to stockholders. Further, FFO as disclosed by other REITs may not be comparable
to our calculation of FFO. We calculate FFO in accordance with the White Paper
on FFO approved by the Board of Governors of NAREIT in October 1999, as
amended.

Adjusted Funds from Operations, or AFFO, represents net income (loss)
(including income and loss from discontinued operations) before minority
interests and extraordinary items, adjusted for depreciation and amortization
including amortization of deferred financing costs and gains (losses) from the
disposal of properties, less lease commissions and recurring capital
expenditures, consisting of tenant improvements and normal expenditures
intended to extend the useful life of the property such as roof and parking lot
repairs, and less FASB 13 and FASB 141 rents. We believe that AFFO is a measure
of the operating performance of equity REITs which, together with FFO, net
income, and cash flows, provides investors with an additional basis to evaluate
the ability of a REIT to incur and service debt, to pay distributions, and to
fund acquisitions, developments and

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other capital expenditures. AFFO should not
be considered an alternative to net income (computed in accordance with GAAP)
as a measure of our operating performance or as an alternative to cash flow
from operating activities (computed in accordance with GAAP) as a measure of
our liquidity, nor is it necessarily indicative of sufficient cash flow to fund
all of our cash needs. Further, AFFO as disclosed by other REITs may not be
comparable to our calculation of AFFO.

The following table sets forth our calculation of FFO and AFFO for the three
months ended March 31, 2003 and 2002 (in thousands, except weighted average
shares and per share amounts):

|                                                                         |  |           |            |   |           |   |            |  
|------------------------------------------------------------------------ |  | --------- | ---------- | - | --------- | - | ---------- | -
|                                                                         |  | March 31, |            |   | March 31, |  
|                                                                         |  | 2003      |            |   | 2002      |  
|                                                                         |  |           |            |   |           |  
|Income before minority interest and discontinued operations              |  | $         | 3,759      |   |           | $ | 10,234     |  
|Preferred dividends                                                      |  |           | (4,891     | ) |           |   | (4,891     | )
|Depreciation and amortization (1)                                        |  |           | 13,129     |   |           |   | 10,311     |  
|Provision for impairment of real estate assets                           |  |           | 2,272      |   |           |   |           |  
|Income from discontinued operations                                      |  |           | 7,508      |   |           |   | 1,108      |  
|Deduct gain on sale from discontinued operations                         |  |           | (4,450     | ) |           |   |           |  
|Depreciation and amortization from discontinued operations               |  |           | 820        |   |           |   | 1,766      |  
|Adjustment to reflect FFO of Unconsolidated Operating Joint Ventures (2) |  |           | 116        |   |           |   | 102        |  
|                                                                         |  |           |            |   |           |  
|FFO                                                                      |  | $         | 18,263     |   |           | $ | 18,630     |  
|                                                                         |  |           |            |   |           |  
|Amortization of deferred financing fees                                  |  |           | 803        |   |           |   | 484        |  
|Adjustment for FASB 13 rents (3)                                         |  |           | (1,590     | ) |           |   | (772       | )
|Adjustment for FASB 141 (4)                                              |  |           | (329       | ) |           |   |           |  
|Capital reserve                                                          |  |           | (5,877     | ) |           |   | (4,392     | )
|                                                                         |  |           |            |   |           |  
|AFFO                                                                     |  | $         | 11,270     |   |           | $ | 13,950     |  
|                                                                         |  |           |            |   |           |  
|Distributions per share (5)                                              |  | $         | 0.43       |   |           | $ | 0.43       |  
|                                                                         |  |           |            |   |           |  
|Diluted weighted average shares outstanding                              |  |           | 30,744,142 |   |           |   | 30,540,254 |  
|                                                                         |  |           |            |   |           |  



|(1) |  | Excludes non-real estate depreciation and amortization.                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Reflects the adjustments to FFO required to reflect the FFO of the
unconsolidated operating joint ventures allocable to us. Our investments
in the joint ventures are accounted for using the equity method of
accounting.
|   
|(3) |  | Amortization of straight-line rent.                                                                                                                                                                                       
|   
|(4) |  | Amortization of above and below market rate leases.                                                                                                                                                                       
|   
|(5) |  | The distributions for the three months ended March 31, 2003, were paid on
April 15, 2003.                                                                                                                                 

Forward Looking Statements; Factors That May Affect Operating Results

This Quarterly Report on Form 10-Q contains forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities and Exchange Act of 1934, including statements regarding our
expectations, hopes, intentions, beliefs and strategies regarding the future.
These forward-looking statements include statements relating to:



| |  | Our belief that certain claims and lawsuits which have arisen against us in our normal course of business will not have a
material adverse effect on our financial position, cash flow or results of operations;                  
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our intention to continue our policy of paying quarterly distributions;                                                                                                                                                           
| 
| |  | Our expectation to meet our short-term liquidity requirements generally through our working capital, our Credit Facility
and cash generated by operations;                                                                        
| 
| |  | Our belief that cash generated by our operations will be adequate to meet our operating requirements and to make
distributions in accordance with REIT requirements in both the short and the long-term;                          
| 
| |  | Our statements regarding potential future development;                                                                                                                                                                            
| 
| |  | Our statements regarding our current involvement in a number of alliances which could ultimately result in the development
of approximately 938,000 square feet of commercial and mixed-use properties in California and Colorado;

27



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##### Table of Contents





| |  | Our expectation to continue our policy of managing our exposure to fluctuations in market interest rates through the use of
fixed rate debt instruments to the extent possible;                                                                     
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Our current intent not to issue securities under our 1997 and 1999 Shelf Registration Statements in the near term;                                                                                                                                  
| 
| |  | Our expectation to make future stock repurchases from time to time in the open market or otherwise depending on market
conditions and other factors;                                                                                                
| 
| |  | Our belief that certain provisions of the leases of our properties may permit us to increase rental rates or other charges
to tenants in response to rising prices and therefore, serve to reduce our exposure to the adverse effects of inflation; 
| 
| |  | Our belief that the changes in market interest rates obtainable on our secured and unsecured borrowings will not have a
material impact on the performance or fair value of our mortgage loan receivable;                                           
| 
| |  | Our statements regarding our entering into forward interest rate, or similar, agreements to hedge specific anticipated debt
issuances where we believe the risk of adverse changes in market rates is significant;                                  
| 
| |  | Our belief that adoption of the standard set forth in SFAS No. 148, Accounting for Stock-Based Compensation  Transition
and Disclosure will not have a material impact on the Companys consolidated financial position or results of operations.

All forward-looking statements included in this document are based on
information available to us on the date hereof. It is important to note that
our actual results could differ materially from those stated or implied in such
forward-looking statements. 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:



| |  | market fluctuations in rental rates and occupancy;                                                                                                                                                          
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | defaults or non-renewal of leases by customers;                                                                                                                                                             
| 
| |  | increased interest rates and operating costs;                                                                                                                                                               
| 
| |  | our failure to obtain necessary outside financing;                                                                                                                                                          
| 
| |  | difficulties in identifying properties to acquire and in effecting acquisitions;                                                                                                                            
| 
| |  | our failure to successfully integrate acquired properties and operations;                                                                                                                                   
| 
| |  | the unpredictability of litigation;                                                                                                                                                                         
| 
| |  | the unpredictability of changes in accounting rules;                                                                                                                                                        
| 
| |  | failure of market conditions to improve in certain geographic areas;                                                                                                                                        
| 
| |  | unanticipated difficulties with joint venture partners; and                                                                                                                                                 
| 
| |  | risks and uncertainties affecting property development and construction (including construction delays, cost overruns, our
inability to obtain necessary permits and public opposition to these activities);

The forward-looking statements in this Quarterly Report on Form 10-Q are
subject to additional risks and uncertainties further discussed under Item 7.
Managements Discussion and Analysis of Financial Condition and Results of
Operation  Risk Factors of our Annual Report on Form 10-K for the year ended
December 31, 2002. We assume no obligation to update any forward
looking-statement or statements.

28



---



##### Table of Contents



Risk Factors

Stockholders or potential stockholders should read the Risk Factors section
of our latest annual report on Form 10-K filed with the Securities and Exchange
Commission (SEC) in conjunction with this quarterly report on Form 10-Q to
better understand the factors affecting our results of operations and our
Common Stock share price. The fact that some of the risk factors may be the
same or similar to our past filings means only that the risks are present in
multiple periods. We believe that many of the risks detailed here and in our
other SEC filings are part of doing business in the real estate industry and
will likely be present in all periods reported. The fact that certain risks are
endemic to the industry does not lessen the significance of the risk.




Item 3. Qualitative and Quantitative Information about Market Risk

Interest Rates

We are exposed to changes in interest rates obtainable on our secured and
unsecured borrowings. We do not believe that changes in market interest rates
will have a material impact on the performance or fair value of our mortgage
loans receivable.

It is our policy to manage our exposure to fluctuations in market interest
rates for our borrowings through the use of fixed rate debt instruments to the
extent that reasonably favorable rates are obtainable with such arrangements.
In order to maximize financial flexibility when selling properties and minimize
potential prepayment penalties on fixed rate loans, we have also entered into
variable rate debt arrangements. Approximately 35% and 37% of our outstanding
debt, including amounts borrowed under the Credit Facility, were subject to
variable rates at March 31, 2003 and December 31, 2002, respectively. In
addition, the average interest rate on our debt decreased from 5.26% at
December 31, 2002 to 5.25% at March 31, 2003. We review interest rate exposure
in the portfolio continually in an effort to minimize the risk of interest rate
fluctuations. We do not have any other material market-sensitive financial
instruments. It is not our policy to engage in hedging activities for
speculative or trading purposes.

We may enter into forward interest rate, or similar, agreements to hedge
specific anticipated debt issuances where we believe the risk of adverse
changes in market rates is significant. Under a forward interest rate
agreement, if the referenced interest rate increases, we are entitled to a
receipt in settlement of the agreement that economically would offset the
higher financing cost of the debt issued. If the referenced interest rate
decreases, we make payment in settlement of the agreement, creating an expense
that economically would offset the reduced financing cost of the debt issued.
At March 31, 2003, we were not a party to any forward interest rate or similar
agreements other than the interest rate cap contract entered into in December
2001 as discussed above.

The table below provides information about our financial instruments that are
sensitive to changes in interest rates. For debt obligations, the table
presents principal cash flows and related weighted average interest rates by
expected maturity dates. Weighted average variable rates are based on rates in
effect at the reporting date.

|                      |  |                        |        |   |      |   |        |      |  |   |        |   |  |      |         |   |            |   |        |       |  |   |            |   |  |   |         |   |  |   |         | 
|--------------------- |  | ---------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------- | - | ---------- | - | ------ | ----- |  | - | ---------- | - |  | - | ------- | - |  | - | ------- | 
|                      |  | Expected Maturity Date |        |   |      |   |        |      |  |   |       
|                      |  |                        |        |   |      |   |        |      |  |   |       
|                      |  | 2003                   |        |   | 2004 |   |        | 2005 |  |   | 2006   |   |  | 2007 |         |   | Thereafter |   |        | Total |  |   | Fair Value |  
|                      |  |                        |        |   |      |   |        |      |  |   |        |   |  |      |         |   |            |   |        |       |  |   |            |  
|                      |  | (in thousands)         |       
|Secured Fixed         |  | $                      | 22,684 |   |      | $ | 9,234  |      |  | $ | 24,889 |   |  | $    | 106,505 |   |            | $ | 30,852 |       |  | $ | 286,548    |   |  | $ | 480,712 |   |  | $ | 480,712 | 
|Average interest rate |  |                        | 7.34   | % |      |   | 6.69   | %    |  |   | 6.99   | % |  |      | 6.79    | % |            |   | 7.07   | %     |  |   | 5.71       | % |  |   | 6.20    | % |  |   |         | 
|Secured Variable      |  | $                      | 28,000 |   |      | $ | 43,975 |      |  | $ | 84,795 |   |  | $    | 50,000  |   |            | $ |       |       |  | $ |           |   |  | $ | 206,770 |   |  | $ | 206,770 | 
|Average interest rate |  |                        | 3.80   | % |      |   | 5.00   | %    |  |   | 3.34   | % |  |      | 3.55    | % |            |   |       |       |  |   |           |   |  |   | 3.81    | % |  |   |         | 
|Unsecured Variable    |  | $                      |       |   |      | $ |       |      |  | $ | 56,796 |   |  | $    |        |   |            | $ |       |       |  | $ |           |   |  | $ | 56,796  |   |  | $ | 56,796  | 
|Average interest rate |  |                        |       |   |      |   |       |      |  |   | 2.83   | % |  |      |        |   |            |   |       |       |  |   |           |   |  |   | 2.83    | % |  |   |         | 

We believe that the interest rates given in the table for fixed rate borrowings
approximate the rates we could currently obtain for instruments of similar
terms and maturities and that the fair values of such instruments approximate
carrying value at March 31, 2003.

29



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##### Table of Contents



A change of 1/8% in the index rate to which our variable rate debt is tied
would change the annual interest we incurred by approximately $329,000, based
upon the balances outstanding on variable rate instruments at March 31, 2003.




Item 4. Controls and Procedures



| | (a) |  | Evaluation of disclosure controls and procedures. Our chief
executive officer and chief financial officer have reviewed our
disclosure controls and procedures (as defined in the Securities
Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a date
within 90 days before the filing date of this quarterly report. We
refer to that date as the Evaluation Date. Our chief executive
officer and chief financial officer have concluded that, as of the
Evaluation Date, our disclosure controls and procedures were
effective and designed to ensure that material information relating
to us and our consolidated subsidiaries would be made known to them
by others within those entities.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Changes in internal controls. Subsequent to the Evaluation
Date there were no significant changes in our internal controls or in
other factors that could significantly affect those controls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             







PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Certain claims and lawsuits have arisen against us in our normal course of
business. We believe that such claims and lawsuits will not have a material
adverse effect on our financial position, cash flow or results of operations.




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

There were no matters submitted to a vote of security holders during the quarter ended March 31, 2003.




Item 6. Exhibits and Reports on Form 8-K

|    |  |                                                                                    
|--- |  | -----------------------------------------------------------------------------------
|(a) |  | Exhibits:                                                                          
|   
|    |  | The Exhibit Index attached hereto is hereby incorporated by
reference to this item.
|    |  |                                                                                    
|(b) |  | Reports on Form 8-K:                                                               
|   
|    |  | No Reports on Form 8-K were filed during the quarter ended March 31,
2003.         

30



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

GLENBOROUGH REALTY TRUST INCORPORATED

|                   |  |  |  |                                            |  |                               
|------------------ |  |  |  | ------------------------------------------ |  | ------------------------------
|                   |  |  |  | By: Glenborough Realty Trust Incorporated,
|                  
|                  
|Date: May 15, 2003 |  |  |  | /s/ Andrew Batinovich                     
|                   |  |  |  |                                            |  | Andrew Batinovich             
|                   |  |  |  |                                            |  | Director, President and       
|                   |  |  |  |                                            |  | Chief Operating Officer       
|                   |  |  |  |                                            |  |                               
|Date: May 15, 2003 |  |  |  | /s/ Stephen Saul                          
|                   |  |  |  |                                            |  | Stephen Saul                  
|                   |  |  |  |                                            |  | Chief Financial Officer       
|                   |  |  |  |                                            |  | (Principal Financial Officer) 
|                   |  |  |  |                                            |  |                               
|Date: May 15, 2003 |  |  |  | /s/ Brian Peay                            
|                   |  |  |  |                                            |  | Brian Peay                    
|                   |  |  |  |                                            |  | Vice President,               
|                   |  |  |  |                                            |  | Finance and Accounting        
|                   |  |  |  |                                            |  | (Principal Accounting Officer)

31



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##### Table of Contents



I, ROBERT BATINOVICH, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of
Glenborough Realty Trust Incorporated;                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors
(or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: May 15, 2003

/s/ Robert Batinovich
Robert Batinovich
Chairman and Chief Executive Officer

32



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##### Table of Contents



I, STEPHEN R. SAUL, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of
Glenborough Realty Trust Incorporated;                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors
(or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: May 15, 2003

/s/ Stephen R. Saul
Stephen R. Saul
Executive Vice President and
Chief Financial Officer

33



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##### Table of Contents








| |  |  | EXHIBIT INDEX
| |  |  | -------------

|            |  |                                                                                                                                                      
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Title                                                                                                                                        
|            |  |                                                                                                                                                      
|10.1        |  | Amended and Restated Employment Agreement dated May 7, 2003, between
Robert Batinovich and Glenborough Realty Trust Incorporated.                    
|            |  |                                                                                                                                                      
|10.2        |  | Amended and Restated Employment Agreement dated May 7, 2003, between
Andrew Batinovich and Glenborough Realty Trust Incorporated.                    
|            |  |                                                                                                                                                      
|10.3        |  | Employment Agreement dated May 7, 2003, between Sandra L. Boyle and
Glenborough Realty Trust Incorporated.                                           
|            |  |                                                                                                                                                      
|10.4        |  | Letter Agreement dated May 7, 2003, between Robert Batinovich and
Glenborough Realty Trust Incorporated, relating to supplemental retirement
benefits
|            |  |                                                                                                                                                      
|10.5        |  | Letter Agreement dated May 7, 2003, between Andrew Batinovich and
Glenborough Realty Trust Incorporated, relating to supplemental retirement
benefits
|            |  |                                                                                                                                                      
|10.6        |  | Letter Agreement dated May 7, 2003, between Sandra L. Boyle and
Glenborough Realty Trust Incorporated, relating to supplemental retirement
benefits  
|            |  |                                                                                                                                                      
|11.1        |  | Statement re: Computation of Earnings Per Share is shown in Note 11 of
the Consolidated Financial Statements of the Company in Item 1.               
|            |  |                                                                                                                                                      
|12.1        |  | Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings
to Fixed Charges and Preferred Dividends.                                    
|            |  |                                                                                                                                                      
|99.1        |  | Section 906 Certification of Robert Batinovich, Chief Executive Officer.                                                                             
|            |  |                                                                                                                                                      
|99.2        |  | Section 906 Certification of Stephen R. Saul, Chief Financial Officer.