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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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FORM 10-K

(Mark One)

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

SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2003

or

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

SECURITIES EXCHANGE ACT OF 1934


For the transition period from

to

Commission File Number: 1-13625

EOP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its
charter)


|                                                                                                          |  |                                     
|--------------------------------------------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                                                                  |  | 36-4156801                          
|(State or other jurisdiction of incorporation
    or organization)                                        |  | (I.R.S. Employer Identification No.)
|                                                                                                         
|Two North Riverside Plaza,
     Suite 2100, Chicago, Illinois(Address of principal executive
    offices) |  | 60606(Zip code)                     

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

Securities registered pursuant to
Section 12(b) of the Act:

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|                    |  |                                          
|None                |  | None                                     

Securities registered pursuant to
Section 12(g) of the Act:

Units of Limited Partnership Interest
(Units)


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 if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of the registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any
amendment to this
Form 10-K.  x

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

The aggregate market value of the Units held by
non-affiliates of the registrant as of June 30, 2003 (the
last business day of the registrants most recently
completed second fiscal quarter) was $855,650,789 based on the
market value on that date of the common shares of Equity Office
Properties Trust into which Units are exchangeable.

On February 27, 2004, 450,162,700 Units
were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Equity Office Properties
Trusts proxy statement for the annual shareholders
meeting to be held in 2004 are incorporated by reference into
Part III. Equity Office Properties Trust expects to file
its proxy statement within 120 days after December 31, 2003.



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EOP OPERATING LIMITED PARTNERSHIP

TABLE OF CONTENTS

|               |  |                                                                                                        |  |      |    | 
|-------------- |  | ------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|               |  |                                                                                                        |  | Page |   
|               |  |                                                                                                        |  |      |   
|PART I.        |  |                                                                                                        |  |     
|               |  | Forward-Looking
    Statements                                                                         |  |      | 3  | 
|Item 1.        |  | Business                                                                                               |  |      | 4  | 
|Item 2.        |  | Properties                                                                                             |  |      | 11 | 
|Item 3.        |  | Legal Proceedings                                                                                      |  |      | 17 | 
|Item 4.        |  | Submission of Matters to a
    Vote of Security Holders                                                |  |      | 17 | 
|PART II.       |  |                                                                                                        |  |     
|Item 5.        |  | Market for Registrants
    Common Equity and Related Stockholder Matters                              |  |      | 18 | 
|Item 6.        |  | Selected Financial Data                                                                                |  |      | 19 | 
|Item 7.        |  | Managements Discussion
    and Analysis of Financial Condition and Results of
    Operations          |  |      | 20 | 
|Item 7A.       |  | Quantitative and Qualitative
    Disclosures About Market Risk                                         |  |      | 49 | 
|Item 8.        |  | Financial Statements and
    Supplementary Data                                                        |  |      | 50 | 
|Item 9.        |  | Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure               |  |      | 97 | 
|Item 9A.       |  | Controls and Procedures                                                                                |  |      | 97 | 
|PART III.      |  |                                                                                                        |  |     
|Item 10.       |  | Directors and Executive
    Officers of the Registrant                                                 |  |      | 98 | 
|Item 11.       |  | Executive Compensation                                                                                 |  |      | 98 | 
|Item 12.       |  | Security Ownership of
    Certain Beneficial Owners and Management and Related
    Stockholder Matters |  |      | 98 | 
|Item 13.       |  | Certain Relationships and
    Related Transactions                                                     |  |      | 98 | 
|Item 14.       |  | Principal Accountant Fees
    and Services                                                             |  |      | 98 | 
|PART IV.       |  |                                                                                                        |  |     
|Item 15.       |  | Exhibits, Financial
    Statement Schedules, and Reports on Form 8-K                                   |  |      | 99 | 
|Subsidiaries  
|Consent       
|Certifications
|Certifications



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PART I

FORWARD-LOOKING STATEMENTS

Statements contained in this Form 10-K which
are not historical fact may be forward-looking statements. Such
statements (none of which is intended as a guarantee of
performance) are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those
projected or anticipated. A number of important factors could
cause actual results to differ materially from those indicated
by the forward-looking statements, including, but not limited
to, the risks described in our current report on Form 8-K
filed with the Securities and Exchange Commission (the
SEC) on July 15, 2003, as the same may be
supplemented from time to time. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date this Form 10-K is filed with the
SEC. Among the factors about which we have made assumptions are
the following:



| |   |                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our ability to maintain occupancy and to timely
    lease or re-lease space at anticipated rents;                                                                                                                                              
|
| |  | changes in general economic conditions,
    including, in particular, those affecting industries in which
    our principal tenants and potential tenants compete and their
    demand for office space in markets in which we have a presence;
|
| |  | the extent of any tenant bankruptcies and
    insolvencies;                                                                                                                                                                                    
|
| |  | the extent of any early lease terminations and
    the amount of lease terminations fees, if any;                                                                                                                                              
|
| |  | the cost and availability of debt and equity
    financing;                                                                                                                                                                                    
|
| |  | the availability of new competitive supply, which
    may become available by way of sublease and new construction;                                                                                                                            
|
| |  | the extent of any disposition activity and our
    ability to complete any such dispositions in a timely manner and
    on acceptable terms;                                                                                                   
|
| |  | our ability to realize anticipated cost savings
    by creating and capturing benefits of scale;                                                                                                                                               
|
| |  | our ability to obtain, at a reasonable cost,
    adequate insurance coverage for catastrophic events, such as
    earthquakes and terrorist acts;                                                                                              
|
| |  | changes in operating costs, including real estate
    taxes, utilities, insurance and security costs; and                                                                                                                                      
|
| |  | other risks and uncertainties detailed from time
    to time in our filings with the SEC.                                                                                                                                                      

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

EOP PARTNERSHIP

As used herein, we, us
and our refer to EOP Operating Limited Partnership,
a Delaware limited partnership, together with its consolidated
subsidiaries, and the predecessors thereof, except where the
context otherwise requires. We are a subsidiary of Equity Office
Properties Trust (Equity Office), a Maryland real
estate investment trust (REIT). We were organized in
1996 and began operations in 1997. We are principally engaged,
through various subsidiaries, in owning, managing, leasing,
acquiring and developing office properties. Equity Offices
assets are owned and substantially all of its operations are
conducted through us and our subsidiaries. Equity Office is our
sole general partner and owned at December 31, 2003, an
approximate 89.1% interest in us. Equity Office has elected to
be taxed as a REIT for federal income tax purposes, and
generally will not be subject to federal income tax if 100% of
its taxable income is distributed and it complies with a number
of organizational and operational requirements.

At December 31, 2003, we had a portfolio of
684 office properties comprising approximately
122.3 million square feet of commercial office space in
18 states and the District of Columbia (the Office
Properties), 75 industrial properties comprising
approximately 5.8 million square feet (the Industrial
Properties and, together with the Office Properties, the
Properties) and approximately 0.4 million
square feet of office properties under development.

Our internet site is http://www.equityoffice.com.
Beginning on or about March 22, 2004, we will provide to the
public on our website, free of charge, our annual report on
Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and other reports and amendments to
those reports filed or furnished pursuant to Section 13 or
15(d) of the Exchange Act as soon as reasonably practicable
after such material is electronically filed with, or furnished
to, the SEC.

KEY TRANSACTIONS IN 2003

During 2003, we completed the following key
transactions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we disposed of 53 office properties, two
    industrial properties and four vacant land parcels in various
    transactions to unaffiliated parties for approximately
    $933.1 million. The sold office properties consisted of
    approximately 5,182,707 square feet and 32 residential
    units, and the industrial properties consisted of approximately
    216,900 square feet. With these transactions, we exited the
    following markets: Salt Lake City, UT; Riverside, CA;
    Fort Worth, TX; Charlotte, NC; and San Antonio, TX;
|
| |  | we sold partial interests in 13 Office Properties
    consisting of approximately 3,284,431 square feet for
    approximately $596.5 million;                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | we acquired two Office Properties for
    approximately $183.2 million consisting of approximately
    829,293 square feet;                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | we placed into service four developments
    consisting of five buildings and approximately
    1,218,215 square feet;                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | we entered into $500 million of
    forward-starting interest rate swaps;                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | we repaid $400 million of unsecured notes
    that matured in November 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | we issued $500 million of unsecured notes
    due January 2013 at an effective annual interest rate of 5.98%
    and used a portion of the net proceeds to repay
    $300 million of unsecured notes that matured in February
    2003;                                                                                                                                                                                                                                                                                                           
|
| |  | we obtained a new three-year $1.0 billion
    revolving credit facility in May 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | we obtained a $1.0 billion 364-day credit
    facility in December 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Equity Office announced the redemption of, and
    subsequently redeemed in 2004, 4,562,900 outstanding 8 5/8%
    Series C Cumulative Redeemable Preferred Shares of
    Beneficial Interest for approximately $114.6 million, which
    included approximately $0.6 million of accrued
    distributions. In connection with such redemption, we redeemed
    all of the Series C Preferred Units from Equity Office;
|
| |  | Equity Office redeemed the 7.875% Series E
    Cumulative Redeemable Preferred Shares for approximately
    $151.9 million, which included approximately
    $1.9 million of accrued distributions. In connection with
    such redemption, we redeemed all of the Series E Preferred
    Units from Equity Office;                                                                                                    
|
| |  | Equity Office redeemed the 8.00% Series F
    Cumulative Redeemable Preferred Shares for approximately
    $100.0 million. In connection with such redemption, we
    redeemed all of the Series F Preferred Units from Equity
    Office; and                                                                                                                                                                         
|
| |  | Equity Office repurchased 14,236,400 Common
    Shares at an average price of $25.53 per share for a total
    of $363.5 million. In connection with the repurchases, we
    purchased from Equity Office and retired a corresponding number
    of Units for an aggregate purchase price equal to the aggregate
    purchase price for all Common Share repurchases.                                                  

BUSINESS STRATEGY

Our primary business objective is to achieve
sustainable long-term growth in cash flow and portfolio value in
order to maximize unitholder value. We intend to achieve this
objective by owning and operating high-quality office buildings
and providing a superior level of service to customers across
the United States.

Our business strategy involves:



| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increasing occupancy by leasing up vacant space
    on economically attractive terms, retaining tenants, reducing
    lease cycle time and improving customer service;                                           
|
| |  | concentrating our capital in 15 to 20 core
    markets with the best prospects for employment growth and where
    we believe we can best position ourselves to outperform our
    competition;                  
|
| |  | taking advantage of favorable market
    opportunities to exit non-core markets and selectively disposing
    of properties in certain of our core markets that do not fit
    within our long-term strategy; and
|
| |  | achieving economies of scale over time, including
    anticipated cost savings from the implementation of our new
    operating model.                                                                           

New Operating Model

In 2001, we initiated a comprehensive analysis of
our operating structure with the help of a management consulting
firm and our employees. The goal of the analysis was to
streamline operations, improve customer service, reduce lease
cycle time, increase occupancy, retain tenants and reduce
operating expenses. The analysis resulted in a significant
reengineering effort called EOPlus. As part of this effort, many
of the activities that occurred at the property level have been
centralized into regional offices with a view towards allowing
property managers to spend more time building customer
relationships. The centralization of each regions
operations is designed to provide higher service to our
customers at a lower cost. By consolidating our property
management offices, we made available for leasing almost 400,000
square feet of office space in 2003. As of December 31,
2003, we have approximately 15% fewer employees at the property
level than at the end of 2001. We have also created a central
purchasing function to review and analyze our goods and services
expenditures. The goal of the central purchasing function is to
obtain preferred pricing, reduce the number of our vendors and
reduce the number of invoices we process.

ACQUISITION AND DISPOSITION ACTIVITY

Over the past five years, we have invested
approximately $12.9 billion, calculated on a cost basis,
and have disposed of approximately $3.7 billion, calculated
based on the sales price, of institutional quality office

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properties, industrial properties, parking
facilities and vacant land parcels throughout the United States.
In the past two years we have taken advantage of the favorable
market conditions for property sales and we have been a net
seller of real estate.


|     |  |                       |         |  |              |   |         | 
|---- |  | --------------------- | ------- |  | ------------ | - | ------- | 
|Year |  | Acquisitions          |         |  | Dispositions |  
|     |  |                       |         |  |              |  
|     |  |                      
|     |  | (Dollars in millions) |        
|2003 |  | $                     | 197.2   |  |              | $ | 1,529.6 | 
|2002 |  | $                     | 172.8   |  |              | $ | 508.3   | 
|2001 |  | $                     | 7,237.7 |  |              | $ | 541.2   | 
|2000 |  | $                     | 4,942.2 |  |              | $ | 536.0   | 
|1999 |  | $                     | 393.2   |  |              | $ | 631.9   | 

Management considers various factors when
evaluating potential property acquisitions. These factors
include but are not limited to:



| |   |                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the attractiveness of the property to existing
    and potential tenants;                                                                                                                                   
|
| |  | the likelihood and relative attractiveness of
    competitive supply;                                                                                                                                       
|
| |  | the anticipated demand for space in the local
    market;                                                                                                                                                   
|
| |  | the creditworthiness and diversity of risk in the
    tenants occupying the property;                                                                                                                       
|
| |  | the ability to acquire the asset at an attractive
    going-in yield, as well as the potential to increase operating
    income over time by renewing leases for higher rents;                              
|
| |  | the physical condition of the property, including
    the extent of funds required for its maintenance and for
    physical upgrades needed in order to establish or sustain its
    market competitiveness;
|
| |  | the ability to operate the property with a
    competitive cost structure; and                                                                                                                              
|
| |  | the propertys location in one of our core
    markets.                                                                                                                                                     

As part of our business strategy, assuming that
capital and acquisition opportunities are available to us on
reasonable terms, we intend to continue to acquire additional
office properties in our core markets. Properties may be
acquired separately or as part of a portfolio and may be
acquired for cash and/or in exchange for our debt or equity
securities. These acquisitions may be individual asset
transactions, joint ventures, mergers or other business
combinations.

Management considers various factors when
evaluating potential property dispositions. These factors
include but are not limited to:



| |   |                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------
| |  | the ability to sell the property at a price we
    believe would provide an attractive return to our unitholders;
|
| |  | our ability to recycle capital into core markets
    consistent with our business strategy;                      
|
| |  | our desire to exit markets that are not core
    markets;                                                        
|
| |  | whether the property is strategically located;                                                                   
|
| |  | tenant composition and lease rollover for the
    property;                                                      
|
| |  | general economic conditions and outlook,
    including job growth in the local market; and                       
|
| |  | the general quality of the asset.                                                                                

DEVELOPMENT ACTIVITY

At December 31, 2003, approximately
0.4 million square feet of projects were under development.
Our policy is to prudently pursue projects where customer need
is evident and market conditions warrant. In addition to our
current development pipeline, we own various undeveloped land
parcels on which

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approximately 12 million square feet of
office space could be developed, assuming our receipt of
necessary permits, licenses and approvals. Our policy is to
develop land only when market conditions warrant. Although we
may develop some properties ourselves, a portion of this
activity may also be conducted with joint venture partners. If
we develop a property with a joint venture partner, we may not
have the same degree of control over the property as if we owned
it ourselves. In addition, if we develop a property with a joint
venture partner, we will be required to share a portion of the
economic benefits from such property with our joint venture
partner.


In determining whether to enter into a new
development, the foregoing acquisition factors are considered as
well as the additional risks of development, including the
following:



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

FINANCING POLICIES

Equity Office conducts substantially all of its
investment and debt-financing activities through us. To date, we
have financed our investments through a combination of equity,
which may be issued by either Equity Office or us, as well as
secured and unsecured debt (which would be issued by us). The
terms of our lines of credit and unsecured notes contain various
financial covenants which require satisfaction of certain total
debt-to-asset ratios, secured debt-to-total-asset ratios, debt
service coverage ratios, and unsecured debt-to-unencumbered
asset ratios, as well as other limitations. In addition, we have
obtained investment grade credit ratings on our unsecured debt
from each of Standard & Poors, Fitch and Moodys rating
agencies. A primary objective of our financing policy is to
manage our financial position to allow us to raise capital at
competitive rates. As of December 31, 2003, approximately
96.8% of our outstanding debt had a fixed interest rate, which
limits the risk of fluctuating interest rates.

In addition, we utilize certain derivative
financial instruments at times to limit interest rate risk. The
derivatives we enter into, and the only derivative transactions
approved by Equity Offices Board of Trustees, are those
which are used only for hedging purposes rather than
speculation. If an anticipated hedged transaction does not
occur, any positive or negative value of the derivative will be
recognized immediately in net income.

To the extent that Equity Offices Board of
Trustees decides to obtain additional capital, Equity Office may
elect to issue equity securities, cause us to issue additional
Units or debt securities, retain our earnings (subject to the
provisions of the Internal Revenue Code requiring distributions
of taxable income to maintain REIT status), or dispose of some
of our properties or utilize a combination of these methods.
Under the terms of our partnership agreement, the proceeds of
all equity capital raised by Equity Office must be contributed
to us in exchange for additional interests in us.

DIVIDEND POLICY

In order to qualify as a REIT for federal income
tax purposes, Equity Office must distribute at least 90% of its
taxable income (excluding capital gains) to its shareholders.
Equity Office currently distributes capital gains to its
shareholders, however, these gains may be retained by Equity
Office and taxed at the corporate tax rate. Our partnership
agreement generally requires us to distribute substantially all
of the net cash from operations each quarter and to make
reasonable efforts to distribute to Equity Office enough cash
for it to meet the 90% distribution requirement. Accordingly, we
currently intend, although we are not legally obligated, to
continue to make regular quarterly distributions to holders of
Units and preferred units. The declaration of dividends on
common and preferred shares is at the discretion of Equity
Offices Board of Trustees, which decision is made from
time to time by Equity Offices Board of Trustees based on
then prevailing circumstances.

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INDUSTRY SEGMENTS

Our primary business is the ownership and
operation of office properties. Our long-term tenants are in a
variety of businesses, and no single tenant is significant to
our business. Information related to this segment for the years
ended December 31, 2003, 2002 and 2001 is set forth in
Item 8. Financial Statements and Supplementary Data 
Note 20  Segment Information.

COMPETITION

The leasing of real estate is highly competitive.
We compete for tenants in our markets primarily on the basis of
property location, rent charged, services provided and the
design and condition of improvements. We also experience
competition when attempting to acquire or divest ownership of
real estate, building sites or redevelopment opportunities,
including competition from domestic and foreign financial
institutions, other real estate companies, life insurance
companies, pension trusts, trust funds, partnerships and
individual investors.

ENVIRONMENTAL EXPOSURE

As an owner of real estate, we are subject to
various environmental laws of federal, state and local
governments. Compliance with existing laws has not had a
material adverse effect on our financial condition and results
of operations, and management does not believe it will have such
an impact in the future. However, we cannot predict the impact
of unforeseen environmental contingencies or new or changed laws
or regulations on our Properties, properties that we have sold
or on properties that may be acquired in the future.

EMPLOYEES

As of December 31, 2003, Equity Office had
approximately 2,400 employees that provide real estate
operations, leasing, legal, financial and accounting,
acquisition, disposition and marketing expertise throughout the
country.

The seven executive officers of Equity Office
have an average tenure of six years with Equity Office or its
affiliates or predecessors and an average of 18 years experience
in the real estate industry.

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EXECUTIVE AND SENIOR OFFICERS OF EQUITY
OFFICE

As of March 15, 2004, the following
executive and senior officers of Equity Office held the offices
indicated:

|                        |  |     |    |  |              |                                                                                        
|----------------------- |  | --- | -- |  | ------------ | ---------------------------------------------------------------------------------------
|Name                    |  | Age |    |  | Offices Held
|                        |  |     |    |  |             
|Richard D. Kincaid      |  |     | 42 |  |              | President and Chief Executive Officer                                                  
|Jeffrey L. Johnson      |  |     | 44 |  |              | Executive Vice President and Chief Investment
    Officer                              
|Lawrence J. Krema       |  |     | 43 |  |              | Executive Vice President  Human
    Resources and Communications                      
|Peyton H. Owen, Jr.     |  |     | 46 |  |              | Executive Vice President and Chief Operating
    Officer                               
|Stanley M. Stevens      |  |     | 55 |  |              | Executive Vice President, Chief Legal Counsel and
    Secretary                        
|Marsha C. Williams      |  |     | 52 |  |              | Executive Vice President and Chief Financial
    Officer                               
|Robert J. Winter, Jr.   |  |     | 58 |  |              | Executive Vice President  Development
    and Portfolio Management                    
|Thomas Q. Bakke         |  |     | 49 |  |              | Senior Vice President  National
    Leasing and Marketing                             
|James R. Bannon         |  |     | 47 |  |              | Senior Vice President  Operations                                                     
|Stephen M. Briggs       |  |     | 45 |  |              | Senior Vice President  Chief
    Accounting Officer                                   
|M. Patrick Callahan     |  |     | 42 |  |              | Senior Vice President  Seattle Region                                                 
|Robert E. Dezzutti      |  |     | 43 |  |              | Senior Vice President  Los Angeles
    Region                                         
|Maureen Fear            |  |     | 47 |  |              | Senior Vice President and Treasurer                                                    
|Debra L. Ferruzzi       |  |     | 43 |  |              | Senior Vice President  Corporate
    Strategy                                         
|Frank Frankini          |  |     | 49 |  |              | Senior Vice President  Development and
    Energy Operations                          
|Mark P. Geisreiter      |  |     | 42 |  |              | Senior Vice President 
    San Francisco Region                                       
|Matthew T. Gworek       |  |     | 43 |  |              | Senior Vice President  Investments                                                    
|Donald J. Huffner, Jr.  |  |     | 46 |  |              | Senior Vice President  Atlanta Region                                                 
|Peter D. Johnston       |  |     | 47 |  |              | Senior Vice President  Houston Region                                                 
|Kim J. Koehn            |  |     | 48 |  |              | Senior Vice President  Denver Region                                                  
|Diane M. Morefield      |  |     | 45 |  |              | Senior Vice President  Investor
    Relations                                         
|Scott T. Morey          |  |     | 39 |  |              | Senior Vice President  Chief
    Information Officer                                  
|John W. Peterson        |  |     | 40 |  |              | Senior Vice President  San Jose
    Region                                            
|Arvid A. Povilaitis     |  |     | 43 |  |              | Senior Vice President  Chicago Region                                                 
|John C. Schneider       |  |     | 45 |  |              | Senior Vice President  Legal and
    Associate General Counsel for Property Operations
|Mark E. Scully          |  |     | 45 |  |              | Senior Vice President  National Leasing                                               
|Paul R. Sorensen        |  |     | 44 |  |              | Senior Vice President  Portfolio
    Management                                       
|Maryann Gilligan Suydam |  |     | 54 |  |              | Senior Vice President  Boston Region                                                  

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Set forth below is biographical information for
each of the executive officers:

Richard D. Kincaidhas been a trustee and President since November 2002 and Chief
Executive Officer since April 2003. Mr. Kincaid also has
held the following positions:



| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Executive Vice President from March 1997 until
    November 2002;                                                                                                    
|
| |  | Chief Operating Officer from September 2001 until
    November 2002;                                                                                                 
|
| |  | Chief Financial Officer from March 1997 until
    August 2002;                                                                                                       
|
| |  | Senior Vice President from October 1996 until
    March 1997;                                                                                                        
|
| |  | Senior Vice President and Chief Financial Officer
    of Equity Office Holdings, L.L.C., a predecessor of ours, from
    July 1995 until October 1997;               
|
| |  | Senior Vice President of Equity Group
    Investments, Inc., an owner and financier of real estate and
    corporate investments, from February 1995 until July 1995;
|
| |  | Senior Vice President of the Yarmouth Group, a
    real estate investment company in New York, New York,
    from August 1994 until February 1995;                   
|
| |  | Senior Vice President  Finance of
    Equity Group Investments, Inc. from December 1993 until July
    1994; and                                                    
|
| |  | Vice President  Finance of Equity
    Group Investments, Inc. from August 1990 until December 1993.                                                                 

Jeffrey L. Johnsonhas been Executive Vice President and Chief Investment Officer
since May 2003. Mr. Johnson also has held the following
positions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Managing Partner and owner of Lakeshore Holdings,
    LLC, a private equity firm focusing on real estate investment
    founded by Mr. Johnson in conjunction with Lehman Brothers
    Holdings Inc., a global financial services firm, from December
    2002 until May 2003 (in this capacity, Mr. Johnson was
    responsible for all aspects of the business);                                                                                                    
|
| |  | Managing Director of Lehman Brothers Holdings
    Inc. from March 2000 until November 2002 (in this capacity,
    Mr. Johnson was a founding partner and co-head of domestic
    investments for Lehman Brothers first real estate private
    equity group and was instrumental in helping raise the
    companys $1.6 billion fund and developing the
    investment strategy for the fund, built the investment team and
    implemented its investment process);
|
| |  | Chief Investment Officer of Equity Office from
    March 1998 until June 1999; and                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Senior Vice President of Equity Office from March
    1997 until June 1999.                                                                                                                                                                                                                                                                                                                                                                                           

Lawrence J. Kremahas been Executive Vice President  Human Resources
and Communications since November 2002. Mr. Krema also has
held the following positions:



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

Peyton H.
Owen, Jr.has been Executive Vice
President and Chief Operating Officer since October 2003.
Mr. Owen also has held the following positions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Chief Operating Officer  Americas
    Region of Jones Lang LaSalle, a global provider of integrated
    real estate and investment management services, from April 1999
    until October 2003 (in this capacity, Mr. Owen oversaw
    5,500 people in 100 markets in the United States, Canada and
    Mexico; Investor Services, which included leasing and property
    management; Corporate Solutions, which included tenant
    representation, facility management and project management; and
    Capital Markets; and

10



---



##### Table of Contents



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | implemented standardized processes, new
    technologies and compliance measurements, and consolidated the
    organizational structure); and                                                                                                                                                                                                                                                                                                                             
|
| |  | Executive Vice President and Chief Operating
    Officer  Leasing and Management of LaSalle Partners,
    predecessor of Jones Lang LaSalle, from January 1996 until April
    1999 (in this capacity, Mr. Owen oversaw the leasing and
    management activities for a 200-million-square-foot investment
    property portfolio, restructured leasing and management across
    20 markets and led due diligence and integration in various
    corporate acquisitions.

Stanley M. Stevenshas been Executive Vice President since September 1996 and Chief
Legal Counsel and Secretary since October 1996. Mr. Stevens
also was Executive Vice President and General Counsel of Equity
Office Holdings, L.L.C. from September 1996 until October 1997.

Marsha C. Williamshas been Executive Vice President and Chief Financial Officer
since August 2002. Ms. Williams also has held the following
positions:



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

Robert J.
Winter, Jr.has been Executive
Vice President  Development and Portfolio Management
since November 2002. Mr. Winter also has held the following
positions:



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






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

All capitalized terms used herein and not
otherwise defined shall have the meanings given in the financial
statements and notes thereto set forth in Item 8. Financial
Statements and Supplementary Data. For information regarding
encumbrances on our properties, see Item 7.
Managements Discussion and Analysis of Financial Condition
and Results of Operations  Liquidity and Capital
Resources  Debt Financing  Mortgage Debt
and Item 15. Exhibits, Financial Statements, Schedules and
Reports on Form 8-K 
Schedule III  Real Estate and Accumulated
Depreciation as of December 31, 2003. All of our
consolidated properties are held in fee simple interest, except
for approximately 79 properties in which we have leasehold
interests and do not own the land or a portion thereof and one
property in which we are the mortgage holder.

11



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##### Table of Contents



General

We are the largest publicly-held owner and
operator of office properties in the United States based upon
equity market capitalization and square footage. At
December 31, 2003, we had a portfolio of 684 Office
Properties comprising approximately 122.3 million square
feet of commercial office space in 18 states and the
District of Columbia, 75 Industrial Properties comprising
approximately 5.8 million square feet and approximately
0.4 million square feet of office properties under
development. Approximately 42.3% of the total square feet of our
office properties is located in central business districts
(CBDs) and approximately 57.7% is located in
suburban markets. At December 31, 2003, our Office
Properties were approximately 86.3% occupied and our Industrial
Properties were approximately 86.6% occupied on a weighted
average basis. No single tenant accounts for more than 2.0% of
the aggregate annualized rent or 1.9% of the aggregate occupied
square feet.

For segment reporting purposes, the Office
Properties are included in the Office Properties
segment and the Industrial Properties are included in the
Corporate and Other segment.

All property data presented below are as of
December 31, 2003.

Property Statistics

Office Properties

The following table sets forth certain data
relating to our Office Properties, including those we own in
joint ventures with other partners. Our ten largest markets are
presented from greatest to least based on property net operating
income from continuing operations.

|                        |  |           |     |  |             |               |             |             |  |  |                 |   |               |                   |      |   |                 |   |           |                |  |  |       |   |  |   |       | 
|----------------------- |  | --------- | --- |  | ----------- | ------------- | ----------- | ----------- |  |  | --------------- | - | ------------- | ----------------- | ---- | - | --------------- | - | --------- | -------------- |  |  | ----- | - |  | - | ----- | 
|                        |  |           |     |  |             | Percentage of |             |             |  |  |                 |   | Percentage of |                   |      |  
|                        |  |           |     |  |             | Office        |             |             |  |  | Annualized Rent |   |               | Office            |      |   |                
|                        |  |           |     |  |             | Portfolio     |             |             |  |  | for Occupied    |   |               | Portfolio         |      |   | Annualized Rent |  
|                        |  | Number of |     |  | Rentable    |               |             | Rentable    |  |  | Percent         |   |               | Square Feet       |      |   | Annualized      |   |           | Per Occupied   | 
|Primary Market          |  | Buildings |     |  | Square Feet |               |             | Square Feet |  |  | Occupied        |   |               | (in thousands)(a) |      |   | Rent            |   |           | Square Foot(a) | 
|                        |  |           |     |  |             |               |             |             |  |  |                 |   |               |                   |      |   |                 |   |           |                | 
|San Francisco           |  |           | 81  |  |             |               | 10,951,996  |             |  |  | 9.0             | % |               |                   | 72.9 | % |                 | $ | 344,338   |                |  |  | 10.7  | % |  | $ | 43.14 | 
|Boston                  |  |           | 51  |  |             |               | 12,567,429  |             |  |  | 10.3            | % |               |                   | 92.4 | % |                 |   | 446,844   |                |  |  | 13.9  | % |  |   | 38.46 | 
|San Jose                |  |           | 128 |  |             |               | 8,726,796   |             |  |  | 7.1             | % |               |                   | 83.7 | % |                 |   | 273,736   |                |  |  | 8.5   | % |  |   | 37.48 | 
|Seattle                 |  |           | 54  |  |             |               | 9,974,085   |             |  |  | 8.2             | % |               |                   | 86.7 | % |                 |   | 236,287   |                |  |  | 7.4   | % |  |   | 27.32 | 
|New York                |  |           | 6   |  |             |               | 4,986,407   |             |  |  | 4.1             | % |               |                   | 97.5 | % |                 |   | 252,339   |                |  |  | 7.9   | % |  |   | 51.93 | 
|Chicago                 |  |           | 30  |  |             |               | 11,190,188  |             |  |  | 9.2             | % |               |                   | 86.6 | % |                 |   | 260,501   |                |  |  | 8.1   | % |  |   | 26.87 | 
|Washington D.C.         |  |           | 25  |  |             |               | 6,041,210   |             |  |  | 4.9             | % |               |                   | 87.8 | % |                 |   | 179,655   |                |  |  | 5.6   | % |  |   | 33.87 | 
|Los Angeles             |  |           | 43  |  |             |               | 6,786,081   |             |  |  | 5.6             | % |               |                   | 88.6 | % |                 |   | 179,691   |                |  |  | 5.6   | % |  |   | 29.87 | 
|Atlanta                 |  |           | 44  |  |             |               | 7,783,192   |             |  |  | 6.4             | % |               |                   | 79.4 | % |                 |   | 150,300   |                |  |  | 4.7   | % |  |   | 24.31 | 
|Orange County           |  |           | 31  |  |             |               | 5,872,834   |             |  |  | 4.8             | % |               |                   | 92.9 | % |                 |   | 134,963   |                |  |  | 4.2   | % |  |   | 24.74 | 
|All Others              |  |           | 191 |  |             |               | 37,374,707  |             |  |  | 30.6            | % |               |                   | 86.8 | % |                 |   | 752,185   |                |  |  | 23.4  | % |  |   | 23.18 | 
|                        |  |           |     |  |             |               |             |             |  |  |                 |   |               |                   |      |   |                 |   |           |                | 
|Total/ Weighted Average |  |           | 684 |  |             |               | 122,254,925 |             |  |  | 100.0           | % |               |                   | 86.3 | % |                 | $ | 3,210,838 |                |  |  | 100.0 | % |  | $ | 30.43 | 
|                        |  |           |     |  |             |               |             |             |  |  |                 |   |               |                   |      |   |                 |   |           |                | 

Industrial Properties

The following table sets forth certain data
relating to our Industrial Properties.

|                        |  |           |    |  |             |               |           |             |  |  |                 |   |               |                   |      |   |                 |   |        |                |  |  |       |   |  |   |       | 
|----------------------- |  | --------- | -- |  | ----------- | ------------- | --------- | ----------- |  |  | --------------- | - | ------------- | ----------------- | ---- | - | --------------- | - | ------ | -------------- |  |  | ----- | - |  | - | ----- | 
|                        |  |           |    |  |             | Percentage of |           |             |  |  |                 |   | Percentage of |                   |      |  
|                        |  |           |    |  |             | Industrial    |           |             |  |  | Annualized Rent |   |               | Industrial        |      |   |                
|                        |  |           |    |  |             | Portfolio     |           |             |  |  | for Occupied    |   |               | Portfolio         |      |   | Annualized Rent |  
|                        |  | Number of |    |  | Rentable    |               |           | Rentable    |  |  | Percent         |   |               | Square Feet       |      |   | Annualized      |   |        | Per Occupied   | 
|Primary Market          |  | Buildings |    |  | Square Feet |               |           | Square Feet |  |  | Occupied        |   |               | (in thousands)(a) |      |   | Rent            |   |        | Square Foot(a) | 
|                        |  |           |    |  |             |               |           |             |  |  |                 |   |               |                   |      |   |                 |   |        |                | 
|Oakland-East Bay        |  |           | 46 |  |             |               | 3,764,586 |             |  |  | 65.5            | % |               |                   | 88.9 | % |                 | $ | 26,801 |                |  |  | 59.1  | % |  | $ | 8.00  | 
|San Jose                |  |           | 28 |  |             |               | 1,855,673 |             |  |  | 32.3            | % |               |                   | 81.6 | % |                 |   | 18,099 |                |  |  | 39.9  | % |  |   | 11.96 | 
|Los Angeles             |  |           | 1  |  |             |               | 130,600   |             |  |  | 2.3             | % |               |                   | 91.2 | % |                 |   | 461    |                |  |  | 1.0   | % |  |   | 3.87  | 
|                        |  |           |    |  |             |               |           |             |  |  |                 |   |               |                   |      |   |                 |   |        |                | 
|Total/ Weighted Average |  |           | 75 |  |             |               | 5,750,859 |             |  |  | 100.0           | % |               |                   | 86.6 | % |                 | $ | 45,361 |                |  |  | 100.0 | % |  | $ | 9.11  | 
|                        |  |           |    |  |             |               |           |             |  |  |                 |   |               |                   |      |   |                 |   |        |                | 

12



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##### Table of Contents



Lease Distribution

The following table sets forth information
relating to the distribution of the Office Property leases,
based on occupied square feet.

|                        |  |                |             |            |             |  |                 |                   |            |           |            |  |                 |                |       |   |  |   |       | 
|----------------------- |  | -------------- | ----------- | ---------- | ----------- |  | --------------- | ----------------- | ---------- | --------- | ---------- |  | --------------- | -------------- | ----- | - |  | - | ----- | 
|                        |  |                |             | Percentage |             |  |                 |                   | Percentage |           |            | 
|                        |  |                |             | of Office  |             |  | Annualized Rent |                   |            | of Office |            |  |                
|                        |  |                |             | Portfolio  |             |  | for Occupied    |                   |            | Portfolio |            |  | Annualized Rent |               
|                        |  | Total Occupied |             |            | Occupied    |  |                 | Square Feet       |            |           | Annualized |  |                 | Per Occupied   |      
|Square Feet Under Lease |  | Square Feet(b) |             |            | Square Feet |  |                 | (in thousands)(a) |            |           | Rent(a)    |  |                 | Square Foot(a) |      
|                        |  |                |             |            |             |  |                 |                   |            |           |            |  |                 |                |      
|2,500 or less           |  |                | 4,930,318   |            |             |  | 4.7             | %                 |            | $         | 136,258    |  |                 |                | 4.2   | % |  | $ | 27.64 | 
|2,501  5,000           |  |                | 7,565,356   |            |             |  | 7.2             | %                 |            |           | 212,500    |  |                 |                | 6.6   | % |  |   | 28.09 | 
|5,001  7,500           |  |                | 6,329,159   |            |             |  | 6.0             | %                 |            |           | 183,552    |  |                 |                | 5.7   | % |  |   | 29.00 | 
|7,501  10,000          |  |                | 5,055,378   |            |             |  | 4.8             | %                 |            |           | 143,913    |  |                 |                | 4.5   | % |  |   | 28.47 | 
|10,001  20,000         |  |                | 15,428,173  |            |             |  | 14.7            | %                 |            |           | 436,410    |  |                 |                | 13.6  | % |  |   | 28.29 | 
|20,001  40,000         |  |                | 17,062,916  |            |             |  | 16.3            | %                 |            |           | 510,802    |  |                 |                | 15.9  | % |  |   | 29.94 | 
|40,001  60,000         |  |                | 9,974,539   |            |             |  | 9.5             | %                 |            |           | 308,082    |  |                 |                | 9.6   | % |  |   | 30.89 | 
|60,001  100,000        |  |                | 10,927,854  |            |             |  | 10.4            | %                 |            |           | 338,834    |  |                 |                | 10.6  | % |  |   | 31.01 | 
|100,001 or greater      |  |                | 27,550,342  |            |             |  | 26.3            | %                 |            |           | 940,488    |  |                 |                | 29.3  | % |  |   | 34.14 | 
|                        |  |                |             |            |             |  |                 |                   |            |           |            |  |                 |                |      
|Total/ Weighted Average |  |                | 104,824,035 |            |             |  | 100.0           | %                 |            | $         | 3,210,838  |  |                 |                | 100.0 | % |  | $ | 30.43 | 
|                        |  |                |             |            |             |  |                 |                   |            |           |            |  |                 |                |      



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Annualized rent is the monthly contractual rent
    as of the reporting date, or if the current rent payable is $0
    then the first monthly rent payment due, under existing leases
    as of December 31, 2003 multiplied by 12 months
    (Annualized Rent). This amount reflects total base
    rent and estimated expense reimbursements from tenants as of
    December 31, 2003 without regard to any rent abatements and
    contractual increases or decreases in rent subsequent to
    December 31, 2003. Total rent abatements for leases in
    place as of December 31, 2003, for the period from
    January 1, 2004 to December 31, 2004, are
    approximately $38.2 million for Office Properties and
    approximately $0.1 million for Industrial Properties. We
    believe Annualized Rent is a useful measure because this
    information can be used for comparison to current market rents
    as published by various third party sources.
|   
|(b) |  | Reconciliation for total net rentable square feet
    for Office Properties is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                                                                |  |                |             |            |       |  |       |  
|--------------------------------------------------------------- |  | -------------- | ----------- | ---------- | ----- |  | ----- | -
|                                                                |  |                |             | Percent of |      
|                                                                |  | Square Footage |             |            | Total | 
|                                                                |  |                |             |            |       | 
|Square footage occupied by tenants                              |  |                | 104,824,035 |            |       |  | 85.7  | %
|Square footage used for management offices and
    building use |  |                | 685,098     |            |       |  | 0.6   | %
|                                                                |  |                |             |            |       | 
|Total occupied square feet                                      |  |                | 105,509,133 |            |       |  | 86.3  | %
|Leased and unoccupied square feet                               |  |                | 2,238,326   |            |       |  | 1.8   | %
|Unleased square feet                                            |  |                | 14,507,466  |            |       |  | 11.9  | %
|                                                                |  |                |             |            |       | 
|Total rentable square feet                                      |  |                | 122,254,925 |            |       |  | 100.0 | %
|                                                                |  |                |             |            |       | 

13



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##### Table of Contents



Office Lease Expiration
Schedule (a)

December 31, 2003


The following schedule is based upon the
contractual termination date of the leases, without regard to
any lease termination and/or renewal options. Some of our leases
are subject to various forms of lease termination options
exercisable by tenants. Depending on the form of the option,
some of these options may or may not require the payment of a
fee and a notice period as a condition to exercise. Although it
is not possible to predict which tenants are likely to exercise
these options, it has been our experience that markets in which
the contractual rents are significantly higher than current
market rents incur the greatest incidence of lease termination
option exercises. As a result of these lease termination options
and other factors, such as tenant insolvencies, the actual
termination dates of some portion of the leases may vary from
the contractual expiration date set forth in the schedule.

|                                            |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |   |  |   |           |  
|------------------------------------------- |  | ----------------------------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | - |  | ---- | --------- | - | ---- | - | --------- | - |  | - | --------- | -
|                                            |  | 2004 and                                              |           |   |      |   |           |      |  |   |           |   | 
|                                            |  | month to                                              |           |   |      |   |           |      |  |   |           |   | 
|                                            |  | month(b)                                              |           |   | 2005 |   |           | 2006 |  |   | 2007      |   |  | 2008 |           |   | 2009 |  
|                                            |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |  
|                                            |  |                                                      
|                                            |  | (Dollars in thousands except per square foot amounts) |          
|San Francisco                               |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |   |  |   |           |  
|Square Feet(c)                              |  |                                                       | 1,009,511 |   |      |   | 1,464,946 |      |  |   | 751,770   |   |  |      | 1,112,598 |   |      |   | 1,077,307 |   |  |   | 504,907   |  
|% Square Feet(d)                            |  |                                                       | 9.2       | % |      |   | 13.4      | %    |  |   | 6.9       | % |  |      | 10.2      | % |      |   | 9.8       | % |  |   | 4.6       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 39,893    |   |      | $ | 61,053    |      |  | $ | 36,794    |   |  | $    | 41,765    |   |      | $ | 45,072    |   |  | $ | 17,625    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 39.52     |   |      | $ | 41.68     |      |  | $ | 48.94     |   |  | $    | 37.54     |   |      | $ | 41.84     |   |  | $ | 34.91     |  
|Boston                                      |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |   |  |   |           |  
|Square Feet(c)                              |  |                                                       | 1,193,587 |   |      |   | 1,146,422 |      |  |   | 880,327   |   |  |      | 1,474,248 |   |      |   | 1,382,875 |   |  |   | 1,002,949 |  
|% Square Feet(d)                            |  |                                                       | 9.5       | % |      |   | 9.1       | %    |  |   | 7.0       | % |  |      | 11.7      | % |      |   | 11.0      | % |  |   | 8.0       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 39,702    |   |      | $ | 41,251    |      |  | $ | 29,101    |   |  | $    | 58,157    |   |      | $ | 51,963    |   |  | $ | 40,439    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 33.26     |   |      | $ | 35.98     |      |  | $ | 33.06     |   |  | $    | 39.45     |   |      | $ | 37.58     |   |  | $ | 40.32     |  
|San Jose                                    |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |   |  |   |           |  
|Square Feet(c)                              |  |                                                       | 831,826   |   |      |   | 1,694,765 |      |  |   | 987,895   |   |  |      | 674,406   |   |      |   | 371,645   |   |  |   | 256,563   |  
|% Square Feet(d)                            |  |                                                       | 9.5       | % |      |   | 19.4      | %    |  |   | 11.3      | % |  |      | 7.7       | % |      |   | 4.3       | % |  |   | 2.9       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 26,889    |   |      | $ | 52,910    |      |  | $ | 35,192    |   |  | $    | 25,508    |   |      | $ | 11,126    |   |  | $ | 7,303     |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 32.33     |   |      | $ | 31.22     |      |  | $ | 35.62     |   |  | $    | 37.82     |   |      | $ | 29.94     |   |  | $ | 28.46     |  
|Seattle                                     |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |   |  |   |           |  
|Square Feet(c)                              |  |                                                       | 1,105,585 |   |      |   | 1,099,859 |      |  |   | 1,062,424 |   |  |      | 770,384   |   |      |   | 1,221,543 |   |  |   | 777,771   |  
|% Square Feet(d)                            |  |                                                       | 11.1      | % |      |   | 11.0      | %    |  |   | 10.7      | % |  |      | 7.7       | % |      |   | 12.2      | % |  |   | 7.8       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 29,454    |   |      | $ | 34,443    |      |  | $ | 29,786    |   |  | $    | 22,108    |   |      | $ | 31,520    |   |  | $ | 18,142    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 26.64     |   |      | $ | 31.32     |      |  | $ | 28.04     |   |  | $    | 28.70     |   |      | $ | 25.80     |   |  | $ | 23.33     |  
|New York                                    |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |      |           |   |      |   |           |   |  |   |           |  
|Square Feet(c)                              |  |                                                       | 325,549   |   |      |   | 143,751   |      |  |   | 199,790   |   |  |      | 151,962   |   |      |   | 127,331   |   |  |   | 1,183,361 |  
|% Square Feet(d)                            |  |                                                       | 6.5       | % |      |   | 2.9       | %    |  |   | 4.0       | % |  |      | 3.0       | % |      |   | 2.6       | % |  |   | 23.7      | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 15,059    |   |      | $ | 7,733     |      |  | $ | 12,141    |   |  | $    | 7,625     |   |      | $ | 7,616     |   |  | $ | 66,069    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 46.26     |   |      | $ | 53.80     |      |  | $ | 60.77     |   |  | $    | 50.18     |   |      | $ | 59.82     |   |  | $ | 55.83     |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                            |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |   |           |   |  |   |            |  
|------------------------------------------- |  | ----------------------------------------------------- | --------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ------------- | --------- | - | ------ | - | --------- | - |  | - | ---------- | -
|                                            |  | 2010                                                  |           |   | 2011 |   |         | 2012 |  |   | 2013    |   |  | Thereafter(f) |           |   | Totals |  
|                                            |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |  
|                                            |  |                                                      
|                                            |  | (Dollars in thousands except per square foot amounts) |          
|San Francisco                               |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 886,179   |   |      |   | 337,684 |      |  |   | 49,195  |   |  |               | 240,878   |   |        |   | 546,662   |   |  |   | 7,981,637  |  
|% Square Feet(d)                            |  |                                                       | 8.1       | % |      |   | 3.1     | %    |  |   | 0.4     | % |  |               | 2.2       | % |        |   | 5.0       | % |  |   | 72.9       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 42,771    |   |      | $ | 16,533  |      |  | $ | 1,303   |   |  | $             | 9,134     |   |        | $ | 32,394    |   |  | $ | 344,338    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 48.26     |   |      | $ | 48.96   |      |  | $ | 26.49   |   |  | $             | 37.92     |   |        | $ | 59.26     |   |  | $ | 43.14      |  
|Boston                                      |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 1,208,855 |   |      |   | 188,018 |      |  |   | 758,869 |   |  |               | 1,325,699 |   |        |   | 1,056,279 |   |  |   | 11,618,128 |  
|% Square Feet(d)                            |  |                                                       | 9.6       | % |      |   | 1.5     | %    |  |   | 6.0     | % |  |               | 10.5      | % |        |   | 8.4       | % |  |   | 92.4       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 46,552    |   |      | $ | 9,579   |      |  | $ | 33,644  |   |  | $             | 53,569    |   |        | $ | 42,885    |   |  | $ | 446,844    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 38.51     |   |      | $ | 50.95   |      |  | $ | 44.33   |   |  | $             | 40.41     |   |        | $ | 40.60     |   |  | $ | 38.46      |  
|San Jose                                    |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 772,627   |   |      |   | 695,224 |      |  |   | 497,811 |   |  |               | 116,214   |   |        |   | 403,773   |   |  |   | 7,302,749  |  
|% Square Feet(d)                            |  |                                                       | 8.9       | % |      |   | 8.0     | %    |  |   | 5.7     | % |  |               | 1.3       | % |        |   | 4.6       | % |  |   | 83.7       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 31,097    |   |      | $ | 40,981  |      |  | $ | 31,153  |   |  | $             | 3,608     |   |        | $ | 7,969     |   |  | $ | 273,736    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 40.25     |   |      | $ | 58.95   |      |  | $ | 62.58   |   |  | $             | 31.04     |   |        | $ | 19.74     |   |  | $ | 37.48      |  
|Seattle                                     |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 876,223   |   |      |   | 325,447 |      |  |   | 371,868 |   |  |               | 396,924   |   |        |   | 642,192   |   |  |   | 8,650,220  |  
|% Square Feet(d)                            |  |                                                       | 8.8       | % |      |   | 3.3     | %    |  |   | 3.7     | % |  |               | 4.0       | % |        |   | 6.4       | % |  |   | 86.7       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 25,715    |   |      | $ | 9,782   |      |  | $ | 11,056  |   |  | $             | 9,708     |   |        | $ | 14,575    |   |  | $ | 236,287    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 29.35     |   |      | $ | 30.06   |      |  | $ | 29.73   |   |  | $             | 24.46     |   |        | $ | 22.70     |   |  | $ | 27.32      |  
|New York                                    |  |                                                       |           |   |      |   |         |      |  |   |         |   |  |               |           |   |        |   |           |   |  |   |            |  
|Square Feet(c)                              |  |                                                       | 152,239   |   |      |   | 734,960 |      |  |   | 485,978 |   |  |               | 404,601   |   |        |   | 950,089   |   |  |   | 4,859,611  |  
|% Square Feet(d)                            |  |                                                       | 3.1       | % |      |   | 14.7    | %    |  |   | 9.7     | % |  |               | 8.1       | % |        |   | 19.1      | % |  |   | 97.5       | %
|Annualized Rent for occupied square feet(e) |  | $                                                     | 7,526     |   |      | $ | 35,688  |      |  | $ | 21,462  |   |  | $             | 20,663    |   |        | $ | 50,757    |   |  | $ | 252,339    |  
|Annualized Rent per occupied square foot(e) |  | $                                                     | 49.44     |   |      | $ | 48.56   |      |  | $ | 44.16   |   |  | $             | 51.07     |   |        | $ | 53.42     |   |  | $ | 51.93      |  

14



---



##### Table of Contents



|                                             |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|-------------------------------------------- |  | ----------------------------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | ---- | ---------- | - | ---- | - | ---------- | - |  | - | --------- | -
|                                             |  | 2004 and                                              |            |   |      |   |            |      |  |   |            |   | 
|                                             |  | month to                                              |            |   |      |   |            |      |  |   |            |   | 
|                                             |  | month(b)                                              |            |   | 2005 |   |            | 2006 |  |   | 2007       |   |  | 2008 |            |   | 2009 |  
|                                             |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |  
|                                             |  |                                                      
|                                             |  | (Dollars in thousands except per square foot amounts) |           
|Chicago                                      |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 1,093,803  |   |      |   | 969,846    |      |  |   | 1,353,517  |   |  |      | 822,915    |   |      |   | 1,692,289  |   |  |   | 633,073   |  
|% Square Feet(d)                             |  |                                                       | 9.8        | % |      |   | 8.7        | %    |  |   | 12.1       | % |  |      | 7.4        | % |      |   | 15.1       | % |  |   | 5.7       | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 28,991     |   |      | $ | 27,199     |      |  | $ | 38,568     |   |  | $    | 22,090     |   |      | $ | 48,977     |   |  | $ | 19,916    |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 26.50      |   |      | $ | 28.04      |      |  | $ | 28.49      |   |  | $    | 26.84      |   |      | $ | 28.94      |   |  | $ | 31.46     |  
|Washington D.C.                              |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 533,264    |   |      |   | 696,721    |      |  |   | 603,985    |   |  |      | 568,234    |   |      |   | 886,377    |   |  |   | 315,370   |  
|% Square Feet(d)                             |  |                                                       | 8.8        | % |      |   | 11.5       | %    |  |   | 10.0       | % |  |      | 9.4        | % |      |   | 14.7       | % |  |   | 5.2       | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 16,242     |   |      | $ | 26,561     |      |  | $ | 21,954     |   |  | $    | 15,740     |   |      | $ | 29,214     |   |  | $ | 10,067    |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 30.46      |   |      | $ | 38.12      |      |  | $ | 36.35      |   |  | $    | 27.70      |   |      | $ | 32.96      |   |  | $ | 31.92     |  
|Los Angeles                                  |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 413,414    |   |      |   | 705,164    |      |  |   | 912,461    |   |  |      | 858,479    |   |      |   | 504,390    |   |  |   | 404,406   |  
|% Square Feet(d)                             |  |                                                       | 6.1        | % |      |   | 10.4       | %    |  |   | 13.4       | % |  |      | 12.7       | % |      |   | 7.4        | % |  |   | 6.0       | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 12,222     |   |      | $ | 21,637     |      |  | $ | 28,097     |   |  | $    | 28,345     |   |      | $ | 15,287     |   |  | $ | 10,657    |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 29.56      |   |      | $ | 30.68      |      |  | $ | 30.79      |   |  | $    | 33.02      |   |      | $ | 30.31      |   |  | $ | 26.35     |  
|Atlanta                                      |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 514,867    |   |      |   | 537,442    |      |  |   | 1,335,908  |   |  |      | 780,908    |   |      |   | 560,938    |   |  |   | 600,417   |  
|% Square Feet(d)                             |  |                                                       | 6.6        | % |      |   | 6.9        | %    |  |   | 17.2       | % |  |      | 10.0       | % |      |   | 7.2        | % |  |   | 7.7       | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 10,306     |   |      | $ | 12,721     |      |  | $ | 37,585     |   |  | $    | 16,663     |   |      | $ | 10,392     |   |  | $ | 18,007    |  
|Annualized Rent per occupied square foot (e) |  | $                                                     | 20.02      |   |      | $ | 23.67      |      |  | $ | 28.13      |   |  | $    | 21.34      |   |      | $ | 18.53      |   |  | $ | 29.99     |  
|Orange County                                |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 745,620    |   |      |   | 978,571    |      |  |   | 810,986    |   |  |      | 848,413    |   |      |   | 1,328,553  |   |  |   | 251,658   |  
|% Square Feet(d)                             |  |                                                       | 12.7       | % |      |   | 16.7       | %    |  |   | 13.8       | % |  |      | 14.4       | % |      |   | 22.6       | % |  |   | 4.3       | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 19,007     |   |      | $ | 25,741     |      |  | $ | 20,982     |   |  | $    | 21,877     |   |      | $ | 29,782     |   |  | $ | 6,293     |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 25.49      |   |      | $ | 26.30      |      |  | $ | 25.87      |   |  | $    | 25.79      |   |      | $ | 22.42      |   |  | $ | 25.01     |  
|All Others                                   |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 4,420,733  |   |      |   | 4,143,014  |      |  |   | 5,085,172  |   |  |      | 4,336,768  |   |      |   | 4,494,584  |   |  |   | 3,740,854 |  
|% Square Feet(d)                             |  |                                                       | 11.8       | % |      |   | 11.1       | %    |  |   | 13.6       | % |  |      | 11.6       | % |      |   | 12.0       | % |  |   | 10.0      | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 99,875     |   |      | $ | 103,666    |      |  | $ | 122,662    |   |  | $    | 102,560    |   |      | $ | 99,245     |   |  | $ | 81,389    |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 22.59      |   |      | $ | 25.02      |      |  | $ | 24.12      |   |  | $    | 23.65      |   |      | $ | 22.08      |   |  | $ | 21.76     |  
|Total Portfolio                              |  |                                                       |            |   |      |   |            |      |  |   |            |   |  |      |            |   |      |   |            |   |  |   |           |  
|Square Feet(c)                               |  |                                                       | 12,187,759 |   |      |   | 13,580,501 |      |  |   | 13,984,235 |   |  |      | 12,399,315 |   |      |   | 13,647,832 |   |  |   | 9,671,329 |  
|% Square Feet(d)                             |  |                                                       | 10.0       | % |      |   | 11.1       | %    |  |   | 11.4       | % |  |      | 10.1       | % |      |   | 11.2       | % |  |   | 7.9       | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 337,639    |   |      | $ | 414,916    |      |  | $ | 412,863    |   |  | $    | 362,439    |   |      | $ | 380,194    |   |  | $ | 295,907   |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 27.70      |   |      | $ | 30.55      |      |  | $ | 29.52      |   |  | $    | 29.23      |   |      | $ | 27.86      |   |  | $ | 30.60     |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                             |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|-------------------------------------------- |  | ----------------------------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | - |  | ------------- | --------- | - | ------ | - | --------- | - |  | - | ----------- | -
|                                             |  | 2010                                                  |           |   | 2011 |   |           | 2012 |  |   | 2013      |   |  | Thereafter(f) |           |   | Totals |  
|                                             |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |  
|                                             |  |                                                      
|                                             |  | (Dollars in thousands except per square foot amounts) |          
|Chicago                                      |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 985,519   |   |      |   | 470,761   |      |  |   | 569,999   |   |  |               | 460,471   |   |        |   | 643,281   |   |  |   | 9,695,474   |  
|% Square Feet(d)                             |  |                                                       | 8.8       | % |      |   | 4.2       | %    |  |   | 5.1       | % |  |               | 4.1       | % |        |   | 5.7       | % |  |   | 86.6        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 25,605    |   |      | $ | 11,591    |      |  | $ | 16,391    |   |  | $             | 11,367    |   |        | $ | 9,807     |   |  | $ | 260,501     |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 25.98     |   |      | $ | 24.62     |      |  | $ | 28.76     |   |  | $             | 24.69     |   |        | $ | 15.24     |   |  | $ | 26.87       |  
|Washington D.C.                              |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 251,275   |   |      |   | 458,056   |      |  |   | 298,406   |   |  |               | 232,322   |   |        |   | 460,714   |   |  |   | 5,304,724   |  
|% Square Feet(d)                             |  |                                                       | 4.2       | % |      |   | 7.6       | %    |  |   | 4.9       | % |  |               | 3.8       | % |        |   | 7.6       | % |  |   | 87.8        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 11,404    |   |      | $ | 14,505    |      |  | $ | 9,072     |   |  | $             | 8,042     |   |        | $ | 16,855    |   |  | $ | 179,655     |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 45.38     |   |      | $ | 31.67     |      |  | $ | 30.40     |   |  | $             | 34.62     |   |        | $ | 36.58     |   |  | $ | 33.87       |  
|Los Angeles                                  |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 416,565   |   |      |   | 196,635   |      |  |   | 528,546   |   |  |               | 398,439   |   |        |   | 676,917   |   |  |   | 6,015,416   |  
|% Square Feet(d)                             |  |                                                       | 6.1       | % |      |   | 2.9       | %    |  |   | 7.8       | % |  |               | 5.9       | % |        |   | 10.0      | % |  |   | 88.6        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 10,990    |   |      | $ | 5,904     |      |  | $ | 16,259    |   |  | $             | 13,416    |   |        | $ | 16,877    |   |  | $ | 179,691     |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 26.38     |   |      | $ | 30.03     |      |  | $ | 30.76     |   |  | $             | 33.67     |   |        | $ | 24.93     |   |  | $ | 29.87       |  
|Atlanta                                      |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 1,092,189 |   |      |   | 181,639   |      |  |   | 74,680    |   |  |               | 126,367   |   |        |   | 376,816   |   |  |   | 6,182,171   |  
|% Square Feet(d)                             |  |                                                       | 14.0      | % |      |   | 2.3       | %    |  |   | 1.0       | % |  |               | 1.6       | % |        |   | 4.8       | % |  |   | 79.4        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 27,443    |   |      | $ | 4,338     |      |  | $ | 1,704     |   |  | $             | 2,839     |   |        | $ | 8,301     |   |  | $ | 150,300     |  
|Annualized Rent per occupied square foot (e) |  | $                                                     | 25.13     |   |      | $ | 23.88     |      |  | $ | 22.82     |   |  | $             | 22.46     |   |        | $ | 22.03     |   |  | $ | 24.31       |  
|Orange County                                |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 120,430   |   |      |   | 76,442    |      |  |   | 114,571   |   |  |               | 138,583   |   |        |   | 42,068    |   |  |   | 5,455,895   |  
|% Square Feet(d)                             |  |                                                       | 2.1       | % |      |   | 1.3       | %    |  |   | 2.0       | % |  |               | 2.4       | % |        |   | 0.7       | % |  |   | 92.9        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 2,983     |   |      | $ | 2,004     |      |  | $ | 2,820     |   |  | $             | 3,117     |   |        | $ | 357       |   |  | $ | 134,963     |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 24.77     |   |      | $ | 26.22     |      |  | $ | 24.62     |   |  | $             | 22.49     |   |        | $ | 8.48      |   |  | $ | 24.74       |  
|All Others                                   |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 1,589,704 |   |      |   | 967,788   |      |  |   | 890,933   |   |  |               | 774,370   |   |        |   | 1,999,188 |   |  |   | 32,443,108  |  
|% Square Feet(d)                             |  |                                                       | 4.3       | % |      |   | 2.6       | %    |  |   | 2.4       | % |  |               | 2.1       | % |        |   | 5.3       | % |  |   | 86.8        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 36,498    |   |      | $ | 25,592    |      |  | $ | 20,030    |   |  | $             | 21,151    |   |        | $ | 39,515    |   |  | $ | 752,185     |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 22.96     |   |      | $ | 26.44     |      |  | $ | 22.48     |   |  | $             | 27.31     |   |        | $ | 19.77     |   |  | $ | 23.18       |  
|Total Portfolio                              |  |                                                       |           |   |      |   |           |      |  |   |           |   |  |               |           |   |        |   |           |   |  |   |             |  
|Square Feet(c)                               |  |                                                       | 8,351,805 |   |      |   | 4,632,654 |      |  |   | 4,640,856 |   |  |               | 4,614,868 |   |        |   | 7,797,979 |   |  |   | 105,509,133 |  
|% Square Feet(d)                             |  |                                                       | 6.8       | % |      |   | 3.8       | %    |  |   | 3.8       | % |  |               | 3.8       | % |        |   | 6.4       | % |  |   | 86.3        | %
|Annualized Rent for occupied square feet(e)  |  | $                                                     | 268,585   |   |      | $ | 176,498   |      |  | $ | 164,895   |   |  | $             | 156,613   |   |        | $ | 240,290   |   |  | $ | 3,210,838   |  
|Annualized Rent per occupied square foot(e)  |  | $                                                     | 32.16     |   |      | $ | 38.10     |      |  | $ | 35.53     |   |  | $             | 33.94     |   |        | $ | 30.81     |   |  | $ | 30.43       |  

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---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Based on the contractual termination date of the
    lease without regard to any early lease termination and/or
    renewal options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(b) | Total square feet subject to month to month
    leases is approximately 955,976.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(c) | Total net rentable square feet represented by
    expiring leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(d) | Percentage of total net rentable square feet
    represented by expiring leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(e) | Based on annualized rent. Annualized rent is the
    monthly contractual rent as of the reporting date, or if the
    current rent payable is $0 then the first monthly rent payment
    due, under existing leases as of December 31, 2003
    multiplied by 12 months (Annualized Rent). This
    amount reflects total base rent and estimated expense
    reimbursements from tenants as of December 31, 2003 without
    regard to any rent abatements and contractual increases or
    decreases in rent subsequent to December 31, 2003. Total
    rent abatements for leases in place as of December 31,
    2003, for the period from January 1, 2004 to
    December 31, 2004, are approximately $38.2 million. We
    believe Annualized Rent is a useful measure because this
    information can be used for comparison to current market rents
    as published by various third party sources.



|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(f) | Management offices and building use square
    footage are included with $0 rent per square foot.

16



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##### Table of Contents








|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.

Except as described below, we are not presently
subject to material litigation nor, to our knowledge, is any
material litigation threatened against us, other than routine
actions for negligence and other claims and administrative
proceedings arising in the ordinary course of business, some of
which are expected to be covered by liability insurance and all
of which collectively are not expected to have a material
adverse effect on our financial condition, results of
operations, or liquidity.

On May 8, 2003, Broadband Office, Inc. and
the official committee of unsecured creditors of Broadband
Office Inc. (collectively, the Plaintiffs), filed a
complaint (the Complaint) in the United States
Bankruptcy Court for the District of Delaware against one
private and seven public real estate companies, various
affiliated entities (collectively the Corporate
Defendants) and certain individuals, including Equity
Office, EOP Partnership, David Helfand (a former executive vice
president of Equity Office), Spieker Properties, Inc. and
Spieker Properties, L.P. (which we acquired in 2001) and Craig
Vought (formerly co-chief executive officer of Spieker
Properties, Inc. and a former Equity Office trustee). Under the
terms of our indemnification agreements with
Messrs. Helfand and Vought, we may be responsible to
reimburse them for the effect of any judgment rendered against
them personally as well as the costs of their defense. We were
an equity investor in, landlord to and customer of Broadband
Office, and Messrs. Helfand and Vought were members of the
board of directors of Broadband Office until their resignations
on May 1, 2001 and May 2, 2001, respectively.
Mr. Vought also served as a member of Broadband
Offices executive committee. Broadband Office filed for
bankruptcy protection on May 9, 2001. The First Amended
Complaint alleges, among other things, breaches of fiduciary
duty and seeks recovery of what it characterizes as preferential
payments and fraudulent transfers. It further seeks to hold us
liable for the outstanding debts of the corporation, jointly and
severally with all of the Corporate Defendants, as an alleged
general partner of Broadband Office. The Plaintiffs
allege that the amount of these claims exceeds $300 million
in the aggregate. Due to the inherent uncertainties of the
judicial process and the early stage of this action, we are
unable to predict the outcome of this matter with certainty. We
intend to vigorously defend this matter and believe we have
meritorious defenses. As a result, we have not accrued for any
potential liability in connection with this litigation. As in
any litigation, there can be no assurance that we will prevail.
Should the court not resolve this matter in our favor it could
have a material adverse effect on our financial condition,
results of operations and liquidity.






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

None.

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##### Table of Contents






PART II






|        |                                                                           
|------- | --------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity and
    Related Stockholder Matters.

There is no established public trading market for
the Units. Equity Offices Common Shares are traded on the
New York Stock Exchange (NYSE) under the symbol
EOP. On February 27, 2004, there were
approximately 528 holders of record and
450,162,700 Units outstanding, 401,322,247 of which were
held by Equity Office. The high and low sales prices and closing
sales prices on the NYSE and distributions for the Common Shares
during 2003 and 2002 are set forth in the table below. We paid
an equivalent distribution on our Units to the distributions
paid by Equity Office on its Common Shares during each of the
periods presented.

|     |  |         |        |  |      |   |       |     |  |   |       |  |  |               |       |  |  |   |      | 
|---- |  | ------- | ------ |  | ---- | - | ----- | --- |  | - | ----- |  |  | ------------- | ----- |  |  | - | ---- | 
|Year |  | Quarter |        |  | High |   |       | Low |  |   | Close |  |  | Distributions |      
|     |  |         |        |  |      |   |       |     |  |   |       |  |  |               |      
|2003 |  |         | Fourth |  |      | $ | 29.30 |     |  | $ | 26.99 |  |  | $             | 28.65 |  |  | $ | 0.50 | 
|     |  |         | Third  |  |      | $ | 28.20 |     |  | $ | 26.46 |  |  | $             | 27.53 |  |  | $ | 0.50 | 
|     |  |         | Second |  |      | $ | 27.92 |     |  | $ | 25.52 |  |  | $             | 27.01 |  |  | $ | 0.50 | 
|     |  |         | First  |  |      | $ | 26.24 |     |  | $ | 23.31 |  |  | $             | 25.45 |  |  | $ | 0.50 | 
|2002 |  |         | Fourth |  |      | $ | 26.25 |     |  | $ | 22.96 |  |  | $             | 24.98 |  |  | $ | 0.50 | 
|     |  |         | Third  |  |      | $ | 29.93 |     |  | $ | 22.78 |  |  | $             | 25.82 |  |  | $ | 0.50 | 
|     |  |         | Second |  |      | $ | 31.36 |     |  | $ | 27.96 |  |  | $             | 30.10 |  |  | $ | 0.50 | 
|     |  |         | First  |  |      | $ | 30.60 |     |  | $ | 27.18 |  |  | $             | 29.99 |  |  | $ | 0.50 | 

18



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##### Table of Contents








|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.

The following sets forth our selected
consolidated financial and operating information on a historical
basis. The selected financial data has been derived from our
historical consolidated financial statements. The following
information should be read together with our consolidated
financial statements and notes thereto included in Item 8.
Financial Statements and Supplementary Data.

|                                                                                        |  |                                              |            |   |      |   |            |         |  |   |            |   |  |      |            |   |  |   |            |  
|--------------------------------------------------------------------------------------- |  | -------------------------------------------- | ---------- | - | ---- | - | ---------- | ------- |  | - | ---------- | - |  | ---- | ---------- | - |  | - | ---------- | -
|                                                                                        |  |                                             
|                                                                                        |  | For the years ended December 31,             |           
|                                                                                        |  |                                              |           
|                                                                                        |  | 2003                                         |            |   | 2002 |   |            | 2001(1) |  |   | 2000(2)    |   |  | 1999 |           
|                                                                                        |  |                                              |            |   |      |   |            |         |  |   |            |   |  |      |           
|                                                                                        |  |                                             
|                                                                                        |  | (Dollars in thousands, except per unit data) |           
|Operating Data:                                                                         |  |                                              |            |   |      |   |            |         |  |   |            |   |  |      |            |   |  |   |            |  
|Total revenues                                                                          |  | $                                            | 3,195,632  |   |      | $ | 3,359,766  |         |  | $ | 2,966,146  |   |  | $    | 2,164,707  |   |  | $ | 1,877,521  |  
|Lease termination income(3)                                                             |  | $                                            | 68,408     |   |      | $ | 151,969    |         |  | $ | 41,230     |   |  | $    | 19,829     |   |  | $ | 15,948     |  
|Income from continuing operations                                                       |  | $                                            | 623,276    |   |      | $ | 760,110    |         |  | $ | 640,827    |   |  | $    | 507,210    |   |  | $ | 461,638    |  
|Net income available to unitholders                                                     |  | $                                            | 677,342    |   |      | $ | 796,847    |         |  | $ | 640,045    |   |  | $    | 484,312    |   |  | $ | 430,264    |  
|Funds from Operations available to
    unitholders  basic(4)                           |  | $                                            | 1,273,823  |   |      | $ | 1,504,544  |         |  | $ | 1,174,447  |   |  | $    | 909,157    |   |  | $ | 739,093    |  
|Funds from Operations available to unitholders
    plus assumed conversions(4)          |  | $                                            | 1,289,547  |   |      | $ | 1,520,268  |         |  | $ | 1,190,174  |   |  | $    | 924,907    |   |  | $ | 754,843    |  
|Property net operating income(5)                                                        |  | $                                            | 2,111,793  |   |      | $ | 2,305,323  |         |  | $ | 2,020,847  |   |  | $    | 1,410,705  |   |  | $ | 1,207,259  |  
|Income from continuing operations per unit-basic                                        |  | $                                            | 1.27       |   |      | $ | 1.49       |         |  | $ | 1.43       |   |  | $    | 1.47       |   |  | $ | 1.45       |  
|Income from continuing operations per unit-diluted                                      |  | $                                            | 1.26       |   |      | $ | 1.49       |         |  | $ | 1.42       |   |  | $    | 1.45       |   |  | $ | 1.44       |  
|Net income available to unitholders per unit-basic                                      |  | $                                            | 1.50       |   |      | $ | 1.71       |         |  | $ | 1.57       |   |  | $    | 1.53       |   |  | $ | 1.49       |  
|Net income available to unitholders per
    unit-diluted                                |  | $                                            | 1.50       |   |      | $ | 1.70       |         |  | $ | 1.55       |   |  | $    | 1.52       |   |  | $ | 1.48       |  
|Funds from Operations available to unitholders
    per unit  basic(4)                  |  | $                                            | 2.83       |   |      | $ | 3.22       |         |  | $ | 2.87       |   |  | $    | 2.88       |   |  | $ | 2.56       |  
|Funds from Operations available to unitholders
    plus assumed conversions per unit(4) |  | $                                            | 2.80       |   |      | $ | 3.18       |         |  | $ | 2.83       |   |  | $    | 2.82       |   |  | $ | 2.52       |  
|Cash distributions declared per Unit                                                    |  | $                                            | 2.00       |   |      | $ | 2.00       |         |  | $ | 1.90       |   |  | $    | 1.74       |   |  | $ | 1.58       |  
|Balance Sheet Data (at end of year):                                                    |  |                                              |            |   |      |   |            |         |  |   |            |   |  |      |            |   |  |   |            |  
|Total assets                                                                            |  | $                                            | 24,189,010 |   |      | $ | 25,246,783 |         |  | $ | 25,808,422 |   |  | $    | 18,794,253 |   |  | $ | 14,046,058 |  
|Mortgage debt net of any discounts and premiums                                         |  | $                                            | 2,315,889  |   |      | $ | 2,507,890  |         |  | $ | 2,650,338  |   |  | $    | 2,915,801  |   |  | $ | 1,743,871  |  
|Unsecured notes net of any premiums and discounts                                       |  | $                                            | 8,828,912  |   |      | $ | 9,057,651  |         |  | $ | 9,093,987  |   |  | $    | 5,836,193  |   |  | $ | 3,655,047  |  
|Line of Credit                                                                          |  | $                                            | 334,000    |   |      | $ | 205,700    |         |  | $ | 244,300    |   |  | $    | 51,000     |   |  | $ | 453,000    |  
|Mandatorily Redeemable Preferred Units                                                  |  | $                                            | 299,500    |   |      | $ | 299,500    |         |  | $ | 299,500    |   |  | $    | 300,000    |   |  | $ | 300,000    |  
|Other Data (at end of year):                                                            |  |                                              |            |   |      |   |            |         |  |   |            |   |  |      |            |   |  |   |            |  
|Number of Office Properties                                                             |  |                                              | 684        |   |      |   | 734        |         |  |   | 774        |   |  |      | 381        |   |  |   | 294        |  
|Rentable square feet of Office Properties
    (in millions)                             |  |                                              | 122.3      |   |      |   | 125.7      |         |  |   | 128.2      |   |  |      | 99.0       |   |  |   | 77.0       |  
|Occupancy of Office Properties                                                          |  |                                              | 86.3       | % |      |   | 88.6       | %       |  |   | 91.8       | % |  |      | 94.6       | % |  |   | 93.7       | %
|Number of Industrial Properties                                                         |  |                                              | 75         |   |      |   | 77         |         |  |   | 79         |   |  |      |           |   |  |   |           |  
|Rentable square feet of Industrial Properties (in
    millions)                         |  |                                              | 5.8        |   |      |   | 6.0        |         |  |   | 6.0        |   |  |      |           |   |  |   |           |  
|Occupancy of Industrial Properties                                                      |  |                                              | 86.6       | % |      |   | 89.3       | %       |  |   | 92.8       | % |  |      |           |   |  |   |           |  



---



|    |                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On July 2, 2001, we completed our
    acquisition by merger of Spieker Properties, L.P. (Spieker
    Partnership) at a cost of approximately $7.2 billion.
    As a result of the Spieker Partnership merger, we

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##### Table of Contents



|    |                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | acquired an interest in 391 office
    properties containing approximately 28.3 million square
    feet and 98 industrial properties containing approximately
    10.1 million square feet.                                                                                                                                                   
|   
|(2) | On June 19, 2000, we completed our
    acquisition by merger of Cornerstone Properties Limited
    Partnership (Cornerstone Partnership) at a cost of
    approximately $4.5 billion. As a result of the Cornerstone
    Partnership merger, we acquired an interest in 82 properties
    containing approximately 18.9 million square feet.
|   
|(3) | These amounts are from continuing and
    discontinued operations and our share of unconsolidated joint
    ventures.                                                                                                                                                                                                                         
|   
|(4) | Refer to Item 7. Managements
    Discussion and Analysis of Financial Condition  Funds
    from Operations for information regarding why we present funds
    from operations and for a reconciliation of this non-GAAP
    financial measure to net income.                                                                                
|   
|(5) | Calculated as property operating revenue less
    property operating expense from continuing operations and
    discontinued operations. For more information, refer to
    Item 8. Financial Statements and Supplementary
    Data  Note 20  Segment Information.                                                                          




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

Overview

The following discussion and analysis is based
primarily on the consolidated financial statements of EOP
Operating Limited Partnership for the years presented and should
be read together with the notes thereto contained in this
Form 10-K. Terms employed herein as defined terms, but
without definition, have the meanings set forth in the notes to
the financial statements (See Item 8. Financial Statements
and Supplementary Data).

Executive Summary

Equity Office is the largest office REIT and
publicly held owner of Office Properties in the nation based on
market capitalization and square footage. We receive our revenue
primarily from rental revenues generated by leases for our
office space. The key factors that affect our business and
financial results are the following:



| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| |  | the current economic environment, including its
    effect on white-collar job growth in markets in which we have a
    presence;
|
| |  | the occupancy rates of our Office Properties;                                                                                    
|
| |  | rental rates on new Office Property leases;                                                                                      
|
| |  | tenant improvement and leasing costs incurred to
    retain and obtain tenants;                                                  
|
| |  | the extent of early lease terminations and any
    lease termination fees;                                                       
|
| |  | operating expenses; and                                                                                                          
|
| |  | the extent of any dispositions and acquisitions
    of Office Properties.                                                        

2003 was the third consecutive year of economic
slowdown marked by slow employment growth and the highest office
vacancy in the United States in over 10 years. The poor
economic environment and weak office markets adversely impacted
our financial results. Our overall office occupancy has declined
from 88.6% at December 31, 2002 to 86.3% at
December 31, 2003. This was due to early lease
terminations, which totaled approximately 5.4 million
square feet and equated to approximately 4.4% of occupancy lost
in our office portfolio. Market rental rates have continued to
decline during the last two years and have significantly
declined from their peak levels. Tenant improvement and leasing
costs have increased dramatically due to the competitive market
conditions for new leases. During 2003, we took advantage of
favorable market conditions for property sales by disposing of
approximately $933.1 million in non-core assets. In
addition, we entered into joint ventures and sold a 75% to 80%
interest in 13 Office Properties for approximately
$596.5 million. We

20



---



##### Table of Contents



used the proceeds from these asset sales to pay
down debt, redeem preferred units, acquire strategic assets in
core markets, partially fund distributions to unitholders and
repurchase Units.


On a macroeconomic level, we see office markets
beginning to recover and a minimal new supply of space in most
of our core markets. We expect net absorption of 25 to
30 million square feet in our top 20 markets in 2004.
We anticipate annual growth in the gross domestic product in the
range of 4% to 4.5% and office job growth of approximately 2.5%
which we believe will lead to an increase in our occupancy
level. Any changes in these assumptions could impact our
financial results.

As a result of the successful implementation of
our new operating model, we enter 2004 with a more efficient
operating platform. We intend to continue to refine our
operating model in an effort to obtain additional efficiencies
while improving customer service. Over the last two quarters,
our occupancy has been stable at approximately 86% and we expect
our average occupancy to increase approximately 1% to 2% during
2004. Although market rental rates have begun to stabilize in
many of our markets, the roll down of rents on our expiring
leases (assuming market rental rates do not recover from their
existing levels) will continue to adversely impact our rental
revenues, net income and funds from operations for the
foreseeable future. We expect the cost to obtain and keep
tenants, such as tenant improvements, leasing commissions, free
rent and other concessions to approximate 2003 levels during
2004. As part of our capital allocation strategy of taking
advantage of favorable market conditions to exit non-core
markets, we expect to be net sellers of real estate again in
2004, which will further reduce our income from continuing
operations and funds from operations, and may also result in
gains or losses on sales of properties and potential impairment
charges.

The remaining portion of our Managements
Discussion and Analysis of Financial Condition and Results of
Operations will help you understand:



| |   |                                                            
| | - | -----------------------------------------------------------
| |  | the key transactions that we completed during the
    year;
|
| |  | our critical accounting policies and estimates;            
|
| |  | our results of operations for the last three
    years;    
|
| |  | our liquidity and capital resources; and                   
|
| |  | our funds from operations.                                 

Key Transactions in 2003

During 2003, we completed the following key
transactions:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we disposed of 53 office properties, two
    industrial properties and four vacant land parcels in various
    transactions to unaffiliated parties for approximately
    $933.1 million. The sold office properties consisted of
    approximately 5,182,707 square feet and 32 residential
    units, and the industrial properties consisted of approximately
    216,900 square feet. With these transactions, we exited the
    following markets: Salt Lake City, UT; Riverside, CA;
    Fort Worth, TX; Charlotte, NC; and San Antonio, TX;
|
| |  | we sold partial interests in 13 Office Properties
    consisting of approximately 3,284,431 square feet for
    approximately $596.5 million;                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | we acquired two Office Properties for
    approximately $183.2 million consisting of approximately
    829,293 square feet;                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | we placed into service four developments
    consisting of five buildings and approximately
    1,218,215 square feet;                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | we entered into $500 million of
    forward-starting interest rate swaps;                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | we repaid $400 million of unsecured notes
    that matured in November 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | we issued $500 million of unsecured notes
    due January 2013 at an effective annual interest rate of 5.98%
    and used a portion of the net proceeds to repay
    $300 million of unsecured notes that matured in February
    2003;                                                                                                                                                                                                                                                                                                           

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we obtained a new three-year $1.0 billion
    revolving credit facility in May 2003;                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | we obtained a $1.0 billion 364-day credit
    facility in December 2003;                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Equity Office announced the redemption of, and
    subsequently redeemed in 2004, 4,562,900 outstanding 8 5/8%
    Series C Cumulative Redeemable Preferred Shares of
    Beneficial Interest for approximately $114.6 million, which
    included approximately $0.6 million of accrued
    distributions. In connection with such redemption, we redeemed
    all of the Series C Preferred Units from Equity Office;                                               
|
| |  | Equity Office redeemed the 7.875% Series E
    Cumulative Redeemable Preferred Shares for approximately
    $151.9 million, which included approximately
    $1.9 million of accrued distributions. In connection with
    such redemption, we redeemed all of the Series E Preferred
    Units from Equity Office;                                                                                                                                                   
|
| |  | Equity Office redeemed the 8.00% Series F
    Cumulative Redeemable Preferred Shares for approximately
    $100.0 million. In connection with such redemption, we
    redeemed all of the Series F Preferred Units from Equity
    Office; and                                                                                                                                                                                                                        
|
| |  | Equity Office repurchased 14,236,400 Common
    Shares at an average price of $25.53 per share for a total
    of $363.5 million. In connection with the repurchases, we
    purchased from Equity Office and retired a corresponding number
    of Units for an aggregate purchase price equal to the aggregate
    purchase price for all Common Share repurchases. We also
    redeemed 240,240 Units directly from the holders for
    approximately $6.4 million.

Critical Accounting Policies and
Estimates

Our significant accounting policies are described
in Note 2 to the consolidated financial statements included
in Item 8 of this Form 10-K. We believe our most
critical accounting policies include allowance for doubtful
accounts, impairment of long-lived assets, depreciation and the
fair value of financial instruments including derivative
instruments, each of which we discuss below.



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

Rental revenue from our tenants is our principal
source of revenue and is recognized in accordance with GAAP
based on the contractual terms of the leases. We monitor the
collectibility of accounts receivable from our tenants on an
on-going basis. Based on this analysis, historical experiences
and the current economic environment, we establish provisions,
and maintain an allowance for doubtful accounts for estimated
losses resulting from the possible inability of our tenants to
make required rent payments to us. An allowance for doubtful
accounts is recorded during each period and the bad debt expense
is netted against rental revenue in our consolidated statements
of operations. The allowance for doubtful accounts, which
represents the cumulative allowances less write-offs of
uncollectible rent, is netted against tenant and other
receivables and deferred rent receivable on our consolidated
balance sheets.

As a result of the slow down in economic
activity, we have continued to experience uncollectible
receivables, although at lower levels than prior periods,
relating to tenants in bankruptcy or tenants experiencing
financial difficulty. Although our historical bad debt expense
has been based on the factors described above, if we incorrectly
estimate the required allowance for doubtful accounts, our
financial condition and results of operations could be adversely
affected. Below is our bad debt expense from continuing
operations for each of the three years in the period ended
December 31, 2003.

|                                                                    |  |                                  |           |   |      |   |           |      |  |   |           |  
|------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                    |  |                                 
|                                                                    |  | For the years ended December 31, |          
|                                                                    |  |                                  |          
|                                                                    |  | 2003                             |           |   | 2002 |   |           | 2001 | 
|                                                                    |  |                                  |           |   |      |   |           |      | 
|                                                                    |  |                                 
|                                                                    |  | (Dollars in thousands)           |          
|Bad debt expense                                                    |  | $                                | 12,592    |   |      | $ | 27,767    |      |  | $ | 24,653    |  
|                                                                    |  |                                  |           |   |      |   |           |      | 
|Property operating revenues                                         |  | $                                | 3,179,771 |   |      | $ | 3,343,859 |      |  | $ | 2,951,061 |  
|                                                                    |  |                                  |           |   |      |   |           |      | 
|Bad debt expense as a percentage of property
    operating revenues |  |                                  | 0.40      | % |      |   | 0.83      | %    |  |   | 0.84      | %
|                                                                    |  |                                  |           |   |      |   |           |      | 

22



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| |                                    
| | -----------------------------------
| | Impairment of Long-Lived
    Assets

We review our long-lived assets for potential
impairment in accordance with FAS 144, Accounting for the
Impairment and Disposal of Long-Lived Assets. Under
FAS 144, an impairment loss must be recognized when the
carrying value of a long lived asset is not recoverable. The
carrying amount of a long-lived asset is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to
result from the use and eventual disposition of the asset. If it
is determined that a permanent impairment of a long-lived asset
has occurred, the carrying value of the asset is reduced to its
fair value and an impairment loss is recognized for the
difference between the carrying value and the fair value.

Our estimate of the expected future cash flows
used in testing for impairment is highly subjective and based on
among other things, our estimates regarding current and future
market conditions, rental rates, occupancy levels, costs of
tenant improvements, leasing commissions and other tenant
concessions, and assumptions regarding the residual value of our
Properties at the end our anticipated holding period. These
assumptions could differ materially from actual results in
future periods. Since FAS 144 provides that the future cash
flows used in this analysis be considered on an undiscounted
basis, our historically established intent to hold properties
over the long term directly decreases the likelihood of
recording an impairment loss. If our strategy changes or if
market conditions otherwise dictate an earlier sale date, an
impairment loss could be recognized and such loss could be
material.

During 2003, we recognized an impairment of
approximately $7.5 million on an Office Property (See
Item 8. Financial Statements and Supplementary Data
Note 8  Impairment). There were no impairments
in 2002. During 2001, we recognized an impairment of
approximately $2.5 million on an investment in an
unconsolidated joint venture that was held for sale.



| |             
| | ------------
| | Depreciation

Statement of Financial Accounting Standards
No. 141 (SFAS No. 141) Business
Combinationswas effective July 1, 2001. Depreciation
expense on Properties acquired prior to July 1, 2001 was
computed using the straight-line method based on an estimated
useful life of 40 years. A significant portion of the
acquisition cost of each property was allocated to building
(usually 85% to 90% unless the property was subject to a ground
lease in which case 100% of the acquisition cost was allocated
to building). Depreciation expense on properties acquired
subsequent to the effective date of SFAS No. 141 is
based on the allocation of the acquisition cost to land,
building, tenant improvements and intangibles and the
determination of their useful lives are based on
managements estimates. If we do not appropriately allocate
to these components or we incorrectly estimate the useful lives
of these components, our computation of depreciation and
amortization expense may not appropriately reflect the actual
impact of these costs over future periods, which will affect net
income.



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

We are required to determine periodically the
fair value of our mortgage debt and unsecured notes for
disclosure purposes. In determining the fair value of these
financial instruments, we use internally developed models that
are based on current market conditions. For example, in
determining the fair value of our mortgage debt and unsecured
notes, we discount the spread between the future contractual
interest payments and future interest payments based on a
current market rate. In determining the current market rate, we
add a credit spread to the quoted yields on federal government
debt securities with similar maturity dates to our own debt. The
credit spread estimate is based on our historical experience in
obtaining either secured or unsecured financing and also is
affected by current market conditions.

We are also required periodically to adjust the
carrying values of interest rate swaps, as well as the
underlying hedged liability, if applicable, to its fair value.
In determining the fair value of interest rate swaps, we rely on
third party quotations to adjust these instruments, as well as
the hedged liability, if applicable, to its fair value.
Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives
either will be offset against the change in fair value of the
hedged assets, liabilities, or firm commitments through earnings
or

23



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##### Table of Contents



recognized in other comprehensive income until
the hedged item is recognized in earnings. The ineffective
portion of a derivatives change in fair value will be
immediately recognized in earnings.


Because our valuations of our financial
instruments are based on these types of estimates, the fair
value of our financial instruments may change if our estimates
are inaccurate. For the effect of hypothetical changes in market
rates of interest on interest expense for variable rate debt,
the fair value of total outstanding debt and our
forward-starting interest rate swaps, see the Market Risk
section.

Accounting Policy Adopted in 2003

Effective January 1, 2003, we adopted
Statement of Financial Accounting Standards No. 123
(Statement 123) Accounting for Stock Based
Compensation,which requires a fair value based accounting
method for determining compensation expense associated with the
issuance of share options and other equity awards. See
Item 8. Financial Statements and Supplementary Data
Note 2  Summary of Significant Accounting
Policies for more information.

Accounting Policies Adopted in 2002

Effective January 1, 2002, we adopted the
provisions of Statement of Financial Accounting Standards
No. 144 (SFAS No. 144) Accounting
for the Impairment or Disposal of Long-Lived Assets,which
is effective for financial statements issued for fiscal years
beginning after December 15, 2001. SFAS No. 144
addresses the financial accounting and reporting for the
impairment or disposal of long-lived assets.
SFAS No. 144 extends the reporting requirements of
discontinued operations to include components of an entity that
have either been disposed of or are classified as held for sale.
The operating results of the properties sold in 2003 and 2002
have been classified as discontinued operations in the
consolidated statements of operations for each of the three
years in the period ended December 31, 2003 included herein.

In accordance with Statement of Financial
Accounting Standards No. 145 (SFAS
No. 145), Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13,
and Technical Corrections,effective for financial
statements issued for fiscal years beginning after May 15,
2002, any gain or loss on extinguishment of debt that was
classified as an extraordinary item in prior periods shall be
reclassified. As a result of the adoption, an extraordinary loss
of approximately $9.4 million in the year ended
December 31, 2001 was reclassified to amortization of
deferred financing costs and prepayment expenses.

Impact of New Accounting Standards

See Item 8. Financial Statements and
Supplementary Data Note 3  Impact of New
Accounting Standards for the impact of new accounting standards
on our financial condition and results of operations.

Results of Operations



| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | Trends in Occupancy, Rental Rates, Lease
    Terminations, Tenant Improvements and Leasing Costs and
    Uncollectible Receivables

We receive our revenue primarily from rental
revenue generated by leases for office and industrial space for
which we are the lessor. Our revenues also include
reimbursements from our tenants for certain operating costs and
revenues from parking facilities. As a result of the slowdown in
economic activity and decline in white-collar employment, we
have experienced a decrease both in our occupancy rates and
overall market rental rates and an increase in costs to re-lease
space. Below is a summary of our leasing activity for tenants
taking occupancy for the periods presented for our Office
Properties. Our 10 largest markets in terms of property net
operating income from continuing operations in order from
greatest to least are San Francisco, Boston, San Jose, Seattle,
New York, Chicago, Washington D.C., Los Angeles, Atlanta and
Orange County.

24



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##### Table of Contents



These markets accounted for approximately 78.4%
of our property net operating income from continuing operations
in the fourth quarter of 2003.


|                        |                                                                                                               |                     |   |            |      |  |   |            |  
|----------------------- | ------------------------------------------------------------------------------------------------------------- | ------------------- | - | ---------- | ---- |  | - | ---------- | -
|                        |                                                                                                               |                    
|                        |                                                                                                               | For the years ended |  
|                        |                                                                                                               | December 31,        |  
|                        |                                                                                                               |                     |  
|                        |                                                                                                               | 2003                |   |            | 2002 | 
|                        |                                                                                                               |                     |   |            |      | 
|Office Property Data:   |                                                                                                               |                     |   |            |      |  |   |           
|10 Largest Markets:     |                                                                                                               |                     |   |            |      |  |   |           
|                        | Portion of total office portfolio based on square
    feet at end of year                                     |                     |   | 69.4       | %    |  |   | 68.1       | %
|                        | Occupancy at end of year                                                                                      |                     |   | 86.1       | %    |  |   | 88.8       | %
|                        | Gross square footage for tenants whose lease term
    commenced during the year                               |                     |   | 15,218,840 |      |  |   | 13,582,766 |  
|                        | Weighted average annual rent per square foot for
    tenants whose lease term commenced during the year(a)(b) |                     | $ | 27.93      |      |  | $ | 31.54      |  
|                        | Gross square footage for expiring and terminated
    leases during the year                                   |                     |   | 15,932,288 |      |  |   | 16,308,269 |  
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the year(a)        |                     | $ | 31.12      |      |  | $ | 31.19      |  
|Total Office Portfolio: |                                                                                                               |                     |   |            |      |  |   |           
|                        | Portion of total portfolio based on square feet
    at end of year                                            |                     |   | 100.0      | %    |  |   | 100.0      | %
|                        | Occupancy at end of year                                                                                      |                     |   | 86.3       | %    |  |   | 88.6       | %
|                        | Gross square footage for tenants whose lease term
    commenced during the year                               |                     |   | 22,684,488 |      |  |   | 20,620,427 |  
|                        | Weighted average annual rent per square foot for
    tenants whose lease term commenced during the year(a)(b) |                     | $ | 25.68      |      |  | $ | 28.48      |  
|                        | Gross square footage for expiring and terminated
    leases during the year                                   |                     |   | 23,976,592 |      |  |   | 23,711,452 |  
|                        | Weighted average annual rent per square foot for
    expiring and terminated leases during the year(a)        |                     | $ | 28.14      |      |  | $ | 28.61      |  



---



|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | These weighted average rental rates are based on
    the average annual base rent per square foot over the term of
    each of the leases and the current estimated tenant
    reimbursements, if any.                                                                                                
|   
|(b) | Weighted average annual rent per square foot for
    new office leases for which the tenants have occupied the space
    during the relevant period may lag behind market because leasing
    decisions typically are made anywhere from one month to 12 or
    more months prior to taking occupancy.

A significant contributor to the decline in
occupancy for our Office Properties since the beginning of 2002
has been early lease terminations. From January 1, 2002
through December 31, 2003, early lease terminations
affected approximately 11.2 million square feet and we
received lease termination fees of approximately
$219.8 million. Although lease termination fees increase
current period income, future rental income will most likely be
reduced because, given the decline in market rents, it is
unlikely we will collect the full contracted amount which had
been payable under the terminated leases from new tenants who
may occupy the vacated space. We will also often incur downtime
and additional costs to relet the space. Although there is no
way of predicting future lease terminations, we currently
anticipate that lease termination fees will be relatively stable
in 2004 as compared to 2003 and the affected square feet should
be less in 2004 than 2003. The amount of lease termination fees
are not necessarily proportionate to the square footage of
leases being terminated. Although occupancy has declined since
the beginning of 2002, it has stabilized over the last two
quarters at approximately 86% and given the current rate of new
leasing activity, we expect our average occupancy to increase
approximately 1% to 2% in 2004. We estimate that for each 1%
change in the average occupancy of our Office Properties there
is a corresponding $30 million to $35 million change
in our net operating income.

25



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##### Table of Contents



As indicated in the table above, due to the weak
economy, there has been a general decline in market rental rates
for Office Properties in 2002 and 2003 as reflected by the
difference between the weighted average annual rent per square
foot for expiring and terminated leases compared to the weighted
average annual rent per square foot for tenants whose lease term
commenced during the same period. This roll down in rents
adversely affected our rental revenues in 2002 and 2003 and
unless the economy recovers and market rental rates increase
substantially from their current levels, is expected to
adversely affect our rental revenues in subsequent periods as we
enter into new leases. The actual rental rates at which
available space will be relet will depend on prevailing market
factors at the time. We currently estimate that the average
annual total rent of approximately $30.43 per square foot as of
December 31, 2003 for all our Office Properties (See
Item 2. Properties) is approximately $3.50 to $4.00 per
square foot above market rent and expect this trend to continue
in 2004. As of December 31, 2003, approximately
65.8 million square feet of occupied space (approximately
62.4% of the total occupied square feet) is scheduled to expire
through 2008. The square footage of leases scheduled to expire
in each of the next five years and the average annual rent per
square foot for these leases is presented below.

|              |  |                    |            |  |                         |   |       | 
|------------- |  | ------------------ | ---------- |  | ----------------------- | - | ----- | 
|              |  | Square Feet of     |            |  | Annualized Rent per     |  
|Year          |  | Expiring Leases(a) |            |  | Occupied Square Foot(b) |  
|              |  |                    |            |  |                         |  
|2004          |  |                    | 12,187,759 |  |                         | $ | 27.70 | 
|2005          |  |                    | 13,580,501 |  |                         | $ | 30.55 | 
|2006          |  |                    | 13,984,235 |  |                         | $ | 29.52 | 
|2007          |  |                    | 12,399,315 |  |                         | $ | 29.23 | 
|2008          |  |                    | 13,647,832 |  |                         | $ | 27.86 | 
|              |  |                    |            |  |                         |  
|Total/Average |  |                    | 65,799,642 |  |                         | $ | 29.00 | 
|              |  |                    |            |  |                         |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Based on the contractual termination date of the
    lease without regard to any early lease termination and/or
    renewal options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(b) | Based on annualized rent. Annualized rent is the
    monthly contractual rent as of the reporting date, or if the
    current rent payable is $0 then the first monthly rent payment
    due, under existing leases as of December 31, 2003
    multiplied by 12 months (Annualized Rent). This
    amount reflects total base rent and estimated expense
    reimbursements from tenants as of December 31, 2003 without
    regard to any rent abatements and contractual increases or
    decreases in rent subsequent to December 31, 2003. Total
    rent abatements for leases in place as of December 31,
    2003, for the period from January 1, 2004 to
    December 31, 2004 are approximately $38.2 million. We
    believe Annualized Rent is a useful measure because this
    information can be used for comparison to current market rents
    as published by various third party sources.

During 2003, we experienced material increases in
tenant improvement and leasing costs as a result of competitive
market conditions for new and renewal leases. The weighted
average tenant improvement and leasing cost per square foot
incurred for office leases which commenced during 2003 was
approximately $19.05, a substantial increase compared to the
cost of $13.59 per square foot incurred in 2002. These increases
in tenant improvement and leasing costs resulted in a decrease
in net effective rents (contract rents reduced by tenant
improvement costs, leasing commissions and any free rent
periods) for lease renewals and retenanted properties. We expect
tenant improvement and leasing costs to be approximately $18 to
$20 per square foot in 2004.

We have also continued to experience
uncollectible receivables, although at lower levels than prior
periods, relating to tenants in bankruptcy or tenants
experiencing financial difficulty. Bad debt expense relating to
uncollectible receivables (from continuing operations) was
approximately $12.6 million, $27.8 million and
$24.7 million in 2003, 2002 and 2001, respectively. We
anticipate that the level of uncollectible receivables in 2004
will be similar to 2003. Although we have collateral from many
of our tenants, mostly in the form of security deposits and
letters of credit, such collateral is generally not sufficient
to cover the full cost of releasing the space and additional
write-offs of tenant receivables may occur.

26



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##### Table of Contents





| |                                          
| | -----------------------------------------
| | Trends in Property Operating
    Expenses

In 2001, we initiated a comprehensive analysis of
our operating structure with the help of a management consulting
firm and our employees. The goal of the analysis was to
streamline operations, improve customer service, reduce lease
cycle time, increase occupancy, retain tenants and reduce
operating expenses. The analysis resulted in a significant
reengineering effort called EOPlus. As part of this effort, many
of the activities that occurred at the property level have been
centralized into regional offices with a view towards allowing
property managers to spend more time building customer
relationships. The centralization of each regions
operations is designed to provide higher service to our
customers at a lower cost. By consolidating our property
management offices, we made available for leasing almost 400,000
square feet of office space in 2003. As of December 31,
2003, we have approximately 15% fewer employees at the property
level than at the end of 2001. We have also created a central
purchasing function to review and analyze our goods and services
expenditures. The goal of the central purchasing function is to
obtain preferred pricing, reduce the number of our vendors and
reduce the number of invoices we process.

Period-to-Period Comparisons

Acquisition and Disposition
Activity

Below is a summary of our acquisition and
disposition activity since January 1, 2002. The buildings
and total square feet shown include properties we own in joint
ventures with other partners that we either consolidate or
account for under the equity method. The total square feet of
these unconsolidated properties is included in the table.
Excluding the joint venture partners share of the square
feet of the office properties, we effectively owned
113,580,631 square feet of office space as of
December 31, 2003.

|                        |                                  |                   |     |       |                       |  |             |            |       |  |             |    |   |  |           |          |  
|----------------------- | -------------------------------- | ----------------- | --- | ----- | --------------------- |  | ----------- | ---------- | ----- |  | ----------- | -- | - |  | --------- | -------- | -
|                        |                                  |                   |     |      
|                        |                                  | Office Properties |     |       | Industrial Properties | 
|                        |                                  |                   |     |       |                       | 
|                        |                                  |                   |     | Total |                       |  |             |            | Total | 
|                        |                                  | Buildings         |     |       | Square Feet           |  |             | Buildings  |       |  | Square Feet |   
|                        |                                  |                   |     |       |                       |  |             |            |       |  |             |   
|Properties owned as of: |                                  |                   |     |       |                       |  |             |            |       |  |             |    |   |  |           |         
|January 1, 2002         |                                  |                   | 774 |       |                       |  | 128,233,987 |            |       |  | 79          |    |   |  | 6,044,831 |         
|                        | Acquisitions                     |                   |     | 2     |                       |  |             | 260,372    |       |  |             |   |   |  |           |         |  
|                        | Developments placed in service   |                   |     | 3     |                       |  |             | 330,646    |       |  |             |   |   |  |           |         |  
|                        | Dispositions                     |                   |     | (45   | )                     |  |             | (3,113,189 | )     |  |             | (2 | ) |  |           | (77,072  | )
|                        | Building remeasurements          |                   |     |      |                       |  |             | 13,583     |       |  |             |   |   |  |           |         |  
|                        |                                  |                   |     |       |                       |  |             |            |       |  |             |   
|December 31, 2002       |                                  |                   | 734 |       |                       |  | 125,725,399 |            |       |  | 77          |    |   |  | 5,967,759 |         
|                        | Acquisitions                     |                   |     | 2     |                       |  |             | 829,293    |       |  |             |   |   |  |           |         |  
|                        | Developments placed in service   |                   |     | 5     |                       |  |             | 1,218,215  |       |  |             |   |   |  |           |         |  
|                        | Dispositions(a)                  |                   |     | (53   | )                     |  |             | (5,182,707 | )     |  |             | (2 | ) |  |           | (216,900 | )
|                        | Property taken out of service(b) |                   |     | (4    | )                     |  |             | (450,548   | )     |  |             |   |   |  |           |         |  
|                        | Building remeasurements          |                   |     |      |                       |  |             | 115,273    |       |  |             |   |   |  |           |         |  
|                        |                                  |                   |     |       |                       |  |             |            |       |  |             |   
|December 31, 2003       |                                  |                   | 684 |       |                       |  | 122,254,925 |            |       |  | 75          |    |   |  | 5,750,859 |         
|                        |                                  |                   |     |       |                       |  |             |            |       |  |             |   



---



|    |  |                                                                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Excludes partial sales of real estate because the
    properties are still included in our portfolio.                                                                          
|   
|(b) |  | Cambridge Science Center (f/k/a Riverview I) is
    now considered a development and 175 Wyman has been taken out of
    service and is being held for potential redevelopment.

The financial data presented in the consolidated
statements of operations show changes in revenues and expenses
from period-to-period. We do not believe our period-to-period
financial data are necessarily comparable because we acquire and
dispose of properties on an ongoing basis. The following tables
show results attributable to the Properties that were held
during both periods being compared (the Core
Portfolio) and the changes in our aggregate total
portfolio of Properties (the Total Portfolio).

27



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##### Table of Contents



Included in property operating revenues are
rental revenue, tenant reimbursements, parking and other.
Included in property operating expenses are insurance, repairs
and maintenance and property operating expenses.

Comparison of the year ended December 31,
2003 to the year ended December 31, 2002

The table below represents selected operating
information for the Total Portfolio and for the core portfolio
consisting of 647 consolidated Office Properties, 75 Industrial
Properties and 22 unconsolidated joint venture Properties
acquired or placed in service on or prior to January 1,
2002. The core portfolio results below include the results of
the 13 Office Properties in which we sold partial interests and
entered into joint venture agreements during the fourth quarter
2003 because these properties were sold on December 30,
2003.

|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |           |           |   |          |          |          |   |       |      |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | --------------------------- | --------- | --------- | -------------- | - | --------- | --------- | --------- | - | -------- | -------- | -------- | ---- | ----- | ---- | ----- | - | --------- | --------- | --------- | - | --------- | --------- | --------- | - | -------- | -------- | -------- | - | ----- | ---- | ----- | -
|                                                                                                                                                                            |                |                             |           |          
|                                                                                                                                                                            |                | Total Portfolio             |           |           | Core Portfolio |  
|                                                                                                                                                                            |                |                             |           |           |                |  
|                                                                                                                                                                            |                |                             |           |           |                |   |           |          
|                                                                                                                                                                            |                |                             |           | Change    |                |   |           |           | Change    |  
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |  
|                                                                                                                                                                            |                | 2003                        |           |           | 2002           |   |           | $         |           |   | %        |          |          | 2003 |       |      | 2002  |   |           | $         |           |   | %         |          
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|(Dollars in thousands)                                                                                                                                                      |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |           |           |   |          |          |          |   |       |     
|Property operating revenues                                                                                                                                                 |                | $                           | 3,179,771 |           |                | $ | 3,343,859 |           |           | $ | (164,088 | )        |          |      | (4.9  | )%   |       | $ | 3,138,385 |           |           | $ | 3,323,859 |           |           | $ | (185,474 | )        |          |   | (5.6  | )%  
|Fee income                                                                                                                                                                  |                |                             | 15,861    |           |                |   | 15,907    |           |           |   | (46      | )        |          |      | (0.3  | )    |       |   |          |           |           |   |          |           |           |   |         |          |          |   |      |     
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|                                                                                                                                                                            | Total revenues |                             |           | 3,195,632 |                |   |           | 3,359,766 |           |   |          | (164,134 | )        |      |       | (4.9 | )     |   |           | 3,138,385 |           |   |           | 3,323,859 |           |   |          | (185,474 | )        |   |       | (5.6 | )    
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Depreciation and amortization                                                                                                                                               |                |                             | 715,548   |           |                |   | 662,875   |           |           |   | 52,673   |          |          |      | 7.9   |      |       |   | 689,611   |           |           |   | 648,531   |           |           |   | 41,080   |          |          |   | 6.3   |     
|Real estate taxes                                                                                                                                                           |                |                             | 351,537   |           |                |   | 360,488   |           |           |   | (8,951   | )        |          |      | (2.5  | )    |       |   | 344,257   |           |           |   | 356,730   |           |           |   | (12,473  | )        |          |   | (3.5  | )   
|Property operating expenses                                                                                                                                                 |                |                             | 775,042   |           |                |   | 788,207   |           |           |   | (13,165  | )        |          |      | (1.7  | )    |       |   | 759,568   |           |           |   | 782,195   |           |           |   | (22,627  | )        |          |   | (2.9  | )   
|Ground rent                                                                                                                                                                 |                |                             | 20,287    |           |                |   | 20,325    |           |           |   | (38      | )        |          |      | (0.2  | )    |       |   | 18,624    |           |           |   | 20,075    |           |           |   | (1,451   | )        |          |   | (7.2  | )   
|General and administrative(a)                                                                                                                                               |                |                             | 62,479    |           |                |   | 65,790    |           |           |   | (3,311   | )        |          |      | (5.0  | )    |       |   |          |           |           |   |          |           |           |   |         |          |          |   |      |     
|Impairment of long-lived asset                                                                                                                                              |                |                             | 7,500     |           |                |   |          |           |           |   | 7,500    |          |          |      |      |      |       |   | 7,500     |           |           |   |          |           |           |   | 7,500    |          |          |   |      |     
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|                                                                                                                                                                            | Total expenses |                             |           | 1,932,393 |                |   |           | 1,897,685 |           |   |          | 34,708   |          |      |       | 1.8  |       |   |           | 1,819,560 |           |   |           | 1,807,531 |           |   |          | 12,029   |          |   |       | 0.7  |      
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|                                                                                                                                                                            |                | Operating income            |           |           | 1,263,239      |   |           |           | 1,462,081 |   |          |          | (198,842 | )    |       |      | (13.6 | ) |           |           | 1,318,825 |   |           |           | 1,516,328 |   |          |          | (197,503 | ) |       |      | (13.0 | )
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Interest/ dividend income                                                                                                                                                   |                |                             | 12,583    |           |                |   | 22,148    |           |           |   | (9,565   | )        |          |      | (43.2 | )    |       |   | 3,839     |           |           |   | 3,771     |           |           |   | 68       |          |          |   | 1.8   |     
|Realized gain on sale of marketable securities                                                                                                                              |                |                             | 9,286     |           |                |   |          |           |           |   | 9,286    |          |          |      |      |      |       |   |          |           |           |   |          |           |           |   |         |          |          |   |      |     
|Interest expense(b)                                                                                                                                                         |                |                             | (827,335  | )         |                |   | (814,645  | )         |           |   | (12,690  | )        |          |      | 1.6   |      |       |   | (187,259  | )         |           |   | (198,110  | )         |           |   | 10,851   |          |          |   | (5.5  | )   
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|                                                                                                                                                                            |                | Total other income/ expense |           |           | (805,466       | ) |           |           | (792,497  | ) |          |          | (12,969  | )    |       |      | 1.6   |   |           |           | (183,420  | ) |           |           | (194,339  | ) |          |          | 10,919   |   |       |      | (5.6  | )
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and net gain on partial sales of real estate |                |                             | 457,773   |           |                |   | 669,584   |           |           |   | (211,811 | )        |          |      | (31.6 | )    |       |   | 1,135,405 |           |           |   | 1,321,989 |           |           |   | (186,584 | )        |          |   | (14.1 | )   
|Income taxes                                                                                                                                                                |                |                             | (5,373    | )         |                |   | (9,126    | )         |           |   | 3,753    |          |          |      | (41.1 | )    |       |   | (911      | )         |           |   | (1,999    | )         |           |   | 1,088    |          |          |   | (54.4 | )   
|Minority interests                                                                                                                                                          |                |                             | (8,116    | )         |                |   | (7,200    | )         |           |   | (916     | )        |          |      | 12.7  |      |       |   | (9,307    | )         |           |   | (7,253    | )         |           |   | (2,054   | )        |          |   | 28.3  |     
|Income from investments in unconsolidated joint
    ventures                                                                                                                |                |                             | 79,882    |           |                |   | 106,852   |           |           |   | (26,970  | )        |          |      | (25.2 | )    |       |   | 53,131    |           |           |   | 68,630    |           |           |   | (15,499  | )        |          |   | (22.6 | )   
|Net gain on partial sales of real estate                                                                                                                                    |                |                             | 99,110    |           |                |   |          |           |           |   | 99,110   |          |          |      |      |      |       |   | 99,110    |           |           |   |          |           |           |   | 99,110   |          |          |   |      |     
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Income from continuing operations                                                                                                                                           |                |                             | 623,276   |           |                |   | 760,110   |           |           |   | (136,834 | )        |          |      | (18.0 | )    |       |   | 1,277,428 |           |           |   | 1,381,367 |           |           |   | (103,939 | )        |          |   | (7.5  | )   
|Discontinued operations (including net gain on
    sales of real estate of $61,953 and $17,926, respectively)                                                               |                |                             | 105,938   |           |                |   | 99,310    |           |           |   | 6,628    |          |          |      | 6.7   |      |       |   |          |           |           |   |          |           |           |   |         |          |          |   |      |     
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Net income                                                                                                                                                                  |                | $                           | 729,214   |           |                | $ | 859,420   |           |           | $ | (130,206 | )        |          |      | (15.2 | )%   |       | $ | 1,277,428 |           |           | $ | 1,381,367 |           |           | $ | (103,939 | )        |          |   | (7.5  | )%  
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Property net operating income from continuing
    operations(c)                                                                                                             |                | $                           | 2,053,192 |           |                | $ | 2,195,164 |           |           | $ | (141,972 | )        |          |      | (6.5  | )%   |       | $ | 2,034,560 |           |           | $ | 2,184,934 |           |           | $ | (150,374 | )        |          |   | (6.9  | )%  
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Deferred rental revenue                                                                                                                                                     |                | $                           | 73,082    |           |                | $ | 67,412    |           |           | $ | 5,670    |          |          |      | 8.4   | %    |       | $ | 70,298    |           |           | $ | 66,451    |           |           | $ | 3,847    |          |          |   | 5.8   | %   
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          
|Lease termination fees                                                                                                                                                      |                | $                           | 62,578    |           |                | $ | 104,178   |           |           | $ | (41,600  | )        |          |      | (39.9 | )%   |       | $ | 62,110    |           |           | $ | 103,469   |           |           | $ | (41,359  | )        |          |   | (40.0 | )%  
|                                                                                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |          |          |      |       |      |       |   |           |           |           |   |           |          

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---



|    |  |                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate general and administrative expense is
    not allocated to the Core Portfolio because these expenses are
    not directly incurred in connection with any specific Property.                                                                                                
|   
|(b) |  | Interest expense (including amortization of
    deferred financing costs and prepayment expenses) for the core
    portfolio represents interest expense on property secured
    mortgage debt and does not include interest expense on the
    unsecured notes or the line of credit.
|   
|(c) |  | Represents segment data. See Item 8.
    Financial Statements and Supplementary Data
    Note 20  Segment Information.                                                                                                                                                               

Property Operating Revenues

The decrease in property operating revenues in
the Total Portfolio was primarily attributable to reduced
occupancy in the core portfolio from 91.8% at January 1,
2002 to 86.5% at December 31, 2003 and a decrease in lease
termination fees. A large portion of the decrease in occupancy
was due to early lease terminations. In addition to the decline
in occupancy, rental revenues declined as a result of decreased
average rental rates on new leases as compared to average rental
rates on expiring leases.

Depreciation and Amortization

Total Portfolio and core portfolio depreciation
and amortization expense increased from the prior period
primarily as a result of capital and tenant improvements made
since the beginning of the prior period and from an increase in
deferred leasing costs.

Real Estate Taxes

Real estate taxes decreased for the Total
Portfolio and core portfolio primarily due to a decrease in real
estate taxes in the California regions of approximately
$11.5 million and the Seattle region of approximately
$2.8 million, partially offset by an increase in real
estate taxes in the New York region of approximately
$6.3 million.

Property Operating Expenses

For the core portfolio, property operating
expenses decreased primarily as a result of lower utility
expense of approximately $13.8 million and lower insurance
expense of approximately $11.0 million. Insurance expense
decreased primarily as a result of changes in our insurance
program and favorable loss experience. In addition, repairs and
maintenance expense decreased by approximately $8.8 million
primarily due to lower occupancy and the renegotiation of
service contracts. Payroll expense decreased by approximately
$4.3 million due to staff reductions. These decreases in
property operating expenses were partially offset by increases
in property operating general and administrative expenses which
include legal, advertising, leasing and payroll costs and by
severance expense of approximately $5.4 million in 2003.

General and Administrative Expenses

We incurred approximately $4.2 million of
corporate level severance expense in 2003 compared to
$7.2 million in 2002. The severance expense consisted of
the accelerated vesting of share options and restricted shares
as well as cash payments.

Beginning in fiscal 2003, we reclassified
regional operating expenses and other costs directly associated
with property operations from general and administrative
expenses to property operating expenses. The regional offices
exist to provide oversight for the management and leasing of the
Properties. Accordingly, these expenses were classified as
property operating expenses and all prior periods have been
reclassified to provide for comparability. This reclassification
did not change the prior period results or partners
capital.

29



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##### Table of Contents



Impairment

During 2003, an Office Property was deemed to be
impaired due to an analysis of its future undiscounted cash
flows. As a result, we recognized a permanent impairment charge
of $7.5 million, which reduced the book value of the
property to its estimated fair value of $3.8 million.

Interest/ Dividend Income

Interest and dividend income decreased for the
Total Portfolio by approximately $9.6 million primarily as
a result of lower interest and dividends from various notes
receivable and investments, which either matured or were
redeemed during the period.

Realized Gain on Sale of Marketable Securities

During 2002, we entered into an early lease
termination agreement with a tenant that was scheduled to occupy
an entire building. As part of the consideration for the lease
termination, we received five million shares of common stock.
These securities were sold during the first quarter of 2003 at a
gain of approximately $8.1 million. The remaining realized
gain of approximately $1.2 million was due to the sale of
other securities.

Interest Expense

Interest expense for the Total Portfolio
increased primarily as a result of a $10.4 million decrease
of capitalized interest related to several developments that
were completed and placed into service. Interest expense for the
core portfolio decreased primarily as a result of mortgage debt
repayments.

Income Taxes

Income taxes for the Total Portfolio decreased
because in 2002 we incurred approximately $5.0 million of
income taxes as a result of a $40.0 million lease
termination. (See Income from Investment in Unconsolidated
Joint Ventures below).

Income from Investments in Unconsolidated Joint
Ventures

Income from investments in unconsolidated joint
ventures decreased for the Total Portfolio primarily due to a
decrease in lease termination fees from $46.4 million to
$3.7 million and a decrease in property operating revenues
at the core portfolio, partially offset by a $2.3 million
decrease in interest expense on variable rate mortgage debt at
the core portfolio and by a development property placed in
service in 2003. The decrease in property operating revenues at
the core portfolio was primarily attributable to reduced
occupancy and decreased average rental rates on new leases as
compared to average rental rates on expiring leases.

Net Gain on Partial Sales of Real Estate

The net gain in 2003 related to the partial sale
of our interests in 13 Office Properties. In accordance with
SFAS No. 144, the net income from these Properties,
which includes the net gain on sale, is not classified as
discontinued operations because we still maintain an on-going
involvement with the operation of these Properties.

Discontinued Operations

The increase in discontinued operations is a
result of a higher net gain on the sale of properties in 2003 as
compared to 2002, offset by the loss of net income due to the
sales. Discontinued operations in 2002 includes the net income
of properties sold in 2002 and in 2003 whereas the discontinued
operations in 2003 only includes the net income of properties
sold in 2003.

30



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##### Table of Contents



Comparison of the year ended December 31,
2002 to the year ended December 31, 2001

The table below represents selected operating
information for the Total Portfolio and for the core portfolio
consisting of 355 consolidated Office Properties and 23
unconsolidated joint venture Office Properties acquired or
placed in service on or prior to January 1, 2001.

|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |           |           |   |         |         |          |   |        |      |       |  
|--------------------------------------------------------------------------------------------------------------------------------- | -------------- | --------------------------- | --------- | --------- | -------------- | - | --------- | --------- | --------- | - | -------- | ------- | ------- | ---- | ------ | ---- | ---- | - | --------- | --------- | --------- | - | --------- | --------- | --------- | - | ------- | ------- | -------- | - | ------ | ---- | ----- | -
|                                                                                                                                  |                |                             |           |          
|                                                                                                                                  |                | Total Portfolio             |           |           | Core Portfolio |  
|                                                                                                                                  |                |                             |           |           |                |  
|                                                                                                                                  |                |                             |           |           |                |   |           |          
|                                                                                                                                  |                |                             |           | Change    |                |   |           |           | Change    |  
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |  
|                                                                                                                                  |                | 2002                        |           |           | 2001           |   |           | $         |           |   | %        |         |         | 2002 |        |      | 2001 |   |           | $         |           |   | %         |          
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|(Dollars in thousands)                                                                                                            |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |           |           |   |         |         |          |   |        |     
|Property operating revenues                                                                                                       |                | $                           | 3,343,859 |           |                | $ | 2,951,061 |           |           | $ | 392,798  |         |         |      | 13.3   | %    |      | $ | 2,508,762 |           |           | $ | 2,567,558 |           |           | $ | (58,796 | )       |          |   | (2.3   | )%  
|Fee income                                                                                                                        |                |                             | 15,907    |           |                |   | 15,085    |           |           |   | 822      |         |         |      | 5.4    |      |      |   |          |           |           |   |          |           |           |   |        |         |          |   |       |     
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|                                                                                                                                  | Total revenues |                             |           | 3,359,766 |                |   |           | 2,966,146 |           |   |          | 393,620 |         |      |        | 13.3 |      |   |           | 2,508,762 |           |   |           | 2,567,558 |           |   |         | (58,796 | )        |   |        | (2.3 | )    
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Depreciation and amortization                                                                                                     |                |                             | 662,875   |           |                |   | 553,328   |           |           |   | 109,547  |         |         |      | 19.8   |      |      |   | 507,556   |           |           |   | 490,125   |           |           |   | 17,431  |         |          |   | 3.6    |     
|Real estate taxes                                                                                                                 |                |                             | 360,488   |           |                |   | 331,182   |           |           |   | 29,306   |         |         |      | 8.8    |      |      |   | 303,730   |           |           |   | 298,532   |           |           |   | 5,198   |         |          |   | 1.7    |     
|Property operating expenses                                                                                                       |                |                             | 788,207   |           |                |   | 677,440   |           |           |   | 110,767  |         |         |      | 16.4   |      |      |   | 627,711   |           |           |   | 605,120   |           |           |   | 22,591  |         |          |   | 3.7    |     
|Ground rent                                                                                                                       |                |                             | 20,325    |           |                |   | 16,692    |           |           |   | 3,633    |         |         |      | 21.8   |      |      |   | 11,571    |           |           |   | 12,632    |           |           |   | (1,061  | )       |          |   | (8.4   | )   
|General and administrative(a)                                                                                                     |                |                             | 65,790    |           |                |   | 42,321    |           |           |   | 23,469   |         |         |      | 55.5   |      |      |   |          |           |           |   |          |           |           |   |        |         |          |   |       |     
|Impairments                                                                                                                       |                |                             |          |           |                |   | 135,220   |           |           |   | (135,220 | )       |         |      | (100.0 | )    |      |   |          |           |           |   |          |           |           |   |        |         |          |   |       |     
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|                                                                                                                                  | Total expenses |                             |           | 1,897,685 |                |   |           | 1,756,183 |           |   |          | 141,502 |         |      |        | 8.1  |      |   |           | 1,450,568 |           |   |           | 1,406,409 |           |   |         | 44,159  |          |   |        | 3.1  |      
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|                                                                                                                                  |                | Operating income            |           |           | 1,462,081      |   |           |           | 1,209,963 |   |          |         | 252,118 |      |        |      | 20.8 |   |           |           | 1,058,194 |   |           |           | 1,161,149 |   |         |         | (102,955 | ) |        |      | (8.9  | )
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Interest/ dividend income                                                                                                         |                |                             | 22,148    |           |                |   | 40,015    |           |           |   | (17,867  | )       |         |      | (44.7  | )    |      |   | 3,913     |           |           |   | 4,940     |           |           |   | (1,027  | )       |          |   | (20.8  | )   
|Interest expense(b)                                                                                                               |                |                             | (814,645  | )         |                |   | (742,586  | )         |           |   | (72,059  | )       |         |      | 9.7    |      |      |   | (196,014  | )         |           |   | (220,213  | )         |           |   | 24,199  |         |          |   | (11.0  | )   
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|                                                                                                                                  |                | Total other income/ expense |           |           | (792,497       | ) |           |           | (702,571  | ) |          |         | (89,926 | )    |        |      | 12.8 |   |           |           | (192,101  | ) |           |           | (215,273  | ) |         |         | 23,172   |   |        |      | (10.8 | )
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                |                             | 669,584   |           |                |   | 507,392   |           |           |   | 162,192  |         |         |      | 32.0   |      |      |   | 866,093   |           |           |   | 945,876   |           |           |   | (79,783 | )       |          |   | (8.4   | )   
|Income taxes                                                                                                                      |                |                             | (9,126    | )         |                |   | (8,745    | )         |           |   | (381     | )       |         |      | 4.4    |      |      |   | (1,027    | )         |           |   | (1,535    | )         |           |   | 508     |         |          |   | (33.1  | )   
|Minority interests                                                                                                                |                |                             | (7,200    | )         |                |   | (8,685    | )         |           |   | 1,485    |         |         |      | (17.1  | )    |      |   | (7,146    | )         |           |   | (8,685    | )         |           |   | 1,539   |         |          |   | (17.7  | )   
|Income from investments in unconsolidated joint
    ventures                                                                      |                |                             | 106,852   |           |                |   | 69,203    |           |           |   | 37,649   |         |         |      | 54.4   |      |      |   | 71,792    |           |           |   | 64,504    |           |           |   | 7,288   |         |          |   | 11.3   |     
|Net gain on sales of real estate                                                                                                  |                |                             |          |           |                |   | 81,662    |           |           |   | (81,662  | )       |         |      | (100.0 | )    |      |   |          |           |           |   | 8,000     |           |           |   | (8,000  | )       |          |   | (100.0 | )   
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Income from continuing operations                                                                                                 |                |                             | 760,110   |           |                |   | 640,827   |           |           |   | 119,283  |         |         |      | 18.6   |      |      |   | 929,712   |           |           |   | 1,008,160 |           |           |   | (78,448 | )       |          |   | (7.8   | )   
|Discontinued operations (including net gain on
    sales of real estate of $17,926 in 2002)                                       |                |                             | 99,310    |           |                |   | 55,746    |           |           |   | 43,564   |         |         |      | 78.1   |      |      |   |          |           |           |   |          |           |           |   |        |         |          |   |       |     
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Income before extraordinary item and cumulative
    effect of a change in accounting principle                                    |                |                             | 859,420   |           |                |   | 696,573   |           |           |   | 162,847  |         |         |      | 23.4   |      |      |   | 929,712   |           |           |   | 1,008,160 |           |           |   | (78,448 | )       |          |   | (7.8   | )   
|Extraordinary item                                                                                                                |                |                             |          |           |                |   | (1,000    | )         |           |   | 1,000    |         |         |      | (100.0 | )    |      |   |          |           |           |   | (268      | )         |           |   | 268     |         |          |   | (100.0 | )   
|Cumulative effect of a change in accounting
    principle                                                                         |                |                             |          |           |                |   | (1,142    | )         |           |   | 1,142    |         |         |      | (100.0 | )    |      |   |          |           |           |   |          |           |           |   |        |         |          |   |       |     
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Net income                                                                                                                        |                | $                           | 859,420   |           |                | $ | 694,431   |           |           | $ | 164,989  |         |         |      | 23.8   | %    |      | $ | 929,712   |           |           | $ | 1,007,892 |           |           | $ | (78,180 | )       |          |   | (7.8   | )%  
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Property net operating income from continuing
    operations(c)                                                                   |                | $                           | 2,195,164 |           |                | $ | 1,942,439 |           |           | $ | 252,725  |         |         |      | 13.0   | %    |      | $ | 1,577,321 |           |           | $ | 1,663,906 |           |           | $ | (86,585 | )       |          |   | (5.2   | )%  
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Deferred rental revenue                                                                                                           |                | $                           | 67,412    |           |                | $ | 66,530    |           |           | $ | 882      |         |         |      | 1.3    | %    |      | $ | 31,811    |           |           | $ | 49,951    |           |           | $ | (18,140 | )       |          |   | (36.3  | )%  
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          
|Lease termination fees                                                                                                            |                | $                           | 104,178   |           |                | $ | 39,438    |           |           | $ | 64,740   |         |         |      | 164.2  | %    |      | $ | 46,497    |           |           | $ | 34,732    |           |           | $ | 11,765  |         |          |   | 33.9   | %   
|                                                                                                                                  |                |                             |           |           |                |   |           |           |           |   |          |         |         |      |        |      |      |   |           |           |           |   |           |          



---



|    |  |                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Corporate general and administrative expense is
    not allocated to the core portfolio because these expenses are
    not directly incurred in connection with any specific Property.                                                                                                
|   
|(b) |  | Interest expense (including amortization of
    deferred financing costs and prepayment expenses) for the core
    portfolio represents interest expense on property secured
    mortgage debt and does not include interest expense on the
    unsecured notes or the line of credit.

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|    |  |                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------
|(c) |  | Represents segment data. See Item 8.
    Financial Statements and Supplementary Data Note 20-Segment
    Information.

Property Operating Revenues

The increase in property operating revenues in
the Total Portfolio was primarily due to the Spieker Partnership
merger in July 2001, which was partially offset by a decrease in
occupancy in the core portfolio as described below. In addition,
lease termination fees were $104.2 million in 2002 as
compared to $39.4 million in 2001. Included in the lease
termination fees of $104.2 million in 2002 was
approximately $46.1 million from one tenant. The primary
reason for the increase in the lease termination fees and the
decrease in occupancy was the slowdown in economic activity.
Lease termination fees relate to specific tenants, each of which
has paid a fee to terminate its lease obligations before the end
of the contractual term of the lease.

The decrease in property operating revenues in
the core portfolio was primarily due to a decrease in occupancy
from 94.5% at January 1, 2001 to 89.2% at December 31,
2002. Occupancy decreased primarily due to tenant rollover and
early lease terminations where the space was not re-leased. The
decrease in property operating revenues was partially offset by
lease termination fees of $46.5 million in 2002 as compared
to $34.7 million in 2001.

Depreciation and Amortization

Total Portfolio depreciation and amortization
expense increased primarily due to the Spieker Partnership
merger and capital and tenant improvements made during each
year. Core portfolio depreciation and amortization expense
increased as a result of capital and tenant improvements made
during each year.

Property Operating Expenses and Real Estate Taxes

Total Portfolio property operating expenses and
real estate taxes increased primarily due to the Spieker
Partnership merger. Core portfolio property operating expenses
and real estate taxes increased primarily due to an increase of
approximately $4.5 million for safety and security expense
and higher insurance premiums of approximately $8.4 million
primarily due to the terrorist attacks on September 11,
2001, an increase of approximately $10.6 million for
repairs and maintenance and an increase in real estate taxes of
approximately $5.2 million. The increase in property
operating expenses and real estate taxes was partially offset by
a decrease of approximately $8.2 million in utilities
expense.

Ground Rent

Ground rent for the Total Portfolio increased
from the prior period primarily due to the Spieker Partnership
merger as several Properties acquired in the Spieker Partnership
merger are subject to ground leases.

General and Administrative Expenses

General and administrative expenses increased
primarily due to professional and consulting fees related to the
EOPlus initiative of $15.7 million and severance expense of
approximately $7.3 million in 2002. The total severance
consisted of severance payments and the accelerated vesting of
share options and restricted shares.

Beginning in fiscal 2003, we reclassified
regional operating expenses and other costs directly associated
with property operations from general and administrative
expenses to property operating expenses. The regional offices
exist to provide oversight for the management and leasing of the
Properties. Accordingly, these expenses were classified as
property operating expenses and all prior periods have been
reclassified to provide for comparability. This reclassification
did not change the prior period results or partners
capital.

Impairments

For information on this item refer to
Item 8. Financial Statements and Supplementary
Data  Note 8  Impairment.

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Interest/Dividend Income

Interest/dividend income decreased for the Total
Portfolio as a result of an $8.5 million decrease in
dividends and discount amortization from our $90.6 million
investment in HQ Global Workplaces, Inc. (HQ Global)
Series A Convertible Cumulative Preferred Stock (HQ
Preferred Stock) which was written-off in 2001 and a
reduction in interest income on notes receivable of
approximately $6.6 million. In addition, CT Convertible
Trust I redeemed its non-convertible preferred securities
that earned a 13% annual dividend for approximately
$20.1 million, including accrued dividends, in September
2002.

Interest Expense

Total Portfolio interest expense increased from
the prior year as a result of having more debt outstanding
during 2002, mainly as a result of the Spieker Partnership
merger. This increase was partially offset by interest rate swap
agreements in effect during 2002 and 2001 which effectively
reduced interest expense by approximately $21.3 million by
converting the fixed interest rates to variable rates for a
portion of the unsecured notes. The swap agreements were all
terminated in 2001 and 2002. Total proceeds of approximately
$90.2 million resulting from the settlement of the swaps
are being amortized ratably over the remaining terms of the
respective unsecured notes as a reduction to interest expense.
Core portfolio interest expense decreased from the prior year as
a result of the repayment and refinancing of certain mortgage
notes.

Income from Investment in Unconsolidated Joint
Ventures

Income from investment in unconsolidated joint
ventures increased for the Total Portfolio primarily due to
lease termination fees of $46.4 million in 2002 as compared
to $1.0 million in 2001. Included in the lease termination
fees of $46.4 million in 2002 was approximately
$40 million from one tenant.

Income from investment in unconsolidated joint
ventures increased for the core portfolio primarily due to lease
termination fees of $6.4 million in 2002 as compared to
$1.0 million in 2001 and also increased due to a
$7.6 million decrease in interest expense as a result of
lower interest rates on variable rate mortgage notes and the
repayment of a mortgage note. The increase in income from
unconsolidated joint ventures was partially offset by a decrease
in property revenues as a result of a decrease in occupancy.

Net Gain on Sales of Real Estate and Discontinued
Operations

Net gain on sales of real estate for the Total
Portfolio decreased from the prior period as a result of a
presentation change for sold properties in accordance with
SFAS No. 144. Gains and losses from properties sold
prior to 2002 are reflected as net gain on sales of real
estate and gains and losses from properties sold in 2002
are reflected in discontinued operations. The
increase in discontinued operations was primarily due to the
gain on the sale of the properties sold in 2002 and properties
sold in 2003 that were acquired through the Spieker Partnership
merger in July 2001. The gain on sale of real estate in 2001
from the Core Portfolio represents income received from an
unaffiliated party for an easement allowing highway access under
an Office Property.

Extraordinary Item

The extraordinary item relates to repair costs to
certain Office Properties located in Seattle, Washington that
were incurred as a result of damage from an earthquake in
February 2001.

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Discontinued Operations

The net income for properties sold subsequent to
December 31, 2001 is reflected in the consolidated
statements of operations as Discontinued Operations for the
periods presented. Below is a summary of the results of
operations of these properties through their respective
disposition dates:

|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |        |        |        | 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------- | ---------------- | ------ | ------ | ------ | ------- | ------ | ------ | ------ | ------- | ------ | ------ | ------ | 
|                                                                    |                                                                                           |                                 
|                                                                    |                                                                                           | For the years ended December 31, |                 
|                                                                    |                                                                                           |                                  |                 
|                                                                    |                                                                                           | 2003                             |                  |        | 2002   |        |         | 2001   |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|(Dollars in thousands)                                              |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |       
|Total revenues                                                      |                                                                                           | $                                | 83,829           |        |        | $      | 164,425 |        |        | $      | 123,770 |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Expenses:                                                           |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |       
|                                                                    | Depreciation and amortization                                                             |                                  |                  | 14,803 |        |        |         | 28,129 |        |        |         | 21,702 |       
|                                                                    | Property operating                                                                        |                                  |                  | 25,228 |        |        |         | 54,266 |        |        |         | 45,362 |       
|                                                                    | Ground rent                                                                               |                                  |                  | 18     |        |        |         | 164    |        |        |         | 236    |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           | Total expenses                   |                  |        | 40,049 |        |         |        | 82,559 |        |         |        | 67,300 |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           |                                  | Operating income |        |        | 43,780 |         |        |        | 81,866 |         |        |        | 56,470 | 
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Other income/ expense:                                              |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |       
|                                                                    | Interest/ dividend income                                                                 |                                  |                  | 158    |        |        |         | 233    |        |        |         | 217    |       
|                                                                    | Interest expense and amortization of deferred
    financing costs and prepayment expenses |                                  |                  | (20    | )      |        |         | (346   | )      |        |         | (849   | )     
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           | Total other income/ expense      |                  |        | 138    |        |         |        | (113   | )      |         |        | (632   | )     
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Income before income taxes and net gain on sales
    of real estate |                                                                                           |                                  | 43,918           |        |        |        | 81,753  |        |        |        | 55,838  |       
|Income taxes                                                        |                                                                                           |                                  | 67               |        |        |        | (369    | )      |        |        | (92     | )     
|Net gain on sales of real estate                                    |                                                                                           |                                  | 61,953           |        |        |        | 17,926  |        |        |        |        |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Net income                                                          |                                                                                           | $                                | 105,938          |        |        | $      | 99,310  |        |        | $      | 55,746  |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Property net operating income from discontinued
    operations      |                                                                                           | $                                | 58,601           |        |        | $      | 110,159 |        |        | $      | 78,408  |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       

Segment Reporting

For segment reporting purposes, the office
properties, apartment properties and the land parcels that were
sold are included in the Office Properties segment
and the industrial properties and parking facilities that were
sold are included in the Corporate and Other segment.

Liquidity and Capital Resources



| |          
| | ---------
| | Liquidity

Our net cash provided by operating activities is
primarily dependent upon the occupancy level of our properties,
the rental rates on our leases, the collectibility of rent from
our tenants, the level of operating and other expenses, and
other factors. Our net cash provided by operating activities,
including our share of net cash provided by operating activities
from unconsolidated joint ventures, has been our primary source
of liquidity to fund debt service, capital improvements, tenant
improvements and leasing costs for operating properties as well
as distributions to our unitholders. We expect that our lines of
credit will adequately provide for any additional amounts which
may be needed to fund working capital and unanticipated cash
needs as well as acquisitions and development costs.

In order to qualify as a REIT for federal income
tax purposes, Equity Office must distribute at least 90% of its
taxable income (excluding capital gains) to its shareholders.
Equity Office currently distributes capital gains to its
shareholders; however, these gains can be retained by Equity
Office and taxed at the corporate tax rate. Our partnership
agreement generally requires us to distribute substantially all
of the net cash from

34



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operations each quarter and to make reasonable
efforts to distribute to Equity Office enough cash for it to
meet the 90% distribution requirement. Accordingly, we currently
intend, although we are not legally obligated, to continue to
make regular quarterly distributions to holders of Units and
preferred units. The declaration of dividends on common and
preferred shares is at the discretion of Equity Offices
Board of Trustees, which decision is made from time to time by
Equity Offices Board of Trustees based on then prevailing
circumstances.


A material adverse change in our net cash
provided by operating activities may affect our ability to fund
these items and may affect the financial performance covenants
under our lines of credit and unsecured notes. If we fail to
meet our financial performance covenants and to reach a
satisfactory resolution with our lenders, the maturity dates for
our unsecured notes could be accelerated, and our lines of
credit could become unavailable to us or the interest charged on
the line of credit could increase. Our interest charged on the
line of credit could also increase if our debt ratings adversely
change. Any of these circumstances could adversely affect our
ability to fund working capital and unanticipated cash needs,
acquisitions and development costs.

Lower occupancy levels, reduced rental rates, and
reduced revenues as a result of asset sales have had the effect
of reducing our net cash provided by operating activities. In
addition, our tenant improvement and leasing costs have
increased significantly due to competitive market conditions for
new and renewal leases. During the year ended December 31,
2003, our net free cash flow was insufficient to pay capital
improvements, tenant improvements and leasing costs and
distributions to our unitholders by approximately $179 million.
We funded this net free cash flow deficit primarily with a
combination of borrowings under our line of credit and proceeds
from property dispositions. We define net free cash flow as
(a) net cash provided by operating activities determined in
accordance with GAAP plus funds from operations from our joint
venture activities and minority interest (which we view as an
integral part of our business) plus changes in non-cash items,
such as rents receivable and accounts payable, which are
expected to be settled in cash but are not reflected in net cash
provided by operating activities determined in accordance with
GAAP due to timing differences between the accrual of the
receivable or payable and the cash settlement of such items,
less (b) expenditures for capital improvements, tenant
improvements and leasing costs and distributions to our
unitholders. Net free cash flow is a non-GAAP financial measure
and is reconciled to net cash provided by operating activities,
the most directly comparable GAAP measure, for the period
presented below. Our calculation of net free cash flow is not
necessarily comparable to similar measures that may be presented
by other companies.

|                                                                                                                                                                                                                                               |  |                    |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | -
|                                                                                                                                                                                                                                               |  | For the year ended |          
|                                                                                                                                                                                                                                               |  | December 31, 2003  |          
|(Dollars in thousands)                                                                                                                                                                                                                         |  |                    |          
|Net cash provided by operating activities                                                                                                                                                                                                      |  | $                  | 1,132,303 |  
|Plus: Net joint venture and minority interest FFO
    excluding non-cash items (deferred rent, loan amortization and
    non-real estate depreciation)                                                                                         |  |                    | 112,800   |  
|Plus: Total changes in assets and liabilities in
    net cash provided by operating activities, net of provision for
    doubtful accounts and deferred rent                                                                                   |  |                    | 31,249    |  
|Plus: Other timing differences and changes in
    non-cash items                                                                                                                                                                               |  |                    | 11,665    |  
|Less: Capital improvements, tenant improvements
    and leasing costs (for leases which commenced during the period)
    and other costs including our share of joint ventures capital
    improvements, tenant improvements and leasing costs |  |                    | (512,036  | )
|Less: Distributions to unitholders                                                                                                                                                                                                             |  |                    | (901,259  | )
|Less: Payment of preferred distributions                                                                                                                                                                                                       |  |                    | (53,841   | )
|                                                                                                                                                                                                                                               |  |                    |          
|Net Free Cash Flow Deficit                                                                                                                                                                                                                     |  | $                  | (179,119  | )
|                                                                                                                                                                                                                                               |  |                    |          

If our net cash from operating activities and
tenant improvements and leasing costs continue at these levels,
and if Equity Offices Board of Trustees continues to
declare distributions on its common shares at current levels,
our net free cash flow deficit would continue in subsequent
periods and we would fund this deficit in a similar manner. We
currently anticipate that the deficit for 2004 will be similar
to 2003. Beyond this, we have $1.4 billion of debt maturing
through December 31, 2004. Because our anticipated
distributions will not allow us to retain sufficient cash to
repay all of our debt as it comes due using only cash from
operating

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##### Table of Contents



activities, we will be required to repay most of
our maturing debt with proceeds from asset sales and debt
offerings. Although there can be no assurance that such funding
at acceptable terms will be available to us, we believe that net
cash provided by operating activities, draws under our lines of
credit, proceeds from other financing sources that we expect to
be available to us and proceeds from anticipated asset sales
will together provide sufficient liquidity to meet our cash
needs during this period.


Distributions

In 2003, Equity Offices Board of Trustees
declared dividends on preferred units as reflected below:

|                            |  |              |           |  |                        |   |        | 
|--------------------------- |  | ------------ | --------- |  | ---------------------- | - | ------ | 
|                            |  | Annualized   |           |  |                       
|                            |  | Distribution |           |  | 2003 Distributions     |  
|Security(a)                 |  | Per Unit     |           |  | (Dollars in thousands) |  
|                            |  |              |           |  |                        |  
|Series B Preferred Units    |  | $            | 2.625     |  |                        | $ | 15,724 | 
|Series C Preferred Units(a) |  | $            | 2.15625   |  |                        | $ | 9,839  | 
|Series E Preferred Units(a) |  | $            | 1.3015625 |  |                        | $ | 5,841  | 
|Series F Preferred Units(a) |  | $            | 1.00      |  |                        | $ | 4,000  | 
|Series G Preferred Units    |  | $            | 1.9375    |  |                        | $ | 16,469 | 



---



|    |  |                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Equity Office redeemed the Series C
    Preferred Shares in January 2004 and redeemed the Series E
    and Series F Preferred Shares in June 2003. In connection
    with such redemptions, we redeemed all of the Series C, E
    and F Preferred Units from Equity Office.

Equity Offices Board of Trustees also
declared dividends on the Units for the four quarters of 2003,
at the rate of $.50 per Unit per quarter.

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##### Table of Contents



Contractual Obligations

As of December 31, 2003, we were subject to
certain material contractual payment obligations as described in
the table below. We were not subject to any material capital
lease obligations or unconditional purchase obligations as of
December 31, 2003.

|                                                            |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            |  |   |           |         |  |   |           |           | 
|----------------------------------------------------------- | ------------------ | ---------------------- | ---------- | --------- | ---- | - | --------- | ------- |  | - | --------- | ------- |  | ---- | --------- | ------- | ---- | - | --------- | ---------- |  | - | --------- | ------- |  | - | --------- | --------- | 
|                                                            |                    |                       
|                                                            |                    | Payments Due by Period |           
|                                                            |                    |                        |           
|Contractual Obligations:                                    |                    | Total                  |            |           | 2004 |   |           | 2005    |  |   | 2006      |         |  | 2007 |           |         | 2008 |   |           | Thereafter | 
|                                                            |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            | 
|                                                            |                    |                       
|                                                            |                    | (Dollars in thousands) |           
|Long-term debt:                                             |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            |  |   |           |         |  |   |           |          
|                                                            | Mortgage debt(1)   |                        | $          | 2,329,552 |      |   | $         | 375,761 |  |   | $         | 568,787 |  |      | $         | 343,878 |      |   | $         | 237,024    |  |   | $         | 132,061 |  |   | $         | 672,041   | 
|                                                            | Unsecured notes(2) |                        |            | 8,816,500 |      |   |           | 880,000 |  |   |           | 675,000 |  |      |           | 650,000 |      |   |           | 976,500    |  |   |           | 775,000 |  |   |           | 4,860,000 | 
|Line of Credit                                              |                    |                        | 334,000    |           |      |   |          |         |  |   |          |         |  |      | 334,000   |         |      |   |          |            |  |   |          |         |  |   |          |          
|Series B Preferred Units                                    |                    |                        | 299,500    |           |      |   |          |         |  |   |          |         |  |      |          |         |      |   |          |            |  |   | 299,500   |         |  |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                        | 797,268    |           |      |   | 117,153   |         |  |   | 466,505   |         |  |      | 52,283    |         |      |   | 2,622     |            |  |   | 16,989    |         |  |   | 141,716   |          
|Operating leases                                            |                    |                        | 1,260,561  |           |      |   | 16,583    |         |  |   | 16,649    |         |  |      | 16,748    |         |      |   | 16,646    |            |  |   | 16,660    |         |  |   | 1,177,275 |          
|Share of ground leases of unconsolidated joint
    ventures |                    |                        | 128,566    |           |      |   | 1,216     |         |  |   | 1,216     |         |  |      | 1,258     |         |      |   | 1,294     |            |  |   | 1,294     |         |  |   | 122,288   |          
|Construction contracts on developments                      |                    |                        | 12,732     |           |      |   | 12,732    |         |  |   |          |         |  |      |          |         |      |   |          |            |  |   |          |         |  |   |          |          
|                                                            |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            | 
|Total Contractual Obligations                               |                    | $                      | 13,978,679 |           |      | $ | 1,403,445 |         |  | $ | 1,728,157 |         |  | $    | 1,398,167 |         |      | $ | 1,234,086 |            |  | $ | 1,241,504 |         |  | $ | 6,973,320 |          
|                                                            |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            | 
|Weighted Average Interest Rates on Maturing
    Debt:       |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            |  |   |           |         |  |   |           |          
|Long-term debt:                                             |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            |  |   |           |         |  |   |           |          
|                                                            | Mortgage debt      |                        |            | 7.63%     |      |   |           | 7.15%   |  |   |           | 7.87%   |  |      |           | 7.15%   |      |   |           | 7.87%      |  |   |           | 7.48%   |  |   |           | 7.84%     | 
|                                                            | Unsecured notes    |                        |            | 6.95%     |      |   |           | 5.42%   |  |   |           | 5.67%   |  |      |           | 7.52%   |      |   |           | 7.52%      |  |   |           | 7.27%   |  |   |           | 7.17%     | 
|Line of credit                                              |                    |                        | 1.95%      |           |      |   |          |         |  |   |          |         |  |      | 1.95%     |         |      |   |          |            |  |   |          |         |  |   |          |          
|Share of mortgage debt of unconsolidated joint
    ventures |                    |                        | 6.27%      |           |      |   | 2.27%     |         |  |   | 7.30%     |         |  |      | 7.67%     |         |      |   |          |            |  |   | 6.92%     |         |  |   | 5.43%     |          
|                                                            |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            | 
|Total Weighted Average Interest Rates                       |                    |                        | 6.90%      |           |      |   | 5.60%     |         |  |   | 6.83%     |         |  |      | 6.08%     |         |      |   | 7.59%     |            |  |   | 7.29%     |         |  |   | 7.21%     |          
|                                                            |                    |                        |            |           |      |   |           |         |  |   |           |         |  |      |           |         |      |   |           |            | 



---



|    |                                                                  
|--- | -----------------------------------------------------------------
|(1) | Balance excludes a net unamortized discount of
    $13.7 million.
|   
|(2) | Balance excludes a net unamortized premium of
    $12.4 million. 

Forward-Starting Interest Rate Swaps

See Market Risk for information on
our forward-starting interest rate swaps.

Energy Contracts

In an ongoing effort to control energy costs,
from time to time we enter into contracts for the purchase of
gas or electricity for properties in states which have
deregulated their energy markets. Typically, these contracts
provide for a term of one to three years. Although all or a
portion of the commodity price under these contracts is
generally fixed, the amounts actually expended under these
contracts will vary in accordance with actual energy usage or
the timing of energy usage during the period. As a result, the
amounts to be expended under these contracts are difficult to
predict. During 2003 more than half of our energy expenditures
were made under various contracts of this nature and most of
these expenditures were reimbursable by our tenants as ordinary
operating expenses.

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##### Table of Contents



Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements
with any unconsolidated investments or joint ventures that we
believe have or are reasonably likely to have a material effect
on our financial condition, results of operations, liquidity or
capital resources.

Debt Financing

The table below summarizes our consolidated
mortgage debt, unsecured notes and line of credit indebtedness
at December 31, 2003 and 2002. The amounts shown include
unamortized discounts on mortgage debt of approximately
$13.7 million and $12.6 million, respectively, and
unamortized premiums on unsecured notes of $12.4 million
and $41.2 million, respectively. The discounts and premiums
were originally recorded in connection with certain property
acquisitions, mergers, issuances of unsecured notes and interest
rate swap settlements.

|                                         |                  |                         |   |            |            |   |   |            |            |  
|---------------------------------------- | ---------------- | ----------------------- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                         |                  |                        
|                                         |                  | December 31,            |  
|                                         |                  |                         |  
|(Dollars in thousands)                   |                  | 2003                    |   |            | 2002       |  
|                                         |                  |                         |   |            |            |  
|Balance                                  |                  |                         |   |            |            |   |   |           
|                                         | Fixed rate       |                         | $ | 11,108,801 |            |   | $ | 11,529,541 |           
|                                         | Variable rate(a) |                         |   | 370,000    |            |   |   | 241,700    |           
|                                         |                  |                         |   |            |            |  
|                                         |                  | Total                   |   | $          | 11,478,801 |   |   | $          | 11,771,241 |  
|                                         |                  |                         |   |            |            |  
|Percent of total debt                    |                  |                         |   |            |            |   |   |           
|                                         | Fixed rate       |                         |   | 96.8       | %          |   |   | 97.9       | %         
|                                         | Variable rate(a) |                         |   | 3.2        | %          |   |   | 2.1        | %         
|                                         |                  |                         |   |            |            |  
|                                         |                  | Total                   |   |            | 100.0      | % |   |            | 100.0      | %
|                                         |                  |                         |   |            |            |  
|Effective interest rate at end of period |                  |                         |   |            |            |   |   |           
|                                         | Fixed rate       |                         |   | 7.11       | %          |   |   | 7.17       | %         
|                                         | Variable rate(a) |                         |   | 1.93       | %          |   |   | 2.37       | %         
|                                         |                  |                         |   |            |            |  
|                                         |                  | Effective interest rate |   |            | 6.94       | % |   |            | 7.08       | %
|                                         |                  |                         |   |            |            |  



---



|    |  |                                                                              
|--- |  | -----------------------------------------------------------------------------
|(a) |  | The interest rate for these notes is based on
    various spreads over LIBOR.

Mortgage Debt

As of December 31, 2003, total mortgage debt
(excluding our share of the mortgage debt encumbering
unconsolidated properties of approximately $797.3 million)
consisted of approximately $2,279.9 million of fixed rate
debt with a weighted average interest rate of approximately
7.72% and $36.0 million of variable rate debt based on
LIBOR plus 55 basis points (1.72% as of December 31,
2003). See Liquidity and Capital Resources 
Contractual Obligations for annual payment obligations
under our mortgage debt.

The instruments encumbering the properties
restrict title transfer of the respective properties subject to
the terms of the mortgage, prohibit additional liens, require
payment of real estate taxes on the properties, maintenance of
the properties in good condition, maintenance of insurance on
the properties and include a requirement to obtain lender
consent to enter into material tenant leases.

Line of Credit

We have a $1.0 billion revolving credit
facility that was obtained in May 2003. As of March 12,
2004 and December 31, 2003, $921.7 million and
$334.0 million was outstanding under this facility,
respectively. The line of credit bears interest at LIBOR plus
60 basis points, has an annual facility fee of
20 basis points payable quarterly and matures in May 2006.
The effective rate on the line of credit at December 31,
2003 was approximately 1.95%. In addition, a competitive bid
option, whereby the lenders participating in the credit facility
may bid on the interest to be charged resulting in an interest
rate lower than LIBOR plus 60 basis points, is available
for up to $350 million of the borrowings under the credit
facility.

38



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##### Table of Contents



364-Day Line of Credit

In December 2003, we obtained a $1.0 billion
364-day credit facility. The facility has a $200 million
revolving component and a $800 million term component. As
of December 31, 2003, no amounts were outstanding under
this facility. The line of credit bears interest at LIBOR plus
65 basis points, has an annual facility fee of
15 basis points payable quarterly and matures in December
2004. In addition, a competitive bid option, whereby the lenders
participating in the credit facility may bid on the interest to
be charged resulting in an interest rate lower than LIBOR plus
65 basis points, is available for up to $350 million
of the borrowings under the credit facility.

Unsecured Notes

Unsecured notes decreased to approximately
$8,828.9 million at December 31, 2003 compared to
approximately $9,057.7 million at December 31, 2002,
as a result of the repayment of $300 million 6.38%
unsecured notes in February 2003, the repayment of
$400 million 7.38% unsecured notes in November 2003 and
amortization of discounts and premiums, partially offset by the
issuance in January 2003 of $500 million 5.88% unsecured
notes due January 15, 2013.

The table below summarizes the unsecured notes
outstanding as of December 31, 2003:

|              |  |        |      |   |           |                        |      |                   |  |          |           |     |  |  |          | 
|------------- |  | ------ | ---- | - | --------- | ---------------------- | ---- | ----------------- |  | -------- | --------- | --- |  |  | -------- | 
|              |  | Coupon |      |   | Effective |                        |      |                   |  | Maturity |          
|Original Term |  | Rate   |      |   | Rate (a)  |                        |      | Principal Balance |  |          | Date      |    
|              |  |        |      |   |           |                        |      |                   |  |          |           |    
|              |  |        |      |   |           | (Dollars in thousands) |      |                   | 
|5 Years       |  |        | 6.50 | % |           |                        | 4.59 | %                 |  | $        | 300,000   | (b) |  |  | 01/15/04 | 
|9 Years       |  |        | 6.90 | % |           |                        | 6.27 | %                 |  |          | 100,000   | (b) |  |  | 01/15/04 | 
|5 Years       |  |        | 6.80 | % |           |                        | 6.10 | %                 |  |          | 200,000   | (b) |  |  | 05/01/04 | 
|6 Years       |  |        | 6.50 | % |           |                        | 5.31 | %                 |  |          | 250,000   | (b) |  |  | 06/15/04 | 
|7 Years       |  |        | 7.24 | % |           |                        | 7.26 | %                 |  |          | 30,000    | (b) |  |  | 09/01/04 | 
|8 Years       |  |        | 6.88 | % |           |                        | 6.40 | %                 |  |          | 125,000   |     |  |  | 02/01/05 | 
|7 Years       |  |        | 6.63 | % |           |                        | 4.99 | %                 |  |          | 400,000   |     |  |  | 02/15/05 | 
|7 Years       |  |        | 8.00 | % |           |                        | 6.49 | %                 |  |          | 100,000   |     |  |  | 07/19/05 | 
|8 Years       |  |        | 7.36 | % |           |                        | 7.69 | %                 |  |          | 50,000    |     |  |  | 09/01/05 | 
|6 Years       |  |        | 8.38 | % |           |                        | 7.65 | %                 |  |          | 500,000   |     |  |  | 03/15/06 | 
|9 Years       |  |        | 7.44 | % |           |                        | 7.74 | %                 |  |          | 50,000    |     |  |  | 09/01/06 | 
|10 Years      |  |        | 7.13 | % |           |                        | 6.74 | %                 |  |          | 100,000   |     |  |  | 12/01/06 | 
|9 Years       |  |        | 7.00 | % |           |                        | 6.80 | %                 |  |          | 1,500     |     |  |  | 02/02/07 | 
|9 Years       |  |        | 6.88 | % |           |                        | 6.83 | %                 |  |          | 25,000    |     |  |  | 04/30/07 | 
|9 Years       |  |        | 6.76 | % |           |                        | 6.76 | %                 |  |          | 300,000   |     |  |  | 06/15/07 | 
|10 Years      |  |        | 7.41 | % |           |                        | 7.70 | %                 |  |          | 50,000    |     |  |  | 09/01/07 | 
|7 Years       |  |        | 7.75 | % |           |                        | 7.91 | %                 |  |          | 600,000   |     |  |  | 11/15/07 | 
|10 Years      |  |        | 6.75 | % |           |                        | 6.97 | %                 |  |          | 150,000   |     |  |  | 01/15/08 | 
|10 Years      |  |        | 6.75 | % |           |                        | 7.01 | %                 |  |          | 300,000   |     |  |  | 02/15/08 | 
|8 Years(c)    |  |        | 7.25 | % |           |                        | 7.64 | %                 |  |          | 325,000   |     |  |  | 11/15/08 | 
|10 Years      |  |        | 6.80 | % |           |                        | 6.94 | %                 |  |          | 500,000   |     |  |  | 01/15/09 | 
|10 Years      |  |        | 7.25 | % |           |                        | 7.14 | %                 |  |          | 200,000   |     |  |  | 05/01/09 | 
|11 Years      |  |        | 7.13 | % |           |                        | 6.97 | %                 |  |          | 150,000   |     |  |  | 07/01/09 | 
|10 Years      |  |        | 8.10 | % |           |                        | 8.22 | %                 |  |          | 360,000   |     |  |  | 08/01/10 | 
|10 Years      |  |        | 7.65 | % |           |                        | 7.20 | %                 |  |          | 200,000   |     |  |  | 12/15/10 | 
|10 Years      |  |        | 7.00 | % |           |                        | 6.83 | %                 |  |          | 1,100,000 |     |  |  | 07/15/11 | 
|10 Years      |  |        | 6.75 | % |           |                        | 7.02 | %                 |  |          | 500,000   |     |  |  | 02/15/12 | 
|10 Years      |  |        | 5.88 | % |           |                        | 5.98 | %                 |  |          | 500,000   |     |  |  | 01/15/13 | 

39



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##### Table of Contents



|              |                            |        |           |      |           |                        |      |                   |   |          |         |           |  |  |          |  | 
|------------- | -------------------------- | ------ | --------- | ---- | --------- | ---------------------- | ---- | ----------------- | - | -------- | ------- | --------- |  |  | -------- |  | 
|              |                            | Coupon |           |      | Effective |                        |      |                   |   | Maturity |        
|Original Term |                            | Rate   |           |      | Rate (a)  |                        |      | Principal Balance |   |          | Date    |          
|              |                            |        |           |      |           |                        |      |                   |   |          |         |          
|              |                            |        |           |      |           | (Dollars in thousands) |      |                   |  
|20 Years      |                            |        | 7.88      | %    |           |                        | 8.08 | %                 |   | $        | 25,000  |           |  |  | 12/01/16 | 
|20 Years      |                            |        | 7.35      | %    |           |                        | 8.08 | %                 |   |          | 200,000 |           |  |  | 12/01/17 | 
|20 Years      |                            |        | 7.25      | %    |           |                        | 7.54 | %                 |   |          | 250,000 |           |  |  | 02/15/18 | 
|30 Years      |                            |        | 7.50      | %    |           |                        | 8.24 | %                 |   |          | 150,000 |           |  |  | 10/01/27 | 
|30 Years      |                            |        | 7.25      | %    |           |                        | 7.31 | %                 |   |          | 225,000 |           |  |  | 06/15/28 | 
|30 Years      |                            |        | 7.50      | %    |           |                        | 7.55 | %                 |   |          | 200,000 |           |  |  | 04/19/29 | 
|30 Years      |                            |        | 7.88      | %    |           |                        | 7.94 | %                 |   |          | 300,000 |           |  |  | 07/15/31 | 
|              |                            |        |           |      |           |                        |      |                   |   |          |         |          
|              | Weighted Average/ Subtotal |        |           | 7.15 | %         |                        |      | 6.95              | % |          |         | 8,816,500 |  |  |          |  | 
|              |                            |        |           |      |           |                        |      |                   |   |          |         |          
|Net premium   |                            |        | 12,412    |      |           |                        |      |                  
|              |                            |        |           |      |           |                       
|Total         |                            | $      | 8,828,912 |      |           |                        |      |                  
|              |                            |        |           |      |           |                       



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes the effect of settled interest rate
    protection and interest rate swap agreements, offering and
    transaction costs and premiums and discounts on certain
    unsecured notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(b) |  | Through 2004, $880 million of unsecured
    notes will mature and become payable, including the
    $400 million of unsecured notes that matured in January
    2004 and were repaid with our line of credit. Our options for
    repaying the remaining notes include proceeds from our lines of
    credit, proceeds from additional debt and/or equity offerings or
    proceeds from property dispositions.                                                                                                                                                                                                                                                                                                             
|   
|(c) |  | The notes are exchangeable into Equity Office
    Common Shares at an exchange rate of $34.00 per share. If
    the closing price of a Common Share at the time a holder
    exercises its exchange right is less than the exchange price of
    $34.00, the holder will receive, in lieu of Common Shares, cash
    in an amount equal to 97% of the product of the number of Common
    Shares into which the principal amount of notes subject to such
    exercise would otherwise be exchangeable and the current market
    price per Common Share. Upon exchange of a $1,000 note for
    Common Shares of Equity Office, we would issue a corresponding
    number of Units to Equity Office on a one-for-one basis.

As of March 12, 2004, $1.6 billion was
available for issuance under a previously filed
$4.0 billion shelf registration statement.

Restrictions and Covenants under Unsecured
Indebtedness

Agreements or instruments relating to our lines
of credit and unsecured notes contain certain financial
restrictions and requirements regarding total debt-to-assets
ratios, debt service coverage ratios, minimum ratio of
unencumbered assets to unsecured debt and other limitations. As
of December 31, 2003, we were in compliance with each of
these financial restrictions and requirements. If we fail to
comply with any of these restrictions and requirements, then the
indebtedness could become due and payable before its stated due
date.

Set forth below are the financial restrictions
and requirements to which we are subject under our unsecured
note indentures and our performance under each covenant as of
December 31, 2003:

|                                                                                                             |  |                    |      |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ---- | -
|Covenants (a) (in each case as defined in the respective indenture)                                          |  | Actual Performance |     
|                                                                                                             |  |                    |     
|Debt to Adjusted Total Assets may not be greater
    than 60%                                                |  |                    | 47   | %
|Secured Debt to Adjusted Total Assets may not be
    greater than 40%                                        |  |                    | 12   | %
|Consolidated Income Available for Debt Service to
    Annual Debt Service charge may not be less than 1.50:1 |  |                    | 2.45 |  
|Total Unencumbered Assets to Unsecured Debt may
    not be less than 150% (b)                                |  |                    | 219  | %



---



|    |  |                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------
|(a) |  | The calculations of our actual performance under
    each covenant are included as Appendix A to this
    Form 10-K.

40



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##### Table of Contents





|    |  |                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------
|(b) |  | The unsecured notes assumed in the merger with
    Spieker Partnership are subject to a minimum ratio of 165%.

Equity Securities

The following table presents the changes in
Equity Offices issued and outstanding Common Shares and
EOP Partnerships Units (exclusive of Units owned by Equity
Office) since December 31, 2002:

|                                 |                                                                     |               |             |             |       |  |            |          |   |  |             |             |  
|-------------------------------- | ------------------------------------------------------------------- | ------------- | ----------- | ----------- | ----- |  | ---------- | -------- | - |  | ----------- | ----------- | -
|                                 |                                                                     | Common Shares |             |             | Units |  |            | Total    |  
|                                 |                                                                     |               |             |             |       |  |            |          |  
|Outstanding at December 31, 2002 |                                                                     |               | 411,200,998 |             |       |  | 50,206,731 |          |   |  | 461,407,729 |            
|                                 | Share options exercised                                             |               |             | 1,661,333   |       |  |            |         |   |  |             | 1,661,333   |  
|                                 | Common Shares repurchased/retired(a)                                |               |             | (14,236,400 | )     |  |            |         |   |  |             | (14,236,400 | )
|                                 | Units redeemed for Common Shares                                    |               |             | 934,261     |       |  |            | (934,261 | ) |  |             |            |  
|                                 | Units redeemed for cash(b)                                          |               |             |            |       |  |            | (240,240 | ) |  |             | (240,240    | )
|                                 | Restricted shares and share awards issued, net of
    cancellations |               |             | 900,196     |       |  |            |         |   |  |             | 900,196     |  
|                                 |                                                                     |               |             |             |       |  |            |          |  
|Outstanding at December 31, 2003 |                                                                     |               | 400,460,388 |             |       |  | 49,032,230 |          |   |  | 449,492,618 |            
|                                 |                                                                     |               |             |             |       |  |            |          |  



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In July 2002, Equity Office announced a Common
    Share repurchase program allowing for the repurchase of up to
    $200 million of Common Shares, which was later increased to
    $400 million in November 2002 and to $600 million in
    March 2003, over the next 12 months at the discretion of
    management. The Common Shares may be repurchased in the open
    market or privately negotiated transactions. During 2003,
    14,236,400 Common Shares were repurchased at an average
    price of $25.53 for approximately $363.5 million in the
    aggregate. In connection with the repurchases, we purchased from
    Equity Office and retired a corresponding number of Units for an
    aggregate purchase price equal to the aggregate purchase price
    for all Common Share repurchases.
|   
|(b) |  | During 2003, we redeemed 240,240 Units at an
    average price of $26.76 for a total of approximately
    $6.4 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Cash Flows

The following summary discussion of our cash
flows is based on the consolidated statements of cash flows in
Item 8.  Financial Statements and Supplementary
Data and is not meant to be an all-inclusive discussion of the
changes in our cash flows for the periods presented below.

Years Ended December 31, 2003 and
2002

Cash and cash equivalents increased by
approximately $10.9 million to $69.4 million at
December 31, 2003, compared to $58.5 million at
December 31, 2002. This increase was the net result of
approximately $1,132.3 million provided by operating
activities, approximately $744.8 million provided by
investing activities (consisting primarily of approximately
$1,345.6 million provided by property dispositions
partially offset by approximately $577.6 million used for
capital and tenant improvements and lease acquisition costs) and
approximately $1,866.2 million used for financing
activities (consisting primarily of $619.9 million used for
Common Share, Unit and preferred unit repurchases and
approximately $901.3 million used for distributions to
unitholders).

Years Ended December 31, 2002 and
2001

Cash and cash equivalents decreased by
approximately $2.7 million to $58.5 million at
December 31, 2002, compared to $61.1 million at
December 31, 2001. This decrease was the net result of
approximately $1,390.9 million provided by operating
activities, approximately $85.2 million provided by
investing activities (consisting primarily of
$377.2 million provided by property dispositions and
approximately $167.0 million

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released from escrows partially offset by
approximately $433.6 million used for capital and tenant
improvements and lease acquisition costs) and approximately
$1,478.8 million used for financing activities.


Additional Items for 2003

Developments in Process

Developments in process decreased from
approximately $284.7 million at December 31, 2002 to
approximately $75.2 million at December 31, 2003 due
to three developments that were placed in service (Ferry
Building, Foundry Square II and Waters Edge of which total
costs incurred at December 31, 2002 were approximately
$269.0 million) partially offset by the effect of a
previously operational property being re-characterized as held
for development during 2003 (Cambridge Science Center of which
total costs incurred at December 31, 2003 were
approximately $31.6 million) and approximately
$27.9 million of expenditures during 2003 on current
developments.

Deferred Rent Receivable

Deferred rent receivable increased by
approximately $47.4 million to $379.3 million at
December 31, 2003, compared to $331.9 million at
December 31, 2002. This increase was a result of a
$72.2 million increase in receivables recorded from tenants
for the current difference between the straight-line rent and
the rent that is contractually due from tenants partially offset
by an approximate $17.8 million decrease due to the partial
sales of office properties in 2003.

Escrow Deposits and Restricted
Cash

Escrow deposits primarily consist of amounts held
by lenders to provide for future real estate tax expenditures
and tenant improvements, earnest money deposits on acquisitions
and net proceeds from tax-deferred dispositions. Restricted cash
represents amounts committed for various utility deposits and
security deposits. Certain of these amounts may be reduced upon
the fulfillment of certain obligations. The escrow deposits and
restricted cash increased approximately $46.0 million to
$75.2 million at December 31, 2003 from
$29.2 million at December 31, 2002. The increase was
primarily due to proceeds of $50.0 million from the sale of
certain properties in 2003 that were deposited into an escrow
account pending a tax deferred like kind exchange pursuant to
section 1031 of the Internal Revenue Code.

Deferred Leasing Costs and Other Related
Intangibles

Deferred leasing costs and other related
intangibles increased by approximately $79.6 million to
$314.6 million at December 31, 2003, compared to
$235.0 million at December 31, 2002. This increase was
a result of approximately $142.3 million in new leasing
costs and approximately $21.9 million of intangibles
recorded in accordance with SFAS No. 141 related to the
acquisition of two properties in 2003, partially offset by
amortization expense of approximately $66.4 million, and
$20.2 million from the partial sales of office properties
sold in 2003.

Prepaid Expenses and Other
Assets

Prepaid expenses and other assets increased by
approximately $71.2 million to $344.9 million at
December 31, 2003, compared to $273.7 million at
December 31, 2002. This increase was primarily a result of
an $18.2 million increase in prepaid real estate taxes, an
$11.1 million increase in the market value of our
forward-starting interest rate swaps, a $25.0 million
equity investment in the joint venture that owns The John
Hancock Complex in Boston, Massachusetts, and a
$16.8 million increase in our Supplemental Employee
Retirement Plan.

Deferred Compensation

Deferred compensation decreased by approximately
$9.6 million to approximately $5.9 million at
December 31, 2003 compared to $15.5 million at
December 31, 2002. This decrease was a result of the

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continued amortization of restricted units issued
prior to 2003, which were accounted for under APB 25 prior
to our adoption of SFAS No. 123.


Market Risk

Qualitative Information About Market
Risk

Our future earnings, cash flows and fair values
relevant to financial instruments depend upon prevalent market
rates for those financial instruments. Market risk is the risk
of loss from adverse changes in market prices and interest
rates. We manage our market risk by matching projected cash
inflows from operating, investing and financing activities with
projected cash outflows to fund debt service, acquisitions,
capital expenditures, distributions to unitholders and other
cash requirements. The majority of our outstanding debt
obligations (maturing at various times through 2031) have fixed
interest rates which limit the risk of fluctuating interest
rates. We utilize certain derivative financial instruments at
times to further reduce interest rate risk. Interest rate
protection and swap agreements are used to convert some variable
rate debt to a fixed rate basis, fixed rate debt to a variable
rate basis, or to hedge anticipated financing transactions.
Derivatives are used for hedging purposes rather than
speculation. We do not enter into financial instruments for
trading purposes.

Quantitative Information About Market
Risk

Interest Rate Risk  Debt

The tables below disclose the effect of
hypothetical changes in market rates of interest on interest
expense for variable rate debt and the fair value of total
outstanding debt. Interest risk amounts were determined by
considering the impact of hypothetical interest rates on our
debt. This analysis does not reflect the impact that a changing
interest rate environment could have on the overall level of
economic activity. Further, in the event of a changing interest
rate environment, management would likely take actions to
further mitigate its exposure to the change. However, due to the
uncertainty of the specific actions that would be taken and
their possible effects, this analysis assumes no change in our
financial structure.

|                  |  |                          |                         |           |          |   |               |               |                |   |                |  |  |   |               | 
|----------------- |  | ------------------------ | ----------------------- | --------- | -------- | - | ------------- | ------------- | -------------- | - | -------------- |  |  | - | ------------- | 
|                  |  |                          |                         | Effect on |          |   |               |               | Effect on Fair |  
|                  |  | Hypothetical change in   |                         |           | Interest |   |               | Effect on Net |                |   | Value of       | 
|As of             |  | market rates of interest |                         |           | Expense  |   |               | Income        |                |   | Total Debt(a)  | 
|                  |  |                          |                         |           |          |   |               |               |                |   |                | 
|December 31, 2003 |  |                          | +10% or 12 basis points |           |          | $ | 0.4  million  |               |                | $ | (0.4)  million |  |  | $ | (213) million | 
|                  |  |                          | -10% or 12 basis points |           |          | $ | (0.4) million |               |                | $ | 0.4   million  |  |  | $ | 223  million  | 
|December 31, 2002 |  |                          | +10% or 14 basis points |           |          | $ | 0.3  million  |               |                | $ | (0.3)  million |  |  | $ | (190) million | 
|                  |  |                          | -10% or 14 basis points |           |          | $ | (0.3) million |               |                | $ | 0.3   million  |  |  | $ | 197  million  | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | As of December 31, 2003 and 2002, the fair
    value of our fixed-rate debt was approximately $1.3 billion
    and $1.0 billion higher than the book value of
    approximately $11.1 billion and $11.5 billion,
    respectively, primarily due to the general decrease in market
    interest rates on secured and unsecured debt.

Interest Rate Risk 
Derivatives

Interest
Rate Swaps

During 2002 and 2001, we entered into and
terminated several interest rate swap agreements that hedged
certain unsecured notes. In each case, we were the variable
interest rate payer and the counterparty was the fixed rate
payer. The variable interest rates were based on various spreads
over LIBOR. The settlement dates corresponded to the interest
payment dates of the respective unsecured notes hedged. Each of
the interest rate swap agreements were to terminate on the
maturity date of the respective unsecured notes hedged. The
interest rate swap agreements were designated as fair value
hedges. As of December 31, 2002, these interest rate swaps
had been terminated.

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

As of December 31, 2003 and 2002, we had
$1.3 billion and $1.1 billion of forward-starting
interest rate swaps outstanding, respectively. The outstanding
swaps will hedge the future interest payments of debt
anticipated to be issued in 2004. The market value of the
forward-starting interest rate swaps at December 31, 2003
represented a net liability to us of approximately $10.4 million
(approximately $11.1 million is recorded in other assets
and $21.5 million is recorded in other liabilities) and, as of
December 31, 2002, was approximately $18.6 million which is
included in other liabilities. The entire net market value is
also included in accumulated other comprehensive income. No
hedge ineffectiveness has been recorded in earnings as these
swaps were perfectly effective. As of March 5, 2004, the
net market value of these forward-starting interest rate swaps
represented a net liability to us of approximately
$64.9 million. The market value of the forward-starting
interest rate swaps is dependent upon existing market interest
rates and swap spreads, which change over time. If the market
interest rates were 50 basis points higher, the value of the
swaps would have been approximately $41.4 million and
$33.3 million at December 31, 2003 and 2002,
respectively. If the market interest rates were 50 basis points
lower, our liability under these swaps would have been
approximately $65.0 million and $60.5 million at
December 31, 2003 and 2002, respectively.

Upon settlement of the swaps, we may be obligated
to pay the counterparties a settlement payment, or alternatively
to receive settlement proceeds from the counterparties. In
accordance with FASB Statement No. 133 Accounting for
Derivative Instruments and Hedging Activities,if the swaps
are deemed to be effective hedges upon settlement, any monies
paid or received will be amortized to interest expense over the
term of the respective hedged interest payments. If the swaps
are deemed to be only partially effective hedges upon
settlement, a portion of the monies paid or received will be
immediately recognized in earnings and the remainder will be
amortized to interest expense over the term of the respective
hedged interest payments. If the swaps are deemed to be
completely ineffective hedges upon settlement, any monies paid
or received will be immediately recognized in earnings.

Capital Improvements, Tenant Improvements and
Leasing Costs

Capital Improvements

Significant renovations and improvements, which
improve or extend the useful life of our Properties are
capitalized. We categorize these capital expenditures as follows:



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

The table below details the costs incurred for
each type of improvement.

|                      |                        |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |         |             |  |   |         |         |  |   |         |         | 
|--------------------- | ---------------------- | -------------------------------- | - | -------------- | ----------- |  | - | ------------ | -------------- |  | ----------- | ------ | ------- | -------------- | - | ------- | ----------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                      |                        |                                 
|                      |                        | For the years ended December 31, |  
|                      |                        |                                  |  
|                      |                        |                                  |   |                |             | 
|                      |                        | 2003                             |   |                | 2002        |  |   | 2001         |               
|                      |                        |                                  |   |                |             |  |   |              |               
|                      |                        |                                  |   | Unconsolidated |             |  |   |              | Unconsolidated |  |             |        |         | Unconsolidated |  
|                      |                        | Consolidated                     |   |                | Properties  |  |   | Consolidated |                |  | Properties  |        |         | Consolidated   |   |         | Properties  | 
|                      |                        | Properties                       |   |                | (our share) |  |   | Properties   |                |  | (our share) |        |         | Properties     |   |         | (our share) | 
|                      |                        |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |         |             | 
|                      |                        |                                 
|                      |                        | (Dollars in thousands)           |  
|Capital Improvements: |                        |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |         |             |  |   |         |         |  |   |        
|                      | Capital improvements   |                                  | $ | 64,052         |             |  | $ | 9,222        |                |  | $           | 46,662 |         |                | $ | 4,544   |             |  | $ | 67,536  |         |  | $ | 4,577   |        
|                      | Development costs      |                                  |   | 96,736         |             |  |   | 5,538        |                |  |             | 92,214 |         |                |   | 110,244 |             |  |   | 141,776 |         |  |   | 105,370 |        
|                      | Redevelopment costs(a) |                                  |   | 8,391          |             |  |   |             |                |  |             | 32,976 |         |                |   |        |             |  |   | 17,308  |         |  |   |        |        
|                      |                        |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |         |             | 
|                      |                        | Total capital improvements       |   | $              | 169,179     |  |   | $            | 14,760         |  |             | $      | 171,852 |                |   | $       | 114,788     |  |   | $       | 226,620 |  |   | $       | 109,947 | 
|                      |                        |                                  |   |                |             |  |   |              |                |  |             |        |         |                |   |         |             | 

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---



|    |                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Properties included in redevelopment costs for
    2003 are the Tabor Center, the Polk and Taylor Buildings and
    Worldwide Plaza (amenities area). Redevelopments for 2002
    included the 500-600 City Parkway, the Tabor Center, the Polk
    and Taylor Buildings and Worldwide Plaza (amenities area).
    Redevelopments for 2001 included US Bancorp, 100 Summer and the
    Tabor Center.

Tenant Improvements and Leasing
Costs

Costs related to the renovation, alteration or
build-out of existing office space, as well as related leasing
costs, are capitalized and depreciated or amortized over the
lease term. These tenant improvements may include, but are not
limited to, floor coverings, ceilings, walls, HVAC, mechanical,
electrical, plumbing and fire protection systems.

The amounts shown below represent the total
tenant improvement and leasing costs for leases which commenced
during the period, regardless of when such costs were actually
paid.

|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       |  | 
|---------------------------------------- | --------------------- | ----------------------------------------------------- | ------- | ---------- | ----------- | - | ----- | ----------- | ---------- | - | ----------- |  |  | ----------- | ----- |  | ----------- | - | ------- |  |  | - | ----- |  | 
|                                         |                       |                                                      
|                                         |                       | For the years ended December 31,                      |        
|                                         |                       |                                                       |        
|                                         |                       |                                                       |         |            |             |  
|                                         |                       | 2003                                                  |         |            | 2002        |   |       | 2001        |           
|                                         |                       |                                                       |         |            |             |   |       |             |           
|                                         |                       |                                                       |         | Total Cost |             |   |       |             | Total Cost |   |             |  |  | Total Cost  |      
|                                         |                       |                                                       |         | per Square |             |   |       |             | per Square |   |             |  |  | per Square  |      
|                                         |                       | Total Costs                                           |         |            | Foot Leased |   |       | Total Costs |            |   | Foot Leased |  |  | Total Costs |       |  | Foot Leased |  
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|                                         |                       |                                                      
|                                         |                       | (Dollars in thousands except per square foot amounts) |        
|Consolidated Properties:                 |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Office Properties:                       |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       | 
|Renewals                                 |                       | $                                                     | 128,673 |            |             | $ | 13.07 |             |            | $ | 69,710      |  |  | $           | 8.14  |  |             | $ | 34,729  |  |  | $ | 6.71  | 
|Retenanted                               |                       |                                                       | 248,364 |            |             |   | 24.31 |             |            |   | 183,231     |  |  |             | 18.43 |  |             |   | 126,845 |  |  |   | 16.73 | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Total/ Weighted Average                  |                       | $                                                     | 377,037 |            |             | $ | 18.79 |             |            | $ | 252,941     |  |  | $           | 13.67 |  |             | $ | 161,574 |  |  | $ | 12.67 | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Industrial Properties:                   |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       | 
|Renewals                                 |                       | $                                                     | 1,153   |            |             | $ | 3.10  |             |            | $ | 2,540       |  |  | $           | 2.13  |  |             |   |        |  |  |   |      | 
|Retenanted                               |                       |                                                       | 2,213   |            |             |   | 3.78  |             |            |   | 1,153       |  |  |             | 3.66  |  |             |   | 110     |  |  |   | 8.31  | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Total/ Weighted Average                  |                       | $                                                     | 3,366   |            |             | $ | 3.51  |             |            | $ | 3,693       |  |  | $           | 2.45  |  |             | $ | 110     |  |  | $ | 8.31  | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Unconsolidated Joint
    Ventures(a):    |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Renewals                                 |                       | $                                                     | 17,936  |            |             | $ | 24.09 |             |            | $ | 2,203       |  |  | $           | 7.80  |  |             | $ | 1,398   |  |  | $ | 5.42  | 
|Retenanted                               |                       |                                                       | 8,026   |            |             |   | 23.21 |             |            |   | 4,265       |  |  |             | 14.07 |  |             |   | 5,297   |  |  |   | 13.14 | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Total/ Weighted Average                  |                       | $                                                     | 25,962  |            |             | $ | 23.81 |             |            | $ | 6,468       |  |  | $           | 11.05 |  |             | $ | 6,695   |  |  | $ | 10.13 | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Total Properties (renewals
    and       |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|                                         | retenanted combined): |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |   |         |  |  |   |       |  | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Office (consolidated and unconsolidated) |                       | $                                                     | 402,999 |            |             | $ | 19.05 |             |            | $ | 259,409     |  |  | $           | 13.59 |  |             | $ | 168,269 |  |  | $ | 12.54 | 
|Industrial                               |                       |                                                       | 3,366   |            |             |   | 3.51  |             |            |   | 3,693       |  |  |             | 2.45  |  |             |   | 110     |  |  |   | 8.31  | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  
|Total/ Weighted Average                  |                       | $                                                     | 406,365 |            |             | $ | 18.38 |             |            | $ | 263,102     |  |  | $           | 12.77 |  |             | $ | 168,379 |  |  | $ | 12.54 | 
|                                         |                       |                                                       |         |            |             |   |       |             |            |   |             |  |  |             |       |  |             |  



---



|    |                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents our share of unconsolidated joint
    venture tenant improvement and leasing costs. All joint venture
    information included above is from office properties.

During 2003, we saw evidence suggesting that
contract rents may have begun to stabilize. Tenant improvements
and leasing costs, however, have increased significantly due to
competitive market conditions for new leases. This has had the
effect of reducing net effective rents (contract rents reduced
by the impact of tenant improvement costs, leasing commissions
and any free rent periods) on lease renewals and retenanted
space. This adverse trend may continue until market conditions
improve.

45



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##### Table of Contents



The above information includes capital
improvements, tenant improvements and leasing costs incurred for
leases which commenced during the period shown. The amounts
included in the consolidated statement of cash flows represent
the cash expenditures made during the period. The differences
between these amounts represent timing differences between the
lease commencement dates and the dates of the cash expenditures.
In addition, the figures below include expenditures for
corporate furniture, fixtures and equipment, software, leasehold
improvements and other. The reconciliation between the amounts
above for the consolidated properties and the amounts disclosed
in the consolidated statements of cash flows is as follows:

|                                                                                                                    |                       |                                  |         |         |      |   |         |         |  |   |         |         | 
|------------------------------------------------------------------------------------------------------------------- | --------------------- | -------------------------------- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                                                                                                    |                       |                                 
|                                                                                                                    |                       | For the years ended December 31, |        
|                                                                                                                    |                       |                                  |        
|                                                                                                                    |                       | 2003                             |         |         | 2002 |   |         | 2001    | 
|                                                                                                                    |                       |                                  |         |         |      |   |         |         | 
|                                                                                                                    |                       |                                 
|                                                                                                                    |                       | (Dollars in thousands)           |        
|Total capital improvements                                                                                          |                       | $                                | 169,179 |         |      | $ | 171,852 |         |  | $ | 226,620 |        
|Tenant improvements and leasing
    costs:                                                                          |                       |                                  |         |         |      |   |         |         |  |   |         |        
|                                                                                                                    | Office Properties     |                                  |         | 377,037 |      |   |         | 252,941 |  |   |         | 161,574 | 
|                                                                                                                    | Industrial Properties |                                  |         | 3,366   |      |   |         | 3,693   |  |   |         | 110     | 
|Expenditures for corporate furniture, fixtures
    and equipment, software, leasehold improvements and other        |                       |                                  | 32,397  |         |      |   | 5,251   |         |  |   | 34,294  |        
|Timing differences                                                                                                  |                       |                                  | (4,399  | )       |      |   | (93     | )       |  |   | 15,106  |        
|                                                                                                                    |                       |                                  |         |         |      |   |         |         | 
|Total capital improvements, tenant improvements
    and leasing costs                                               |                       | $                                | 577,580 |         |      | $ | 433,644 |         |  | $ | 437,704 |        
|                                                                                                                    |                       |                                  |         |         |      |   |         |         | 
|Capital and tenant improvements from consolidated
    statement of cash flows                                       |                       | $                                | 435,308 |         |      | $ | 328,930 |         |  | $ | 360,065 |        
|Lease commissions and other costs from
    consolidated statement of cash flows                                     |                       |                                  | 142,272 |         |      |   | 104,714 |         |  |   | 77,639  |        
|                                                                                                                    |                       |                                  |         |         |      |   |         |         | 
|Total capital improvements, tenant improvements
    and leasing costs from the consolidated statement of cash flows |                       | $                                | 577,580 |         |      | $ | 433,644 |         |  | $ | 437,704 |        
|                                                                                                                    |                       |                                  |         |         |      |   |         |         | 

Developments

We own directly several properties in various
stages of development or pre-development. These developments are
funded by working capital and our line of credit. Specifically
identifiable direct acquisition, development and construction
costs are capitalized, including, where applicable, salaries and
related costs, real estate taxes and interest incurred in
developing the property. The properties under development and
all figures stated below are as of December 31, 2003.

|                            |  |                        |         |  |          |        |                 |           |  |        |       |  |             |       |         |           |           |   |            |        |  |   |         |  |  |  |     | 
|--------------------------- |  | ---------------------- | ------- |  | -------- | ------ | --------------- | --------- |  | ------ | ----- |  | ----------- | ----- | ------- | --------- | --------- | - | ---------- | ------ |  | - | ------- |  |  |  | --- | 
|                            |  |                        |         |  |          | Number |                 |           |  |        | Costs |  |             | Total |         |           | Current   |  
|                            |  | Estimated Placed       |         |  |          |        | of              |           |  | Square |       |  | Incurred To |       |         | Estimated |           |   | Percentage |       
|Wholly-Owned                |  | in Service Date(a)     |         |  | Location |        |                 | Buildings |  |        | Feet  |  |             | Date  |         |           | Costs (b) |   |            | Leased | 
|                            |  |                        |         |  |          |        |                 |           |  |        |       |  |             |       |         |           |           |   |            |        | 
|                            |  |                       
|                            |  | (Dollars in thousands) |        
|Douglas Corporate Center II |  |                        | 3Q/2003 |  |          |        | Roseville, CA   |           |  |        | 1     |  |             |       | 108,000 |           |           | $ | 13,604     |        |  | $ | 16,800  |  |  |  | 73% | 
|Kruse Woods V               |  |                        | 4Q/2003 |  |          |        | Lake Oswego, OR |           |  |        | 1     |  |             |       | 184,000 |           |           |   | 30,029     |        |  |   | 33,900  |  |  |  | 59% | 
|Cambridge Science Center    |  |                        | 2Q/2004 |  |          |        | Cambridge, MA   |           |  |        | 1     |  |             |       | 131,000 |           |           |   | 31,599     |        |  |   | 52,400  |  |  |  | 19% | 
|                            |  |                        |         |  |          |        |                 |           |  |        |       |  |             |       |         |           |           |   |            |        | 
|                            |  |                        |         |  |          |        |                 |           |  |        | 3     |  |             |       | 423,000 |           |           | $ | 75,232     |        |  | $ | 103,100 |  |  |  | 50% | 
|                            |  |                        |         |  |          |        |                 |           |  |        |       |  |             |       |         |           |           |   |            |        | 



---



|    |                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The Estimated Placed in Service Date represents
    the date the certificate of occupancy was or is currently
    anticipated to be obtained. Subsequent to obtaining the
    certificate of occupancy, the property is expected to undergo a
    lease-up period.                                                      
|   
|(b) | The Total Estimated Costs represent 100% of the
    developments estimated costs, including the acquisition
    cost of the land and building, if any. The Total Estimated Costs
    are subject to change upon, or prior to, the completion of the
    development and include amounts required to lease the property.

46



---



##### Table of Contents



In addition to the developments described above,
we own or have under option various land parcels available for
development. These sites represent possible future development
of up to approximately 12 million square feet of office
space. These developments will be impacted by the timing and
likelihood of success of the entitlement process, both of which
are uncertain. These various sites include, among others: Russia
Wharf, Boston, MA; Reston Town Center, Reston, VA; Prominence in
Buckhead, Atlanta, GA; Perimeter Center, Atlanta, GA; Tabor
Center, Denver, CO; Bridge Pointe Corporate Centre, San Diego,
CA; La Jolla Centre, San Diego, CA; Orange Center, Orange, CA;
Waters Edge, Los Angeles, CA; Skyport Plaza, San Jose, CA;
Foundry Square I, San Francisco, CA; San Rafael Corporate
Center, San Rafael, CA; Station Landing, Walnut Creek, CA;
Parkshore Plaza, Folsom, CA; City Center Bellevue; Bellevue, WA;
and 8th Street, Bellevue, WA.

Subsequent Events

See Note 26  Subsequent Events
for transactions that occurred subsequent to December 31,
2003 through March 5, 2004.

Inflation

Substantially all of our office leases require
the tenant to pay, as additional rent, a portion of real estate
taxes and operating expenses. In addition, many of our office
leases provide for fixed increases in base rent or indexed
escalations (based on the Consumer Price Index or other
measures). We believe that the majority of inflationary
increases in expenses will be offset, in part, by the expense
reimbursements and contractual rent increases described above.

Funds From Operations
(FFO)

FFO is a non-GAAP financial measure. We believe
FFO, as defined by the Board of Governors of the National
Association of Real Estate Investment Trusts
(NAREIT), to be an appropriate measure of
performance for a real estate company, for the reasons, and
subject to the qualifications, specified in footnote
(a) below. The following table reflects the reconciliation
of FFO to net income, the most directly comparable GAAP measure,
for the periods presented:

47



---



##### Table of Contents



|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |       |   |                 |   |              |         |  |   |                 |              |  |         |         |   |                 |   |       |   |  |  |          |   |  |   |       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------- | --------- | ------------ | --------------- | - | ----- | ------- | ------------ | - | --------------- | - |  | ------------ | ----- | - | --------------- | - | ------------ | ------- |  | - | --------------- | ------------ |  | ------- | ------- | - | --------------- | - | ----- | - |  |  | -------- | - |  | - | ----- | -
|                                                                                                                                                                                                                                  |  |                                                
|                                                                                                                                                                                                                                  |  | For the years ended December 31,                |          
|                                                                                                                                                                                                                                  |  |                                                 |          
|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |  
|                                                                                                                                                                                                                                  |  | 2003                                            |           |              | 2002            |   |       | 2001    |              |   | 2000            |   |  | 1999         |      
|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |      
|                                                                                                                                                                                                                                  |  |                                                 |           | Per Weighted |                 |   |       |         | Per Weighted |   |                 |   |  | Per Weighted |       |   |                 |   | Per Weighted |         |  |   |                 | Per Weighted | 
|                                                                                                                                                                                                                                  |  | Dollars                                         |           |              | Average Unit(b) |   |       | Dollars |              |   | Average Unit(b) |   |  | Dollars      |       |   | Average Unit(b) |   |              | Dollars |  |   | Average Unit(b) |              |  | Dollars |         |   | Average Unit(b) |  
|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |       |   |                 |   |              |         |  |   |                 |              |  |         |         |   |                 |  
|                                                                                                                                                                                                                                  |  |                                                
|                                                                                                                                                                                                                                  |  | (Dollars in thousands, except per unit amounts) |          
|Reconciliation of net income to
    FFO(a):                                                                                                                                                                                       |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |       |   |                 |   |              |         |  |   |                 |              |  |         |         |   |                 |   |       |   |  |  |          |   |  |   |       |  
|Net income                                                                                                                                                                                                                        |  | $                                               | 729,214   |              |                 | $ | 1.62  |         |              | $ | 859,420         |   |  | $            | 1.84  |   |                 | $ | 694,431      |         |  | $ | 1.70            |              |  | $       | 530,236 |   |                 | $ | 1.68  |   |  |  | $479,525 |   |  | $ | 1.66  |  
|Real estate related depreciation and amortization
    and net gain on sales of real estate, including our share of
    unconsolidated joint ventures and adjusted for minority
    interests share in partially owned properties |  |                                                 | 596,481   |              |                 |   | 1.32  |         |              |   | 707,697         |   |  |              | 1.51  |   |                 |   | 532,260      |         |  |   | 1.30            |              |  |         | 424,845 |   |                 |   | 1.34  |   |  |  | 308,829  |   |  |   | 1.07  |  
|Extraordinary item                                                                                                                                                                                                                |  |                                                 |          |              |                 |   |      |         |              |   |                |   |  |              |      |   |                 |   | 1,000        |         |  |   |                |              |  |         |        |   |                 |   |      |   |  |  |         |   |  |   |      |  
|Cumulative effect of a change in accounting
    principle                                                                                                                                                                         |  |                                                 |          |              |                 |   |      |         |              |   |                |   |  |              |      |   |                 |   | 1,142        |         |  |   |                |              |  |         |        |   |                 |   |      |   |  |  |         |   |  |   |      |  
|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |       |   |                 |   |              |         |  |   |                 |              |  |         |         |   |                 |  
|FFO                                                                                                                                                                                                                               |  |                                                 | 1,325,695 |              |                 |   | 2.94  |         |              |   | 1,567,117       |   |  |              | 3.35  |   |                 |   | 1,228,833    |         |  |   | 3.01            |              |  |         | 955,081 |   |                 |   | 3.02  |   |  |  | 788,354  |   |  |   | 2.73  |  
|Put option settlement                                                                                                                                                                                                             |  |                                                 |          |              |                 |   |      |         |              |   |                |   |  |              |      |   |                 |   | 2,655        |         |  |   | 0.01            |              |  |         | (2,576  | ) |                 |   | (0.01 | ) |  |  | (5,658   | ) |  |   | (0.02 | )
|Preferred distributions                                                                                                                                                                                                           |  |                                                 | (51,872   | )            |                 |   | (0.12 | )       |              |   | (62,573         | ) |  |              | (0.13 | ) |                 |   | (57,041      | )       |  |   | (0.14           | )            |  |         | (43,348 | ) |                 |   | (0.14 | ) |  |  | (43,603  | ) |  |   | (0.15 | )
|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |       |   |                 |   |              |         |  |   |                 |              |  |         |         |   |                 |  
|FFO available to unitholders  basic                                                                                                                                                                                              |  | $                                               | 1,273,823 |              |                 | $ | 2.83  |         |              | $ | 1,504,544       |   |  | $            | 3.22  |   |                 | $ | 1,174,447    |         |  | $ | 2.87            |              |  | $       | 909,157 |   |                 | $ | 2.88  |   |  |  | $739,093 |   |  | $ | 2.56  |  
|                                                                                                                                                                                                                                  |  |                                                 |           |              |                 |   |       |         |              |   |                 |   |  |              |       |   |                 |   |              |         |  |   |                 |              |  |         |         |   |                 |  

|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |   |  |  |             |   |  |   |             |  
|------------------------------------------------------------------------------------------------------- |  | ---------- | ----------- | - | --- | - | ----------- | ---------- |  | - | ----------- | - |  | ---------- | ----------- | - | --- | - | ----------- | ---------- |  | - | ----------- | - |  | ---------- | ----------- | - | --- | - | ----------- | - |  |  | ----------- | - |  | - | ----------- | -
|                                                                                                        |  | Net Income |             |   | FFO |   |             | Net Income |  |   | FFO         |   |  | Net Income |             |   | FFO |   |             | Net Income |  |   | FFO         |   |  | Net Income |             |   | FFO |  
|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |  
|Adjustments to arrive at FFO available to
    unitholders plus assumed conversions:                     |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |   |  |  |             |   |  |   |             |  
|Net income and FFO                                                                                      |  | $          | 729,214     |   |     | $ | 1,325,695   |            |  | $ | 859,420     |   |  | $          | 1,567,117   |   |     | $ | 694,431     |            |  | $ | 1,228,833   |   |  | $          | 530,236     |   |     | $ | 955,081     |   |  |  | $479,525    |   |  | $ | 788,354     |  
|Put option settlement                                                                                   |  |            |            |   |     |   |            |            |  |   |            |   |  |            |            |   |     |   | 2,655       |            |  |   | 2,655       |   |  |            | (2,576      | ) |     |   | (2,576      | ) |  |  | (5,658      | ) |  |   | (5,658      | )
|Preferred distributions                                                                                 |  |            | (51,872     | ) |     |   | (51,872     | )          |  |   | (62,573     | ) |  |            | (62,573     | ) |     |   | (57,041     | )          |  |   | (57,041     | ) |  |            | (43,348     | ) |     |   | (43,348     | ) |  |  | (43,603     | ) |  |   | (43,603     | )
|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |  
|Net income and FFO available to unitholders                                                             |  |            | 677,342     |   |     |   | 1,273,823   |            |  |   | 796,847     |   |  |            | 1,504,544   |   |     |   | 640,045     |            |  |   | 1,174,447   |   |  |            | 484,312     |   |     |   | 909,157     |   |  |  | 430,264     |   |  |   | 739,093     |  
|Preferred distributions on Series B
    preferred units, of which is assumed to be converted into Units |  |            |            |   |     |   | 15,724      |            |  |   |            |   |  |            | 15,724      |   |     |   |            |            |  |   | 15,727      |   |  |            |            |   |     |   | 15,750      |   |  |  |            |   |  |   | 15,750      |  
|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |  
|Net income and FFO available to unitholders plus
    assumed conversions                                |  | $          | 677,342     |   |     | $ | 1,289,547   |            |  | $ | 796,847     |   |  | $          | 1,520,268   |   |     | $ | 640,045     |            |  | $ | 1,190,174   |   |  | $          | 484,312     |   |     | $ | 924,907     |   |  |  | $430,264    |   |  | $ | 754,843     |  
|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |  
|Weighted average Units, dilutive potential units
    plus assumed conversions outstanding               |  |            | 452,561,353 |   |     |   | 460,950,707 |            |  |   | 469,138,720 |   |  |            | 477,528,074 |   |     |   | 411,986,897 |            |  |   | 420,379,753 |   |  |            | 318,997,407 |   |     |   | 327,400,767 |   |  |  | 291,157,204 |   |  |   | 299,560,564 |  
|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |  
|Net income and FFO available to unitholders plus
    assumed conversions per unit                       |  | $          | 1.50        |   |     | $ | 2.80        |            |  | $ | 1.70        |   |  | $          | 3.18        |   |     | $ | 1.55        |            |  | $ | 2.83        |   |  | $          | 1.52        |   |     | $ | 2.82        |   |  |  | $1.48       |   |  | $ | 2.52        |  
|                                                                                                        |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |   |             |            |  |   |             |   |  |            |             |   |     |  

|                                                                                                                                                                    |  |                            |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- |  |  |  |  | ----------- |  |  |  |  |  |  |  | ----------- |  |  |  |  |  |  |  | ----------- |  |  |  |  |  |  |  | ----------- |  |  |  |  |  |  |  | ----------- | 
|                                                                                                                                                                    |  |                           
|                                                                                                                                                                    |  | Units and unit equivalents | 
|                                                                                                                                                                    |  |                            | 
|Weighted average Units outstanding (used for both
    net income and FFO basic calculation)                                                                         |  |                            |  |  |  |  | 450,594,465 |  |  |  |  |  |  |  | 467,134,774 |  |  |  |  |  |  |  | 408,919,582 |  |  |  |  |  |  |  | 316,067,694 |  |  |  |  |  |  |  | 288,326,547 | 
|Impact of options, restricted shares and put
    options which are dilutive to both net income and FFO                                                              |  |                            |  |  |  |  | 1,966,888   |  |  |  |  |  |  |  | 2,003,946   |  |  |  |  |  |  |  | 3,067,315   |  |  |  |  |  |  |  | 2,929,713   |  |  |  |  |  |  |  | 2,830,657   | 
|                                                                                                                                                                    |  |                            |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  | 
|Weighted average Units and dilutive potential
    units used for net income available to unitholders                                                                |  |                            |  |  |  |  | 452,561,353 |  |  |  |  |  |  |  | 469,138,720 |  |  |  |  |  |  |  | 411,986,897 |  |  |  |  |  |  |  | 318,997,407 |  |  |  |  |  |  |  | 291,157,204 | 
|Impact of conversion of Series B preferred
    units, which are dilutive to FFO, but not net income                                                                 |  |                            |  |  |  |  | 8,389,354   |  |  |  |  |  |  |  | 8,389,354   |  |  |  |  |  |  |  | 8,392,856   |  |  |  |  |  |  |  | 8,403,360   |  |  |  |  |  |  |  | 8,403,360   | 
|                                                                                                                                                                    |  |                            |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  | 
|Weighted average Units, dilutive potential units
    plus assumed conversions used for the calculation of FFO
    available to unitholders plus assumed conversions |  |                            |  |  |  |  | 460,950,707 |  |  |  |  |  |  |  | 477,528,074 |  |  |  |  |  |  |  | 420,379,753 |  |  |  |  |  |  |  | 327,400,767 |  |  |  |  |  |  |  | 299,560,564 | 
|                                                                                                                                                                    |  |                            |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  |  |             |  |  |  |  |  |  | 



---



|    |  |                                                                                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------
|(a) |  | FFO is a non-GAAP financial measure. The most
    directly comparable GAAP measure is net income, to which it is
    reconciled.
|   
|(b) |  | FFO per unit may not total the sum of the per
    unit components in the reconciliation due to rounding.                        

48



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##### Table of Contents



FFO Definition

FFO is defined as net income, computed in
accordance with accounting principles generally accepted in the
United States (GAAP), excluding gains or losses from
sales of properties, plus real estate related depreciation and
amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect funds
from operations on the same basis. We believe that FFO is
helpful to investors as one of several measures of the
performance of a real estate company. We further believe that by
excluding the effect of depreciation, amortization and gains or
losses from sales of real estate, all of which are based on
historical costs and which may be of limited relevance in
evaluating current performance, FFO can facilitate comparisons
of operating performance between periods and between other real
estate companies. Investors should review FFO, along with GAAP
net income and cash flow from operating activities, investing
activities and financing activities, when trying to understand a
real estate companys operating performance. We compute FFO
in accordance with standards established by NAREIT, which may
not be comparable to FFO reported by other real estate companies
that do not define the term in accordance with the current
NAREIT definition or that interpret the current NAREIT
definition differently than we do. FFO does not represent cash
generated from operating activities in accordance with GAAP, nor
does it represent cash available to pay distributions and should
not be considered as an alternative to net income, determined in
accordance with GAAP, as an indication of our financial
performance, or to cash flow from operating activities,
determined in accordance with GAAP, as a measure of our
liquidity, nor is it indicative of funds available to fund our
cash needs, including our ability to make cash distributions.




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

Quantitative and qualitative disclosures about
market risk are incorporated herein by reference from
Item 7.  Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Market Risk.

49



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##### Table of Contents






Item 8.     Financial
Statements and Supplementary Data.

REPORT OF INDEPENDENT AUDITORS

The Partners of EOP Operating Limited Partnership

We have audited the accompanying consolidated
balance sheets of EOP Operating Limited Partnership (EOP
Partnership) as of December 31, 2003 and 2002, and
the related consolidated statements of operations,
partners capital, net comprehensive income and cash flows
for each of the three years in the period ended
December 31, 2003. Our audits also included the financial
statement schedule listed in the Index at Item 15(a). These
financial statements and the schedule are the responsibility of
EOP Partnerships management. Our responsibility is to
express an opinion on these financial statements and the
schedule based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of EOP Partnership at
December 31, 2003 and 2002, and the consolidated results of
its operations and its cash flows for each of the three years in
the period ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements
taken as a whole, presents fairly in all material respects the
information set forth therein.

As discussed in Note 2 to the consolidated
financial statements, in 2003 EOP Partnership changed its method
of accounting for stock-based employee compensation. In
addition, in 2002 EOP Partnership changed its method of
accounting for discontinued operations.



| |                  
| | -----------------
| | ERNST & YOUNG LLP

Chicago, Illinois

February 5, 2004, except for Note 26


as to which the date is March 5, 2004


50



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS


|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |            |            |            |            |            |            | 
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                    
|                                                                                                   |                                                                                                                                       | December 31,                                                                                                                                        |                                                                                                                                                            
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                            
|                                                                                                   |                                                                                                                                       | 2003                                                                                                                                                |                                                                                                                                                             |                                                                                                         | 2002       |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                    
|                                                                                                   |                                                                                                                                       | (Dollars in thousands,                                                                                                                              |                                                                                                                                                            
|                                                                                                   |                                                                                                                                       | except per unit amounts)                                                                                                                            |                                                                                                                                                            
|Assets:                                                                                            |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |            |            |           
|                                                                                                   | Investments in real estate                                                                                                            |                                                                                                                                                     | $                                                                                                                                                           | 23,985,839                                                                                              |            |            | $          | 24,625,927 |           
|                                                                                                   | Developments in process                                                                                                               |                                                                                                                                                     |                                                                                                                                                             | 75,232                                                                                                  |            |            |            | 284,737    |           
|                                                                                                   | Land available for development                                                                                                        |                                                                                                                                                     |                                                                                                                                                             | 251,151                                                                                                 |            |            |            | 252,852    |           
|                                                                                                   | Accumulated depreciation                                                                                                              |                                                                                                                                                     |                                                                                                                                                             | (2,578,082                                                                                              | )          |            |            | (2,077,613 | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   |                                                                                                                                       | Investments in real estate, net of accumulated
    depreciation                                                                                     |                                                                                                                                                             |                                                                                                         | 21,734,140 |            |            |            | 23,085,903 |           
|                                                                                                   | Cash and cash equivalents                                                                                                             |                                                                                                                                                     |                                                                                                                                                             | 69,398                                                                                                  |            |            |            | 58,471     |           
|                                                                                                   | Tenant and other receivables (net of allowance
    for doubtful accounts of $6,490 and $11,695, respectively)                         |                                                                                                                                                     |                                                                                                                                                             | 79,880                                                                                                  |            |            |            | 77,597     |           
|                                                                                                   | Deferred rent receivable                                                                                                              |                                                                                                                                                     |                                                                                                                                                             | 379,329                                                                                                 |            |            |            | 331,932    |           
|                                                                                                   | Escrow deposits and restricted cash                                                                                                   |                                                                                                                                                     |                                                                                                                                                             | 75,186                                                                                                  |            |            |            | 29,185     |           
|                                                                                                   | Investments in unconsolidated joint ventures                                                                                          |                                                                                                                                                     |                                                                                                                                                             | 1,127,232                                                                                               |            |            |            | 1,087,815  |           
|                                                                                                   | Deferred financing costs (net of accumulated
    amortization of $48,176 and $48,801, respectively)                                   |                                                                                                                                                     |                                                                                                                                                             | 64,337                                                                                                  |            |            |            | 67,151     |           
|                                                                                                   | Deferred leasing costs and other related
    intangibles (net of accumulated amortization of $157,445 and
    $115,710, respectively) |                                                                                                                                                     |                                                                                                                                                             | 314,568                                                                                                 |            |            |            | 235,002    |           
|                                                                                                   | Prepaid expenses and other assets (net of
    discounts of $66,200 and $66,557, respectively)                                         |                                                                                                                                                     |                                                                                                                                                             | 344,940                                                                                                 |            |            |            | 273,727    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Total Assets                                                                                                                                                |                                                                                                         | $          | 24,189,010 |            |            | $          | 25,246,783 |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|Liabilities, Minority Interests, Mandatorily
    Redeemable Preferred Units and Partners Capital: |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |            |            |           
|Liabilities:                                                                                       |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |            |            |           
|                                                                                                   | Mortgage debt (including a net discount of
    $(13,663) and $(12,584), respectively)                                                 |                                                                                                                                                     | $                                                                                                                                                           | 2,315,889                                                                                               |            |            | $          | 2,507,890  |           
|                                                                                                   | Unsecured notes (including a net premium of
    $12,412 and $41,151, respectively)                                                    |                                                                                                                                                     |                                                                                                                                                             | 8,828,912                                                                                               |            |            |            | 9,057,651  |           
|                                                                                                   | Line of credit                                                                                                                        |                                                                                                                                                     |                                                                                                                                                             | 334,000                                                                                                 |            |            |            | 205,700    |           
|                                                                                                   | Accounts payable and accrued expenses                                                                                                 |                                                                                                                                                     |                                                                                                                                                             | 573,069                                                                                                 |            |            |            | 560,101    |           
|                                                                                                   | Distribution payable                                                                                                                  |                                                                                                                                                     |                                                                                                                                                             | 3,899                                                                                                   |            |            |            | 5,654      |           
|                                                                                                   | Other liabilities                                                                                                                     |                                                                                                                                                     |                                                                                                                                                             | 398,273                                                                                                 |            |            |            | 391,963    |           
|                                                                                                   | Commitments and contingencies                                                                                                         |                                                                                                                                                     |                                                                                                                                                             |                                                                                                        |            |            |            |           |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Total Liabilities                                                                                                                                           |                                                                                                         |            | 12,454,042 |            |            |            | 12,728,959 |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   | Minority interests  partially owned
    properties                                                                                   |                                                                                                                                                     |                                                                                                                                                             | 183,863                                                                                                 |            |            |            | 185,809    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   | Mandatorily Redeemable Preferred Units:                                                                                               |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |            |            |            |           
|                                                                                                   |                                                                                                                                       | 5.25% Series B Convertible, Cumulative
    Redeemable Preferred Units, liquidation preference
    $50.00 per unit, 5,990,000 issued and outstanding |                                                                                                                                                             |                                                                                                         | 299,500    |            |            |            | 299,500    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   | Partners Capital:                                                                                                                    |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |            |            |            |           
|                                                                                                   |                                                                                                                                       | Preferred Units, 100,000,000 authorized:                                                                                                            |                                                                                                                                                             |                                                                                                         |            |            |            |            |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 8.625% Series C Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    4,562,900 issued and outstanding                     |                                                                                                         |            | 114,073    |            |            |            | 114,073    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 7.875% Series E Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0
    and 6,000,000 issued and outstanding, respectively |                                                                                                         |            |           |            |            |            | 150,000    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 8.0% Series F Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit, 0
    and 4,000,000 issued and outstanding, respectively   |                                                                                                         |            |           |            |            |            | 100,000    |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | 7.75% Series G Cumulative Redeemable
    Preferred Units, liquidation preference $25.00 per unit,
    8,500,000 issued and outstanding                      |                                                                                                         |            | 212,500    |            |            |            | 212,500    |           
|                                                                                                   |                                                                                                                                       | Other Partners Capital:                                                                                                                            |                                                                                                                                                             |                                                                                                         |            |            |            |            |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | General Partners Capital                                                                                                                                    |                                                                                                         |            | 85,086     |            |            |            | 89,650     |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Limited Partners Capital                                                                                                                                    |                                                                                                         |            | 10,855,488 |            |            |            | 11,399,979 |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Deferred compensation                                                                                                                                       |                                                                                                         |            | (5,889     | )          |            |            | (15,472    | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     | Accumulated other comprehensive loss                                                                                                                        |                                                                                                         |            | (9,653     | )          |            |            | (18,215    | )         
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             | Total Partners Capital                                                                                 |            |            | 11,251,605 |            |            |            | 12,032,515 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             | Total Liabilities, Minority Interests,
    Mandatorily Redeemable Preferred Units and Partners Capital |            | $          | 24,189,010 |            |            | $          | 25,246,783 | 
|                                                                                                   |                                                                                                                                       |                                                                                                                                                     |                                                                                                                                                             |                                                                                                         |            |           

See accompanying notes.

51



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF
OPERATIONS


|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |           |             |          |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------------------------- | -------------------------------------------------------------------- | -------------------------- | ---------------- | -------- | --------- | --------- | ----------- | -------- | --------- | --------- | ----------- | -------- | --------- | --------- | 
|                                                                                                                                                                    |                                                |                                                                    
|                                                                                                                                                                    |                                                | For the years ended December 31,                                    |                                                                     
|                                                                                                                                                                    |                                                |                                                                     |                                                                     
|                                                                                                                                                                    |                                                | 2003                                                                |                                                                      |                            | 2002             |          |           | 2001      |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                |                                                                    
|                                                                                                                                                                    |                                                | (Dollars in thousands,                                              |                                                                     
|                                                                                                                                                                    |                                                | except per unit amounts)                                            |                                                                     
|Revenues:                                                                                                                                                           |                                                |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |          
|                                                                                                                                                                    | Rental                                         |                                                                     | $                                                                    | 2,536,774                  |                  |          | $         | 2,616,884 |             |          | $         | 2,325,332 |            
|                                                                                                                                                                    | Tenant reimbursements                          |                                                                     |                                                                      | 442,599                    |                  |          |           | 483,714   |             |          |           | 432,078   |            
|                                                                                                                                                                    | Parking                                        |                                                                     |                                                                      | 111,455                    |                  |          |           | 113,151   |             |          |           | 123,207   |            
|                                                                                                                                                                    | Other                                          |                                                                     |                                                                      | 88,943                     |                  |          |           | 130,110   |             |          |           | 70,444    |            
|                                                                                                                                                                    | Fee income                                     |                                                                     |                                                                      | 15,861                     |                  |          |           | 15,907    |             |          |           | 15,085    |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      | Total revenues             |                  |          | 3,195,632 |           |             |          | 3,359,766 |           |             |          | 2,966,146 |          
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Expenses:                                                                                                                                                           |                                                |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |          
|                                                                                                                                                                    | Depreciation                                   |                                                                     |                                                                      | 650,235                    |                  |          |           | 611,038   |             |          |           | 512,126   |            
|                                                                                                                                                                    | Amortization                                   |                                                                     |                                                                      | 65,313                     |                  |          |           | 51,837    |             |          |           | 41,202    |            
|                                                                                                                                                                    | Real estate taxes                              |                                                                     |                                                                      | 351,537                    |                  |          |           | 360,488   |             |          |           | 331,182   |            
|                                                                                                                                                                    | Insurance                                      |                                                                     |                                                                      | 29,973                     |                  |          |           | 39,626    |             |          |           | 20,461    |            
|                                                                                                                                                                    | Repairs and maintenance                        |                                                                     |                                                                      | 335,529                    |                  |          |           | 339,556   |             |          |           | 289,347   |            
|                                                                                                                                                                    | Property operating                             |                                                                     |                                                                      | 409,540                    |                  |          |           | 409,025   |             |          |           | 367,632   |            
|                                                                                                                                                                    | Ground rent                                    |                                                                     |                                                                      | 20,287                     |                  |          |           | 20,325    |             |          |           | 16,692    |            
|                                                                                                                                                                    | Corporate general and administrative           |                                                                     |                                                                      | 62,479                     |                  |          |           | 65,790    |             |          |           | 42,321    |            
|                                                                                                                                                                    | Impairment                                     |                                                                     |                                                                      | 7,500                      |                  |          |           |          |             |          |           | 135,220   |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      | Total expenses             |                  |          | 1,932,393 |           |             |          | 1,897,685 |           |             |          | 1,756,183 |          
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            | Operating income |          |           | 1,263,239 |             |          |           | 1,462,081 |             |          |           | 1,209,963 | 
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Other income/expense:                                                                                                                                               |                                                |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |          
|                                                                                                                                                                    | Interest/dividend income                       |                                                                     |                                                                      | 12,583                     |                  |          |           | 22,148    |             |          |           | 40,015    |            
|                                                                                                                                                                    | Realized gain on sale of marketable securities |                                                                     |                                                                      | 9,286                      |                  |          |           |          |             |          |           |          |            
|                                                                                                                                                                    | Interest:                                      |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |           |            
|                                                                                                                                                                    |                                                |                                                                     | Expense incurred                                                     |                            |                  | (820,359 | )         |           |             | (809,681 | )         |           |             | (727,560 | )        
|                                                                                                                                                                    |                                                |                                                                     | Amortization of deferred financing costs and
    prepayment expenses |                            |                  | (6,976   | )         |           |             | (4,964   | )         |           |             | (15,026  | )        
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                |                                                                     |                                                                      | Total other income/expense |                  |          | (805,466  | )         |             |          | (792,497  | )         |             |          | (702,571  | )        
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and net gain on sales of real estate |                                                |                                                                     | 457,773                                                              |                            |                  |          | 669,584   |           |             |          | 507,392   |          
|Income taxes                                                                                                                                                        |                                                |                                                                     | (5,373                                                               | )                          |                  |          | (9,126    | )         |             |          | (8,745    | )        
|Minority interests  partially owned
    properties                                                                                                                 |                                                |                                                                     | (8,116                                                               | )                          |                  |          | (7,200    | )         |             |          | (8,685    | )        
|Income from investments in unconsolidated joint
    ventures                                                                                                        |                                                |                                                                     | 79,882                                                               |                            |                  |          | 106,852   |           |             |          | 69,203    |          
|Net gain on sales of real estate                                                                                                                                    |                                                |                                                                     | 99,110                                                               |                            |                  |          |          |           |             |          | 81,662    |          
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Income from continuing operations                                                                                                                                   |                                                |                                                                     | 623,276                                                              |                            |                  |          | 760,110   |           |             |          | 640,827   |          
|Discontinued operations (including net gain on
    sales of real estate of $61,953, $17,926 and $0, respectively)                                                   |                                                |                                                                     | 105,938                                                              |                            |                  |          | 99,310    |           |             |          | 55,746    |          
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Income before extraordinary item and cumulative
    effect of change in accounting principle                                                                        |                                                |                                                                     | 729,214                                                              |                            |                  |          | 859,420   |           |             |          | 696,573   |          
|Extraordinary item                                                                                                                                                  |                                                |                                                                     |                                                                     |                            |                  |          |          |           |             |          | (1,000    | )        
|Cumulative effect of change in accounting
    principle                                                                                                             |                                                |                                                                     |                                                                     |                            |                  |          |          |           |             |          | (1,142    | )        
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Net income                                                                                                                                                          |                                                |                                                                     | 729,214                                                              |                            |                  |          | 859,420   |           |             |          | 694,431   |          
|Put option settlement                                                                                                                                               |                                                |                                                                     |                                                                     |                            |                  |          |          |           |             |          | 2,655     |          
|Preferred distributions                                                                                                                                             |                                                |                                                                     | (51,872                                                              | )                          |                  |          | (62,573   | )         |             |          | (57,041   | )        
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Net income available to unitholders                                                                                                                                 |                                                | $                                                                   | 677,342                                                              |                            |                  | $        | 796,847   |           |             | $        | 640,045   |          
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Earnings per unit  basic:                                                                                                                                          |                                                |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |          
|                                                                                                                                                                    |                                                | Income from continuing operations per unit                          |                                                                      | $                          | 1.27             |          |           | $         | 1.49        |          |           | $         | 1.43        |         
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                | Net income available to unitholders per unit                        |                                                                      | $                          | 1.50             |          |           | $         | 1.71        |          |           | $         | 1.57        |         
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                | Weighted average Units outstanding                                  |                                                                      |                            | 450,594,465      |          |           |           | 467,134,774 |          |           |           | 408,919,582 |         
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Earnings per unit 
    diluted:                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |             |          |           |          
|                                                                                                                                                                    |                                                | Income from continuing operations per unit                          |                                                                      | $                          | 1.26             |          |           | $         | 1.49        |          |           | $         | 1.42        |         
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                | Net income available to unitholders per unit                        |                                                                      | $                          | 1.50             |          |           | $         | 1.70        |          |           | $         | 1.55        |         
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|                                                                                                                                                                    |                                                | Weighted average Units outstanding and dilutive
    potential units |                                                                      |                            | 452,561,353      |          |           |           | 469,138,720 |          |           |           | 411,986,897 |         
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            
|Distributions declared per Unit
    outstanding                                                                                                                     |                                                | $                                                                   | 2.00                                                                 |                            |                  | $        | 2.00      |           |             | $        | 1.90      |          
|                                                                                                                                                                    |                                                |                                                                     |                                                                      |                            |                  |          |           |           |            

See accompanying notes.

52



---



##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN
PARTNERS CAPITAL


|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |   |   |            |           |  
|------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | ---------- | -------- | ---- | - | ---------- | -------- | - | - | ---------- | --------- | -
|                                            |                                                                                                                                                       |                                 
|                                            |                                                                                                                                                       | For the years ended December 31, |           
|                                            |                                                                                                                                                       |                                  |           
|                                            |                                                                                                                                                       | 2003                             |            |          | 2002 |   |            | 2001     |  
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|                                            |                                                                                                                                                       |                                 
|                                            |                                                                                                                                                       | (Dollars in thousands)           |           
|Mandatorily Redeemable Preferred
    Units: |                                                                                                                                                       |                                  |            |          |      |   |            |          |   |   |            |          
|Balance, beginning of period                |                                                                                                                                                       | $                                | 299,500    |          |      | $ | 299,500    |          |   | $ | 300,000    |          
|                                            | Conversion of Series B Cumulative Redeemable
    Preferred Units to Units                                                                             |                                  |            |         |      |   |            |         |   |   |            | (500      | )
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Balance, end of period                      |                                                                                                                                                       | $                                | 299,500    |          |      | $ | 299,500    |          |   | $ | 299,500    |          
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Partners Capital:                          |                                                                                                                                                       |                                  |            |          |      |   |            |          |   |   |            |          
|Balance, beginning of period                |                                                                                                                                                       | $                                | 12,047,987 |          |      | $ | 12,452,021 |          |   | $ | 7,380,942  |          
|                                            | Issuance of Units for Spieker Partnership merger                                                                                                      |                                  |            |         |      |   |            |         |   |   |            | 3,464,625 |  
|                                            | Issuance of share options in the Spieker
    Partnership merger                                                                                       |                                  |            |         |      |   |            |         |   |   |            | 18,701    |  
|                                            | Redemption of Units for cash                                                                                                                          |                                  |            | (6,427   | )    |   |            | (106,690 | ) |   |            | (1,245    | )
|                                            | Issuance of Units through exercise of share
    options                                                                                               |                                  |            | 37,744   |      |   |            | 40,015   |   |   |            | 72,359    |  
|                                            | Offering costs                                                                                                                                        |                                  |            | (257     | )    |   |            | (7,042   | ) |   |            | (65       | )
|                                            | Units issued for restricted units, trustee fees
    and for the dividend reinvestment plan, net of restricted units
    retired, net of cancellations |                                  |            |         |      |   |            | 11,872   |   |   |            | 15,246    |  
|                                            | Compensation expense related to restricted units
    and stock options issued to employees by Equity Office                                           |                                  |            | 7,500    |      |   |            |         |   |   |            |          |  
|                                            | Common Shares and Units repurchased by EOP
    Partnership                                                                                            |                                  |            | (363,486 | )    |   |            | (196,882 | ) |   |            |          |  
|                                            | Conversion of Series B Cumulative Redeemable
    Preferred Units to Units                                                                             |                                  |            |         |      |   |            |         |   |   |            | 500       |  
|                                            | 9.45% Series D Cumulative Redeemable
    Preferred Units issued in the Spieker Partnership merger                                                     |                                  |            |         |      |   |            |         |   |   |            | 106,250   |  
|                                            | 7.875% Series E Cumulative Redeemable
    Preferred Units issued in the Spieker Partnership merger                                                    |                                  |            |         |      |   |            |         |   |   |            | 150,000   |  
|                                            | 8.0% Series F Cumulative Redeemable
    Preferred Units issued in the Spieker Partnership merger                                                      |                                  |            |         |      |   |            |         |   |   |            | 100,000   |  
|                                            | Issuance of 7.75% Series G Cumulative
    Redeemable Preferred Units                                                                                  |                                  |            |         |      |   |            | 212,500  |   |   |            |          |  
|                                            | Preferred units redeemed                                                                                                                              |                                  |            | (250,000 | )    |   |            | (199,850 | ) |   |            | (106,250  | )
|                                            | Reclassification of redeemable units                                                                                                                  |                                  |            |         |      |   |            |         |   |   |            | 1,426,359 |  
|                                            | Put option settlement                                                                                                                                 |                                  |            |         |      |   |            |         |   |   |            | (1,467    | )
|                                            | Preferred distributions, net                                                                                                                          |                                  |            | (51,872  | )    |   |            | (62,573  | ) |   |            | (57,041   | )
|                                            | Distributions declared to partners                                                                                                                    |                                  |            | (901,472 | )    |   |            | (936,705 | ) |   |            | (839,463  | )
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Balance, end of period                      |                                                                                                                                                       | $                                | 10,519,717 |          |      | $ | 11,206,666 |          |   | $ | 11,729,451 |          
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Comprehensive Income:                       |                                                                                                                                                       |                                  |            |          |      |   |            |          |   |   |            |          
|Net income                                  |                                                                                                                                                       | $                                | 729,214    |          |      | $ | 859,420    |          |   | $ | 694,431    |          
|Other comprehensive income (loss):          |                                                                                                                                                       |                                  |            |          |      |   |            |          |   |   |            |          
|                                            | Unrealized holding loss on forward starting
    interest rate swaps                                                                                   |                                  |            | 2,220    |      |   |            | (18,611  | ) |   |            |          |  
|                                            | Reversal of unrealized holding loss on settlement
    of forward starting interest rate swap                                                          |                                  |            | 5,942    |      |   |            |         |   |   |            |          |  
|                                            | Proceeds from settlement of forward starting
    interest rate swap                                                                                   |                                  |            | 768      |      |   |            |         |   |   |            |          |  
|                                            | Accumulated amortization of proceeds from
    settlement of forward starting interest rate swap                                                       |                                  |            | (73      | )    |   |            |         |   |   |            |          |  
|                                            | Unrealized holding gains (losses) from investments                                                                                                    |                                  |            | 848      |      |   |            | 396      |   |   |            | (2,699    | )
|                                            | Reclassification adjustment for realized gains
    included in net income                                                                             |                                  |            | (1,142   | )    |   |            | 116      |   |   |            |          |  
|                                            | Recognition of permanent impairment on marketable
    securities                                                                                      |                                  |            |         |      |   |            |         |   |   |            | 30,838    |  
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Net comprehensive income                    |                                                                                                                                                       |                                  | 737,777    |          |      |   | 841,321    |          |   |   | 722,570    |          
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Balance, end of period                      |                                                                                                                                                       | $                                | 11,257,494 |          |      | $ | 12,047,987 |          |   | $ | 12,452,021 |          
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Deferred Compensation:                      |                                                                                                                                                       |                                  |            |          |      |   |            |          |   |   |            |          
|Balance, beginning of period                |                                                                                                                                                       | $                                | (15,472    | )        |      | $ | (19,822    | )        |   | $ | (14,871    | )        
|                                            | Restricted units granted                                                                                                                              |                                  |            |         |      |   |            | (17,060  | ) |   |            | (17,519   | )
|                                            | Restricted units retired                                                                                                                              |                                  |            |         |      |   |            | 7,669    |   |   |            | 3,328     |  
|                                            | Amortization of restricted units                                                                                                                      |                                  |            | 9,583    |      |   |            | 13,741   |   |   |            | 9,240     |  
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  
|Balance, end of period                      |                                                                                                                                                       | $                                | (5,889     | )        |      | $ | (15,472    | )        |   | $ | (19,822    | )        
|                                            |                                                                                                                                                       |                                  |            |          |      |   |            |          |  

See accompanying notes.

53



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                      |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |          |         |           |            |         |         |            |  
|--------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | -------------------------------------------------------- | -------- | ------- | --------- | -------- | -------- | ------- | --------- | ---------- | ------- | ------- | ---------- | -
|                      |                                                                                       |                                                                                                                                           
|                      |                                                                                       | For the years ended December 31,                                                                                                           |                                                                 
|                      |                                                                                       |                                                                                                                                            |                                                                 
|                      |                                                                                       | 2003                                                                                                                                       |                                                                  |                                                          | 2002     |         |           | 2001     |         
|                      |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |         
|                      |                                                                                       |                                                                                                                                           
|                      |                                                                                       | (Dollars in thousands)                                                                                                                     |                                                                 
|Operating Activities: |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |          |         |           |           
|                      | Net income                                                                            |                                                                                                                                            | $                                                                | 729,214                                                  |          |         | $         | 859,420  |          |         | $         | 694,431    |        
|                      | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |          |         |           |            |        
|                      |                                                                                       | Revenue recognized related to acquired lease
    obligations, net                                                                          |                                                                  |                                                          | (68      | )       |           |          |         |         |           |            |        |        
|                      |                                                                                       | Interest/dividend income accrued but not received                                                                                          |                                                                  |                                                          |         |         |           |          |         |         |           |            | (9,852  | )      
|                      |                                                                                       | Amortization of discounts included in
    interest/dividend income                                                                         |                                                                  |                                                          | (357     | )       |           |          | (856     | )       |           |            | (2,919  | )      
|                      |                                                                                       | Amortization of deferred revenue included in
    other income                                                                              |                                                                  |                                                          |         |         |           |          |         |         |           |            | (3,073  | )      
|                      |                                                                                       | Depreciation and amortization (including
    discontinued operations)                                                                      |                                                                  |                                                          | 737,102  |         |           |          | 695,892  |         |           |            | 590,214 |        
|                      |                                                                                       | Amortization of premiums/discounts on unsecured
    notes and settled interest rate protection agreements included
    in interest expense |                                                                  |                                                          | (19,904  | )       |           |          | (7,183   | )       |           |            | 3,167   |        
|                      |                                                                                       | Compensation expense related to restricted shares
    and share options issued to employees by Equity Office                               |                                                                  |                                                          | 17,094   |         |           |          | 14,961   |         |           |            | 9,240   |        
|                      |                                                                                       | Impairments                                                                                                                                |                                                                  |                                                          | 7,500    |         |           |          |         |         |           |            | 135,220 |        
|                      |                                                                                       | Income from investments in unconsolidated joint
    ventures                                                                               |                                                                  |                                                          | (79,882  | )       |           |          | (106,852 | )       |           |            | (69,203 | )      
|                      |                                                                                       | Net gain on sales of real estate (including
    discontinued operations)                                                                   |                                                                  |                                                          | (161,063 | )       |           |          | (17,926  | )       |           |            | (81,662 | )      
|                      |                                                                                       | Extraordinary items                                                                                                                        |                                                                  |                                                          |         |         |           |          |         |         |           |            | 1,000   |        
|                      |                                                                                       | Cumulative effect of a change in accounting
    principle                                                                                  |                                                                  |                                                          |         |         |           |          |         |         |           |            | 1,142   |        
|                      |                                                                                       | Provision for doubtful accounts                                                                                                            |                                                                  |                                                          | 12,803   |         |           |          | 27,995   |         |           |            | 26,124  |        
|                      |                                                                                       | Income allocated to minority interests                                                                                                     |                                                                  |                                                          | 8,116    |         |           |          | 7,200    |         |           |            | 8,685   |        
|                      |                                                                                       | Changes in assets and liabilities:                                                                                                         |                                                                  |                                                          |          |         |           |          |          |         |           |            |         |        
|                      |                                                                                       |                                                                                                                                            | (Increase) decrease in rents receivable                          |                                                          |          | (6,893  | )         |          |          | 30,236  |           |            |         | (22,655 | )         
|                      |                                                                                       |                                                                                                                                            | (Increase) in deferred rent receivable                           |                                                          |          | (72,240 | )         |          |          | (77,123 | )         |            |         | (75,555 | )         
|                      |                                                                                       |                                                                                                                                            | (Increase) in prepaid expenses and other assets                  |                                                          |          | (8,409  | )         |          |          | (27,861 | )         |            |         | (5,051  | )         
|                      |                                                                                       |                                                                                                                                            | (Decrease) increase in accounts payable and
    accrued expenses |                                                          |          | (17,487 | )         |          |          | (22,883 | )         |            |         | 21,434  |           
|                      |                                                                                       |                                                                                                                                            | (Decrease) increase in other liabilities                         |                                                          |          | (13,223 | )         |          |          | 15,929  |           |            |         | 20,914  |           
|                      |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |         
|                      |                                                                                       |                                                                                                                                            |                                                                  | Net cash provided by operating activities                |          |         | 1,132,303 |          |          |         | 1,390,949 |            |         |         | 1,241,601  |  
|                      |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |         
|Investing Activities: |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |          |         |           |           
|                      | Property acquisitions                                                                 |                                                                                                                                            |                                                                  | (189,415                                                 | )        |         |           | (53,067  | )        |         |           | (104,748   | )      
|                      | Acquisition of Spieker Partnership                                                    |                                                                                                                                            |                                                                  |                                                         |          |         |           |         |          |         |           | (1,076,957 | )      
|                      | Property dispositions                                                                 |                                                                                                                                            |                                                                  | 1,345,554                                                |          |         |           | 377,150  |          |         |           | 361,353    |        
|                      | Capital and tenant improvements                                                       |                                                                                                                                            |                                                                  | (435,308                                                 | )        |         |           | (328,930 | )        |         |           | (360,065   | )      
|                      | Lease commissions and other costs                                                     |                                                                                                                                            |                                                                  | (142,272                                                 | )        |         |           | (104,714 | )        |         |           | (77,639    | )      
|                      | Decrease in escrow deposits and restricted cash                                       |                                                                                                                                            |                                                                  | 23,329                                                   |          |         |           | 167,026  |          |         |           | 28,064     |        
|                      | Distributions from unconsolidated joint ventures                                      |                                                                                                                                            |                                                                  | 176,012                                                  |          |         |           | 199,665  |          |         |           | 131,983    |        
|                      | Investments in unconsolidated joint ventures                                          |                                                                                                                                            |                                                                  | (34,378                                                  | )        |         |           | (198,040 | )        |         |           | (249,893   | )      
|                      | Redemption of CT Convertible Trust I
    preferred stock                              |                                                                                                                                            |                                                                  |                                                         |          |         |           | 20,086   |          |         |           |           |        
|                      | Investment in securities                                                              |                                                                                                                                            |                                                                  |                                                         |          |         |           |         |          |         |           | (683       | )      
|                      | Repayments of notes receivable                                                        |                                                                                                                                            |                                                                  | 1,299                                                    |          |         |           | 5,997    |          |         |           | 382        |        
|                      |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |         
|                      |                                                                                       |                                                                                                                                            |                                                                  | Net cash provided by (used for) investing
    activities |          |         | 744,821   |          |          |         | 85,173    |            |         |         | (1,348,203 | )
|                      |                                                                                       |                                                                                                                                            |                                                                  |                                                          |          |         |           |          |         

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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)


|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |            |   |   |            |         | 
|------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | - | ---------- | ---------- | - | - | ---------- | ---------- | - | - | ---------- | ------- | 
|                          |                                                                                                                                                           |                                                         
|                          |                                                                                                                                                           | For the years ended December 31,                         |  
|                          |                                                                                                                                                           |                                                          |  
|                          |                                                                                                                                                           | 2003                                                     |   |            | 2002       |   |   | 2001       |           
|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |           
|                          |                                                                                                                                                           |                                                         
|                          |                                                                                                                                                           | (Dollars in thousands)                                   |  
|Financing Activities:     |                                                                                                                                                           |                                                          |   |            |            |   |   |            |            |   |   |           
|                          | Proceeds from mortgage debt                                                                                                                               |                                                          | $ |           |            |   | $ | 14,427     |            |   | $ | 140,000    |        
|                          | Principal payments on mortgage debt                                                                                                                       |                                                          |   | (233,809   | )          |   |   | (156,052   | )          |   |   | (458,731   | )      
|                          | Prepayment penalties on early extinguishment of
    debt                                                                                                  |                                                          |   |           |            |   |   |           |            |   |   | (5,000     | )      
|                          | Proceeds from unsecured notes                                                                                                                             |                                                          |   | 494,810    |            |   |   | 239,127    |            |   |   | 1,386,598  |        
|                          | Repayment of unsecured notes                                                                                                                              |                                                          |   | (700,000   | )          |   |   | (310,000   | )          |   |   | (100,000   | )      
|                          | Proceeds from lines of credit                                                                                                                             |                                                          |   | 5,215,400  |            |   |   | 1,336,350  |            |   |   | 3,206,050  |        
|                          | Principal payments on lines of credit                                                                                                                     |                                                          |   | (5,087,100 | )          |   |   | (1,374,950 | )          |   |   | (3,152,036 | )      
|                          | Payments of loan costs                                                                                                                                    |                                                          |   | (8,678     | )          |   |   | (4,296     | )          |   |   | (10,481    | )      
|                          | Proceeds from settlement of interest rate swap
    agreements                                                                                             |                                                          |   | 768        |            |   |   | 42,810     |            |   |   | 47,369     |        
|                          | Distributions to minority interests in partially
    owned properties                                                                                     |                                                          |   | (10,062    | )          |   |   | (10,401    | )          |   |   | (5,878     | )      
|                          | Payment of offering costs                                                                                                                                 |                                                          |   | (257       | )          |   |   | (187       | )          |   |   | (65        | )      
|                          | Proceeds from exercise of share options                                                                                                                   |                                                          |   | 37,744     |            |   |   | 40,015     |            |   |   | 71,835     |        
|                          | Distributions to unitholders                                                                                                                              |                                                          |   | (901,259   | )          |   |   | (935,083   | )          |   |   | (837,659   | )      
|                          | Repurchase of Units through Equity Offices
    common share repurchase program                                                                           |                                                          |   | (363,486   | )          |   |   | (196,882   | )          |   |   |           |        
|                          | Redemption of Units                                                                                                                                       |                                                          |   | (6,427     | )          |   |   | (106,690   | )          |   |   | (1,245     | )      
|                          | Redemption of preferred units                                                                                                                             |                                                          |   | (250,000   | )          |   |   | (199,850   | )          |   |   | (106,250   | )      
|                          | Issuance of preferred units                                                                                                                               |                                                          |   |           |            |   |   | 205,645    |            |   |   |           |        
|                          | Put option settlement                                                                                                                                     |                                                          |   |           |            |   |   |           |            |   |   | (1,467     | )      
|                          | Payment of preferred distributions                                                                                                                        |                                                          |   | (53,841    | )          |   |   | (62,755    | )          |   |   | (58,573    | )      
|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |           
|                          |                                                                                                                                                           | Net cash (used for) provided by financing
    activities |   |            | (1,866,197 | ) |   |            | (1,478,772 | ) |   |            | 114,467 | 
|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |           
|                          | Net increase (decrease) in cash and cash
    equivalents                                                                                                  |                                                          |   | 10,927     |            |   |   | (2,650     | )          |   |   | 7,865      |        
|                          | Cash and cash equivalents at the beginning of the
    year                                                                                                |                                                          |   | 58,471     |            |   |   | 61,121     |            |   |   | 53,256     |        
|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |           
|                          | Cash and cash equivalents at the end of the year                                                                                                          |                                                          | $ | 69,398     |            |   | $ | 58,471     |            |   | $ | 61,121     |        
|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |           
|Supplemental Information: |                                                                                                                                                           |                                                          |   |            |            |   |   |            |            |   |   |           
|                          | Interest paid during the period, including a
    reduction of interest expense for capitalized interest of
    $10,089, $21,447 and $25,871, respectively |                                                          | $ | 849,337    |            |   | $ | 836,573    |            |   | $ | 679,537    |        
|                          |                                                                                                                                                           |                                                          |   |            |            |   |   |            |           

55



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##### Table of Contents



EOP OPERATING LIMITED PARTNERSHIP


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)


|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |          |   |  |   |           |   | 
|------------------------------------------------ | --------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | - | ------- | -------- | - | ---- | -------- | - |  | - | --------- | - | 
|                                                 |                       |                                                                                                                                                                                
|                                                 |                       | For the years ended December 31,                                                                                                                                                |                                                             
|                                                 |                       |                                                                                                                                                                                 |                                                             
|                                                 |                       | 2003                                                                                                                                                                            |                                                              |   | 2002    |          |   | 2001 |         
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       |                                                                                                                                                                                
|                                                 |                       | (Dollars in thousands)                                                                                                                                                          |                                                             
|Non-Cash Investing and Financing
    Activities: |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |          |   |  |  
|                                                 | Investing Activities: |                                                                                                                                                                                 |                                                              |   |         |          |   |      |          |   |  |   |          
|                                                 |                       | Escrow deposits related to property dispositions                                                                                                                                |                                                              | $ | (69,330 | )        |   | $    | (70,025  | ) |  | $ | (184,458  | )
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Mortgage loan repayment as a result of a property
    disposition                                                                                                               |                                                              | $ | (16,279 | )        |   | $    |         |   |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Mortgage loan assumed upon consolidation of
    property                                                                                                                        |                                                              | $ | 59,166  |          |   | $    |         |   |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Escrow deposits used for property acquisition                                                                                                                                   |                                                              | $ |        |          |   | $    | 70,030   |   |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Changes in accounts due to partial sales of real
    estate:                                                                                                                    |                                                              |   |         |          |   |      |          |   |  |   |           |  
|                                                 |                       |                                                                                                                                                                                 | Increase in investments in unconsolidated joint
    ventures |   | $       | 155,710  |   |      | $        |  |  |   | $         |  | 
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       |                                                                                                                                                                                 | Decrease in investment in real estate                        |   | $       | (169,390 | ) |      | $        |  |  |   | $         |  | 
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       |                                                                                                                                                                                 | Decrease in accumulated depreciation                         |   | $       | 19,336   |   |      | $        |  |  |   | $         |  | 
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       |                                                                                                                                                                                 | Decrease in other assets and liabilities                     |   | $       | (4,460   | ) |      | $        |  |  |   | $         |  | 
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 | Financing Activities: |                                                                                                                                                                                 |                                                              |   |         |          |   |      |          |   |  |   |          
|                                                 |                       | Mortgage loan repayment as a result of a property
    disposition                                                                                                               |                                                              | $ | 16,279  |          |   | $    |         |   |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Mortgage loan assumed upon consolidation of
    property                                                                                                                        |                                                              | $ | (59,166 | )        |   | $    |         |   |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Issuance of unsecured notes at a discount of
    $10,048 in exchange for $250 million MandatOry Par Put
    Remarketed SecuritiesSM                                             |                                                              | $ |        |          |   | $    | (254,631 | ) |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Exchange of $250 million MandatOry Par Put
    Remarketed SecuritiesSM, including an unamortized
    premium of $4,631, for $264,679 notes due 2012 issued in
    February 2002 |                                                              | $ |        |          |   | $    | 254,631  |   |  | $ |          |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Mortgage loans, unsecured notes and line of
    credit assumed in the Spieker Partnership merger                                                                                |                                                              | $ |        |          |   | $    |         |   |  | $ | 2,125,610 |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Net liabilities assumed in the Spieker
    Partnership merger                                                                                                                   |                                                              | $ |        |          |   | $    |         |   |  | $ | 125,558   |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Minority interests in partially owned properties
    assumed in the Spieker Partnership merger                                                                                  |                                                              | $ |        |          |   | $    |         |   |  | $ | 1,272     |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Units and share options issued in the Spieker
    Partnership merger                                                                                                            |                                                              | $ |        |          |   | $    |         |   |  | $ | 3,483,326 |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         
|                                                 |                       | Preferred units issued in the Spieker Partnership
    merger                                                                                                                    |                                                              | $ |        |          |   | $    |         |   |  | $ | 356,250   |  
|                                                 |                       |                                                                                                                                                                                 |                                                              |   |         |          |   |      |         

See accompanying notes.

56



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##### Table of Contents





NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS



|         |                                              
|-------- | ---------------------------------------------
|NOTE 1  | BUSINESS AND FORMATION OF EOP
    PARTNERSHIP

EOP Operating Limited Partnership (EOP
Partnership) is a Delaware limited partnership. Our
general partner is Equity Office Properties Trust (Equity
Office), a Maryland real estate investment trust
(REIT). The use of the word we,
us, or our refers to EOP Partnership and
its subsidiaries, except where the context otherwise requires.
We were organized in 1996 to continue and expand the national
office property business organized by Mr. Samuel Zell, the
Chairman of the Board of Trustees of Equity Office, and to
complete the consolidation of our predecessors. Equity Office
completed its initial public offering (the IPO) on
July 11, 1997, having sold its common shares of beneficial
interest, $0.01 par value per share (Common
Shares). The net proceeds from the IPO were contributed to
us in exchange for units of partnership interest
(Units). Equity Office has elected to be taxed as a
REIT for federal income tax purposes and generally will not be
subject to federal income tax if it distributes 100% of its
taxable income and complies with a number of organizational and
operational requirements.

We are a fully integrated, self-administered and
self-managed real estate company principally engaged, through
our subsidiaries, in owning, managing, leasing, acquiring and
developing office properties. At December 31, 2003, we
owned or had an interest in 684 office properties comprising
approximately 122.3 million rentable square feet of office
space in 18 states and the District of Columbia and were
located in 27 markets and 124 submarkets (the Office
Properties). On a weighted average basis, the Office
Properties were 86.3% occupied at December 31, 2003.
Approximately 42.3% of the rentable square feet is located in
central business districts and approximately 57.7% of the
rentable square feet is located in suburban markets. At
December 31, 2003, we also owned 75 industrial properties
comprising approximately 5.8 million square feet of
industrial space (the Industrial Properties and
together with the Office Properties, the Properties)
and approximately 0.4 million square feet of office
properties under development. On a weighted average basis, the
Industrial Properties were 86.6% occupied at December 31,
2003.



|         |                                               
|-------- | ----------------------------------------------
|NOTE 2  | SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES

Basis of Presentation

The consolidated financial statements represent
our financial condition and results of operations and those of
our subsidiaries. All intercompany transactions and balances
have been eliminated in consolidation. Property holding entities
and other subsidiaries of which we own 100% of the equity are
consolidated. For those joint ventures of which we own less than
100% of the equity interest, we consolidate the property if we
have the direct or indirect ability to make decisions about the
entities activities based on the terms of the respective
joint venture agreements which specify the sharing of
participating and protective rights such as decisions regarding
major leases, encumbering the entities with debt and whether to
dispose of entities. We would also consolidate certain property
holding entities and other subsidiaries if we own less than a
100% equity interest if we are deemed to be the primary
beneficiary in a variable interest entity (as defined in FASB
Interpretation 46 Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51, as
revised (FIN 46)).

Investments in Real Estate

Rental property and improvements, including
interest and other costs capitalized during construction, are
included in investments in real estate and are stated at cost.
Expenditures for ordinary maintenance and repairs are expensed
to operations as they are incurred. Significant renovations and
improvements, which improve or extend the useful life of the
assets, are capitalized. Rental property and improvements,
excluding

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




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

land, are depreciated over their estimated useful
lives using the straight-line method. The estimated useful lives
by asset category are:

|                       |  |                       |               | 
|---------------------- |  | --------------------- | ------------- | 
|Asset Category         |  | Estimated Useful Life |              
|                       |  |                       |              
|Building               |  |                       | 23-40 years   | 
|Building improvements  |  |                       | 3-40 years    | 
|Tenant improvements    |  |                       | Term of lease | 
|Furniture and fixtures |  |                       | 3-12 years    | 

In accordance with Statement of Financial
Accounting Standards No. 141 Business Combinations
(Statement 141), we allocate the purchase
price of real estate to land, building, tenant improvements and,
if determined to be material, intangibles, such as the value of
above, below and at-market leases, origination costs associated
with the in-place leases, and the value of tenant relationships,
if any. We depreciate the amount allocated to building and other
intangible assets over their estimated useful lives, which
generally range from three to 40 years. The values of the
above and below market leases are amortized and recorded as
either an increase (in the case of below market leases) or a
decrease (in the case of above market leases) to rental income
over the remaining term of the associated lease. The value
associated with in-place leases and tenant relationships is
amortized over the expected term, which includes an estimated
probability of the lease renewal, and its estimated term. If a
tenant vacates its space prior to the contractual termination of
the lease and no rental payments are being made on the lease,
any unamortized balance of the related intangible will be
written off. The tenant improvements and origination costs are
amortized as an expense over the remaining life of the lease (or
charged against earnings if the lease is terminated prior to its
contractual expiration date).

In accordance with Statement 141 and its
applicability to acquired in-place leases, we perform (or engage
a third party to perform) the following procedures for
properties we acquire:



| |    |                                                                                                                                                                                                        
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) | estimate the value of the real estate as if
    vacant as of the acquisition date;                                                                                                                   
|
| | 2) | allocate that value among land, building
    improvements, building, and equipment and determine the
    associated asset life for each;                                                               
|
| | 3) | compute the value of the difference between the
    as if vacant value and the purchase price, which
    will represent the total intangible assets;                                                 
|
| | 4) | allocate the value of the above and below market
    leases to the intangible assets and determine the associated
    life of the above/below market leases;                                           
|
| | 5) | calculate the value and associated life of the
    tenant relationships, if any, by taking the direct identifiable
    benefits of the customer relationship and discounting them to
    present value;
|
| | 6) | estimate the fair value of the in-place tenant
    improvements and leasing commissions and calculate the
    associated asset life; and                                                               
|
| | 7) | allocate the remaining intangible value to the
    in-place leases and their associated lives.                                                                                                         

Rental properties are individually evaluated for
impairment when conditions exist which may indicate that it is
probable that the sum of expected future cash flows (on an
undiscounted basis) from a rental property over the anticipated
holding period is less than its historical net cost basis. Upon
determination that a permanent impairment has occurred, rental
properties are reduced to their fair value. For properties to be
disposed of, an impairment loss is recognized when the fair
value of the property, less the estimated cost to sell, is less
than the carrying amount of the property measured at the time we
have a commitment to sell the property which is not subject to
any significant contingencies. A property to be disposed of is
reported at the lower of its carrying amount or its estimated
fair value, less its cost to sell. Subsequent to the date that a
property is held for disposition, depreciation expense is not
recorded.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




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

The FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or
Disposal of Long Lived Assets. Statement 144 addresses
financial accounting and reporting for the impairment or
disposal of long-lived assets. The provisions of
Statement 144 are effective for financial statements issued
for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years. We adopted the
standard in 2002 and it did not have a material effect on our
financial condition or results of operations.

Developments in process are carried at cost,
which includes land acquisition cost, architectural fees,
general contractor fees, capitalized interest, internal costs
related directly to the development and other costs related
directly to the construction of the property. Depreciation is
not recorded until the property is placed in service, which
occurs shortly after receipt of a certificate of occupancy.

Land available for development is carried at cost
and is not depreciated. Land available for development includes
various vacant land parcels that may have some improvements such
as utility service.

Investments in Unconsolidated Joint
Ventures

Investments in unconsolidated joint ventures are
accounted for using the equity method of accounting because we
do not have control over the activities of the investees. Our
net equity investment is reflected on the consolidated balance
sheets, and the consolidated statements of operations include
our share of net income or loss from the unconsolidated joint
ventures. Any difference between the carrying amount of these
investments on our consolidated balance sheet and the historical
cost of the underlying equity is depreciated as an adjustment to
income from unconsolidated joint ventures generally over 40
years.

Deferred Leasing and Financing Costs

Deferred leasing and financing costs, which
consist of, but are not limited to, commissions paid to third
parties for new or renewal leases, and fees paid to third
parties for unsecured note offerings and mortgage debt, are
recorded at cost. The deferred leasing costs are amortized over
the terms of the respective leases and the deferred financing
costs are amortized over the terms of the respective financings
on a straight-line basis, which approximates the effective yield
method. We also record deferred leasing costs in accordance with
Statement 141 when allocating the purchase price to acquired
in-place leases (see Investment in Real Estate above).

Revenue Recognition

We record rental income for the full term of each
lease on a straight-line basis. Certain leases provide for
tenant occupancy during periods for which no rent is due or
where minimum rent payments increase during the term of the
lease. Accordingly, a receivable is recorded from tenants for
the current difference between the straight-line rent and the
rent that is contractually due from the tenant (Deferred
Rent Receivable). When a property is acquired, the term of
existing leases is considered to commence as of the acquisition
date for purposes of this calculation. The amounts included in
rental income for the years ended December 31, 2003, 2002
and 2001 were approximately $73.1 million,
$67.4 million and $66.5 million from continuing
operations, respectively. Deferred rental revenue is not
recognized for income tax purposes.

Tenant reimbursements consisting of amounts due
from tenants for common area maintenance, real estate taxes and
other recoverable costs are recognized as revenue in the period
in which the expenses are incurred.

Lease termination income (included in other
revenue) represents amounts received from tenants in connection
with the early termination of their remaining lease obligation.
We will also record deferred revenue in connection with a lease
termination fee received if it is probable that a tenant will
file for bankruptcy within

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


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

90 days, if significant contingencies in the
lease termination agreement exist or if the tenant has not yet
vacated the building.

We recognize income from rent, tenant
reimbursements and lease termination fees and other income once
all of the following criteria are met in accordance with SEC
Staff Accounting Bulletin 104:



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

Cash Equivalents

Cash equivalents are considered to be all highly
liquid investments purchased with a maturity of three months or
less at the date of purchase.

Allowance for Doubtful Accounts

Allowance for doubtful accounts is maintained for
estimated losses resulting from the inability of certain tenants
to meet the contractual obligations under their lease
agreements. Management actively reviews tenant receivables and
determines the probability of collection for receivables
identified as potentially uncollectible. The amount of the
allowance takes into account any security deposits or
outstanding letters of credit.

Escrow Deposits and Restricted Cash

Escrow deposits primarily consist of amounts held
by lenders to provide for future real estate tax expenditures
and tenant improvements, earnest money deposits on acquisitions
and net proceeds from property sales that were executed as a
tax-deferred disposition. Restricted cash represents amounts
committed for various utility deposits and security deposits.

Fair Value of Financial Instruments and Other
Assets

Investments in notes receivable approximate their
fair value and are included in other assets.

We have debt at fixed and variable rates. The
fair market value of variable rate debt approximates book value
because the interest rate is based on LIBOR plus a credit
premium, which represents a market rate. The fair value of the
fixed-rate mortgage debt and unsecured notes as of
December 31, 2003 was approximately $1.3 billion
higher than the book value of approximately $11.1 billion
primarily due to the general decrease in market interest rates
on secured and unsecured debt. As of December 31, 2002, the
fair value of our fixed-rate debt was approximately
$1.0 billion higher than the book value. The fair value of
the mortgage debt and the unsecured notes was determined by
discounting the spread between the future contractual interest
payments and the future interest payments based on a market
rate. The fair value of interest rate swap agreements is
determined using third party valuations. In addition, the
carrying values of cash equivalents, restricted cash, escrow
deposits, tenant and other rents receivable, prepaid expenses
and other assets, accounts payable and accrued expenses and
other liabilities approximate their fair value.

Derivatives and Hedging Activities

We may periodically enter into certain interest
rate protection and swap agreements to effectively convert
floating rate debt to a fixed rate basis, fixed rate debt to a
floating rate basis, as well as to hedge anticipated future
financing transactions. Net amounts paid or received under these
agreements upon their periodic reset dates are recognized as an
adjustment to interest expense when such amounts are incurred or
earned.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




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

Settlement amounts paid or received in connection
with settled interest rate protection agreements and interest
rate swap agreements are deferred and amortized as an adjustment
to interest expense over the remaining term of the related
financing transaction on a straight-line basis, which
approximates the effective yield method.

All derivative instruments are recorded at fair
value. Derivatives that are not hedges must be adjusted to fair
value through net income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value
of the derivative will be offset against the corresponding
change in fair value of the hedged asset, liability, or firm
commitments through net income or recognized in other
comprehensive income until the hedged item is recognized in net
income. The ineffective portion of a derivatives change in
fair value will be recognized in net income. We recorded a
cumulative effect of a change in accounting principle resulting
in a loss of approximately $1.1 million in the year ended
December 31, 2001 as a result of adopting FASB Statement
No. 133 Accounting for Derivative Instruments and
Hedging Activities (SFAS No. 133).

Income Taxes

We are generally not liable for federal taxes
because our partners recognize their proportionate share of our
income or loss on their tax returns. The Office Properties and
Industrial Properties are primarily owned by limited
partnerships or limited liability companies, which are
substantially pass-through entities. Some of the pass-through
entities have corporate general partners or members, which are
subject to federal and state income and franchise taxes. In
addition, our property management business which provides
management services to Properties owned by third parties and
provides certain other services to many of our Properties is
owned by a corporation and is subject to federal and state
income and franchise taxes.

Equity Office has elected to be taxed as a REIT
under Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended (the Code). As a REIT, Equity
Office generally will not be subject to federal income tax if it
distributes 100% of its annual taxable income to its
shareholders. REITs are subject to a number of organizational
and operational requirements. If Equity Office fails to qualify
as a REIT in any taxable year, it will be subject to federal
income tax (including any applicable alternative minimum tax) on
its taxable income at regular corporate tax rates. Even if
Equity Office qualifies for taxation as a REIT, Equity Office
may be subject to state and local income taxes and to federal
income tax and excise tax on its undistributed income. In
addition, taxable income from Equity Offices taxable REIT
subsidiaries is subject to federal, state and local income
taxes. The aggregate cost of land and depreciable property for
federal income tax purposes as of December 31, 2003 and
2002 was approximately $14.4 billion and
$14.8 billion, respectively.

Minority Interests  Partially Owned
Properties

We consolidate certain Properties that we
control, but do not wholly own. The minority interests share of
the equity of these consolidated Properties is reflected in the
consolidated balance sheets as Minority
interests  partially owned properties and
represents the minority interests share in the total
equity of these Properties. The net income from these properties
attributable to the minority interests is reflected as
Minority interests  Partially owned
properties in the consolidated statements of operations.

In May 2003, the Financial Accounting Standards
Board (FASB) issued Statement No. 150
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity
(Statement 150). Statement 150 establishes standards
for classifying and measuring as liabilities certain financial
instruments that embody obligations of the issuer and have
characteristics of both liabilities and equity. Statement 150 is
effective for all financial instruments created or modified
after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after
June 15, 2003 (July 1, 2003 for calendar quarter
companies). We adopted Statement 150 on July 1, 2003,
which had no effect on our financial statements. Several of the
Properties that we consolidate but do not wholly own are subject
to finite life joint

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




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

venture agreements. Statement 150 requires the
disclosure of the estimated settlement value of these
noncontrolling interests. As of December 31, 2003 the
estimated settlement value of these noncontrolling interests
approximated the book value of approximately $169.7 million.

Use of Estimates

The preparation of the consolidated financial
statements in conformity with accounting principles generally
accepted in the United States (GAAP) 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 reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from
those estimates.

Reclassifications

Certain reclassifications have been made to the
previously reported 2002 and 2001 statements in order to
provide comparability with the 2003 statements reported
herein. These reclassifications have not changed the 2002 or
2001 results of operations or combined partners capital
and mandatorily redeemable preferred units.

Share Based Employee Compensation
Plans

Prior to January 1, 2003, we used the
accounting provisions provided by Accounting Principles Board
Opinion No. 25 (APB 25) to account for the
issuance of share options and other equity awards. Effective
January 1, 2003, we adopted Statement of Financial
Accounting Standards No. 123 (Statement 123)
Accounting for Stock Based Compensation, which requires a
fair value based accounting method for determining compensation
expense associated with the issuance of share options and other
equity awards. We adopted the accounting provisions of Statement
123 to reflect the cost of issuing share options and other
equity awards. Statement of Financial Accounting Standards
No. 148 (Statement 148) Accounting for
Stock-Based Compensation  Transition and
Disclosure  an Amendment of FASB Statement
No. 123, issued December 2002 and effective for interim
periods beginning after December 15, 2002, provided various
methods of applying Statement 123. In accordance with Statement
148, we employed the prospective method for adopting Statement
123, which requires the recognition of compensation expense
based on the fair value method for share options and other
equity awards granted on or after January 1, 2003 and for
certain modifications made subsequent to December 31, 2002
to share options and other equity awards that were outstanding
as of December 31, 2002. Compensation expense is recognized
ratably over the respective vesting period of the award.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




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

The following table illustrates the unaudited
effect on net income available to unitholders and earnings per
unit if the fair value based method had been applied to all
outstanding and unvested share options for the last three years.
Compensation expense related to restricted share awards is not
presented in the table below because the expense amount is the
same under APB No. 25 and Statement 123 and therefore, is
already reflected in net income.

|                                                                                                               |                                                |                                  |         |      |      |   |         |      |  |   |         |      | 
|-------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | -------------------------------- | ------- | ---- | ---- | - | ------- | ---- |  | - | ------- | ---- | 
|                                                                                                               |                                                |                                 
|                                                                                                               |                                                | For the years ended December 31, |        
|                                                                                                               |                                                |                                  |        
|                                                                                                               |                                                | 2003                             |         |      | 2002 |   |         | 2001 | 
|                                                                                                               |                                                |                                  |         |      |      |   |         |      | 
|                                                                                                               |                                                |                                 
|                                                                                                               |                                                | (Dollars in thousands,           |        
|                                                                                                               |                                                | except per unit data)            |        
|Historical net income available to unitholders                                                                 |                                                | $                                | 677,342 |      |      | $ | 796,847 |      |  | $ | 640,045 |     
|Add back compensation expense for share options
    included in historical net income available to unitholders |                                                |                                  | 2,907   |      |      |   | 1,265   |      |  |   |        |     
|Deduct compensation expense for share options
    determined under fair value based method                     |                                                |                                  | (10,916 | )    |      |   | (12,117 | )    |  |   | (11,928 | )   
|                                                                                                               |                                                |                                  |         |      |      |   |         |      | 
|Pro forma net income available to unitholders                                                                  |                                                | $                                | 669,333 |      |      | $ | 785,995 |      |  | $ | 628,117 |     
|                                                                                                               |                                                |                                  |         |      |      |   |         |      | 
|Earnings per unit  basic:                                                                                     |                                                |                                  |         |      |      |   |         |      |  |   |         |     
|                                                                                                               | Historical net income available to unitholders |                                  | $       | 1.50 |      |   | $       | 1.71 |  |   | $       | 1.57 | 
|                                                                                                               | Pro forma net income available to unitholders  |                                  | $       | 1.49 |      |   | $       | 1.68 |  |   | $       | 1.54 | 
|Earnings per unit  diluted:                                                                                   |                                                |                                  |         |      |      |   |         |      |  |   |         |     
|                                                                                                               | Historical net income available to unitholders |                                  | $       | 1.50 |      |   | $       | 1.70 |  |   | $       | 1.55 | 
|                                                                                                               | Pro forma net income available to unitholders  |                                  | $       | 1.48 |      |   | $       | 1.68 |  |   | $       | 1.52 | 

NOTE 3  IMPACT OF NEW
ACCOUNTING STANDARDS

In January 2003, the Financial Accounting
Standards Board (FASB) issued Interpretation
No. 46 (FIN 46), Consolidation of Variable
Interest Entities. The objective of this Interpretation is to
provide guidance on how to identify a variable interest entity
(VIE) and determine when the assets, liabilities,
non-controlling interests, and results of operations of a VIE
need to be included in consolidated financial statements. A
company that holds variable interests in an entity will need to
consolidate such entity if the company absorbs a majority of the
VIEs expected losses or receive a majority of the
entitys expected residual returns if they occur, or both.

The provisions of FIN 46 apply upon initial
involvement with the respective entity for transactions created
after January 31, 2003. The adoption in 2003 had no effect
on us. The provisions of FIN 46 and related revised
interpretations apply no later than the end of the first interim
reporting period ending March 15, 2004 (March 31,
2004) for entities created before February 1, 2003.

In 1999, we invested in a 67% share of a
$202.2 million mezzanine-level debt position for
approximately $73.9 million as part of a debt restructuring
related to the SunAmerica Center office property located in
Century City, California which consists of approximately
780,000 square feet. The note accrues interest at
7.25% per annum and matures in August 2014 and is payable
based on cash flow. We recognize interest income from this
investment on a cash basis. We also have an option to acquire
67% of the $15.0 million face amount of two other
subordinate notes from an affiliate of the property owner. We
have accounted for our investment as a note receivable included
in other assets.

Under the provisions of FIN 46, we are
required to consolidate the financial condition and results of
operations of SunAmerica Center effective January 1, 2004.
Our maximum exposure to loss as a result of the investment is
equivalent to the $73.9 million we invested in 1999.
However, we may be required to contribute additional funds to
support the operations of the property. Any additional funding
will be in the form of a shortfall note, which is repayable from
available cash flow. The shortfall notes may not exceed
$2.5 million in the aggregate. As of December 31,
2003, SunAmerica Centers total assets were approximately
$300 million

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 3  IMPACT OF NEW
ACCOUNTING STANDARDS  (continued)

and total liabilities were approximately
$235 million. Our only recourse is against the mezzanine
lender entitys sole interest in the property-owning
entity. The property is encumbered by a $203 million first
mortgage owed to a third party.

NOTE 4  SPIEKER
MERGER

On July 2, 2001, Spieker Properties, Inc.
(Spieker) merged into Equity Office and Spieker
Properties, L.P. (Spieker Partnership),
Spiekers operating partnership subsidiary, merged into EOP
Partnership (collectively, the Spieker Partnership
merger) which was accounted for using the purchase method.
The transaction valued Spieker (including the outside interests
in Spieker Partnership) at approximately $7.2 billion,
which included transaction costs, the assumption of
approximately $2.1 billion in debt and the issuance of
14.25 million of our preferred units valued at
approximately $356.3 million. We paid approximately
$1.1 billion in cash and Equity Office issued approximately
101.5 million Common Shares and we issued approximately
16.7 million Units to third parties, each valued at
$29.29 per Common Share/Unit. We financed the
$1.1 billion cash portion of the purchase price using a
combination of available cash and a new $1.0 billion bridge
loan facility that was entered into before the closing of the
Spieker Merger. The $1.0 billion bridge loan facility had a
term of 364 days and an interest rate based on LIBOR plus
80 basis points. The $1.0 billion bridge loan facility
was repaid in full with the net proceeds from the issuance of
$1.4 billion of unsecured notes in July 2001 and terminated
upon the repayment. Through the Spieker Partnership merger, we
acquired 391 Office Properties comprising approximately
28.3 million square feet, 98 Industrial Properties
comprising approximately 10.1 million square feet and
several development properties which added to our ownership in
key markets across the western United States.

The following table summarizes the estimated fair
values of the assets acquired and liabilities assumed at the
date of acquisition:

|                                                   |                           |                        |            |            |  
|-------------------------------------------------- | ------------------------- | ---------------------- | ---------- | ---------- | -
|                                                   |                           | (Dollars in thousands) |           
|                                                   |                           |                        |           
|Investment in real estate                          |                           | $                      | 7,168,973  |           
|Other assets                                       |                           |                        | 47,824     |           
|                                                   |                           |                        |           
|                                                   | Total assets acquired     |                        |            | 7,216,797  |  
|                                                   |                           |                        |           
|Mortgage debt, unsecured notes and lines of credit |                           |                        | (2,125,610 | )         
|Other liabilities                                  |                           |                        | (173,382   | )         
|                                                   |                           |                        |           
|                                                   | Total liabilities assumed |                        |            | (2,298,992 | )
|                                                   |                           |                        |           
|Minority interest in partially owned properties    |                           |                        | (1,272     | )         
|                                                   |                           |                        |           
|Common Shares, Units and stock options issued      |                           |                        | (3,483,326 | )         
|Preferred units issued                             |                           |                        | (356,250   | )         
|                                                   |                           |                        |           
|                                                   | Total equity issued       |                        |            | (3,839,576 | )
|                                                   |                           |                        |           
|Total cash used for Spieker Partnership merger     |                           | $                      | (1,076,957 | )         
|                                                   |                           |                        |           

64



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 5  INVESTMENTS IN REAL
ESTATE

Investments in real estate, including Office
Properties, Industrial Properties, properties under development
and vacant land, was as follows:

|                               |                                  |                        |            |            |      |   |            |            | 
|------------------------------ | -------------------------------- | ---------------------- | ---------- | ---------- | ---- | - | ---------- | ---------- | 
|                               |                                  |                       
|                               |                                  | December 31,           |           
|                               |                                  |                        |           
|                               |                                  | 2003                   |            |            | 2002 |  
|                               |                                  |                        |            |            |      |  
|                               |                                  |                       
|                               |                                  | (Dollars in thousands) |           
|Land                           |                                  | $                      | 2,737,533  |            |      | $ | 2,878,102  |           
|Land available for development |                                  |                        | 251,151    |            |      |   | 252,852    |           
|Building                       |                                  |                        | 19,479,760 |            |      |   | 20,545,623 |           
|Building improvements          |                                  |                        | 691,111    |            |      |   | 446,808    |           
|Tenant improvements            |                                  |                        | 971,780    |            |      |   | 683,142    |           
|Furniture and fixtures         |                                  |                        | 105,655    |            |      |   | 72,252     |           
|Developments in process        |                                  |                        | 75,232     |            |      |   | 284,737    |           
|                               |                                  |                        |            |            |      |  
|                               | Gross investments in real estate |                        |            | 24,312,222 |      |   |            | 25,163,516 | 
|Accumulated depreciation       |                                  |                        | (2,578,082 | )          |      |   | (2,077,613 | )         
|                               |                                  |                        |            |            |      |  
|                               | Net investments in real estate   |                        | $          | 21,734,140 |      |   | $          | 23,085,903 | 
|                               |                                  |                        |            |            |      |  

During 2003, we acquired the U.S. Bank Tower
and 225 West Santa Clara (a/k/a the Opus Center) office
buildings for approximately $183.2 million. The office
properties are located in Denver, Colorado and San Jose,
California, respectively, and consist of approximately
829,293 square feet.

In May 2003, we acquired approximately 8.1% of
the equity in the joint venture that owns The John Hancock
Complex in Boston, Massachusetts for approximately
$25.0 million. The investment in the joint venture is
accounted for under the cost method of accounting because we own
a noncontrolling interest in the property and is included in
prepaid expenses and other assets on the consolidated balance
sheet.

In September 2003, we acquired the remaining 20%
equity interest in Key Center (see Note 9 
Investments in Unconsolidated Joint Ventures for more
information).

In September 2003, we acquired a vacant land
parcel in Folsom, California, for approximately
$3.4 million.

During 2002, we acquired the Army and Navy Club
Building and Liberty Plaza for a total of approximately
$92.3 million from an unaffiliated party. These properties
are located in Washington, D.C. and consists of
approximately 260,372 square feet of office space.

During 2001, in addition to the properties
acquired in the Spieker Merger, we acquired the Three Lafayette
Centre office building for a total cost of approximately
$68.7 million from an unaffiliated party. The property is
located in Washington, D.C. and consists of approximately
259,441 square feet.

NOTE 6  SALES OF REAL
ESTATE

During 2003, we disposed of 53 office properties,
two industrial properties and four vacant land parcels in
separate transactions to various unaffiliated parties for
approximately $933.1 million. The total gain on the sale of
these properties was approximately $62.0 million which is
included in discontinued operations. The sold office properties
consisted of approximately 5,182,707 square feet and 32
residential units, and the industrial properties consisted of
approximately 216,900 square feet. We also sold partial
interests and entered into joint venture agreements on 13 office
properties consisting of approximately 3,284,431 square feet.
The total sales price to us from these partial sale transactions
was approximately $596.5 million. The net gain on the
interests sold totaled $99.1 million. The net income of the
properties that were partially sold is included in net income
from continuing operations.

65



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 6  SALES OF REAL
ESTATE  (continued)

During 2002, we disposed of 45 office properties,
four parking facilities, two industrial properties and three
land parcels in separate transactions to various unaffiliated
parties for approximately $508.3 million. The total gain on
the sale of these properties was approximately
$17.9 million. The sold office properties consisted of
approximately 3,113,189 square feet, the industrial
properties consisted of approximately 77,072 square feet,
and the parking facilities consisted of approximately 7,464
parking spaces.

During 2001, we disposed of eight office
properties, four parking facilities, a land parcel and an
apartment property in separate transactions to various
unaffiliated parties for approximately $327.8 million. The
total gain on the sale of these properties was approximately
$81.7 million. The sold office properties consisted of
approximately 879,388 square feet, the parking facilities
contained approximately 3,721 parking spaces and the apartment
property contained approximately 161 units.

During 2001, we also disposed of 19 industrial
properties that were acquired in the Spieker Partnership merger
for approximately $213.4 million. There was no gain or loss
on the sale of these properties. The sold industrial properties
consisted of approximately 4,052,476 square feet.

The net income for properties sold in 2002 and
2003 is reflected in the consolidated statements of operations
as Discontinued Operations for the periods presented. The
properties that were partially sold during 2003 are not required
to be reflected as discontinued operations in accordance with
Statement 144. Below is a summary of the results of operations
for the properties sold in 2002 and 2003, except for the
properties that were partially sold, through their respective
sale dates which are classified as discontinued operations:

|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |        |        |        | 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------- | ---------------- | ------ | ------ | ------ | ------- | ------ | ------ | ------ | ------- | ------ | ------ | ------ | 
|                                                                    |                                                                                           |                                 
|                                                                    |                                                                                           | For the years ended December 31, |                 
|                                                                    |                                                                                           |                                  |                 
|                                                                    |                                                                                           | 2003                             |                  |        | 2002   |        |         | 2001   |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           |                                 
|                                                                    |                                                                                           | (Dollars in thousands)           |                 
|Total revenues                                                      |                                                                                           | $                                | 83,829           |        |        | $      | 164,425 |        |        | $      | 123,770 |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Expenses:                                                           |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |       
|                                                                    | Depreciation and amortization                                                             |                                  |                  | 14,803 |        |        |         | 28,129 |        |        |         | 21,702 |       
|                                                                    | Property operating                                                                        |                                  |                  | 25,228 |        |        |         | 54,266 |        |        |         | 45,362 |       
|                                                                    | Ground rent                                                                               |                                  |                  | 18     |        |        |         | 164    |        |        |         | 236    |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           | Total expenses                   |                  |        | 40,049 |        |         |        | 82,559 |        |         |        | 67,300 |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           |                                  | Operating income |        |        | 43,780 |         |        |        | 81,866 |         |        |        | 56,470 | 
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Other income/expense:                                               |                                                                                           |                                  |                  |        |        |        |         |        |        |        |         |       
|                                                                    | Interest/dividend income                                                                  |                                  |                  | 158    |        |        |         | 233    |        |        |         | 217    |       
|                                                                    | Interest expense and amortization of deferred
    financing costs and prepayment expenses |                                  |                  | (20    | )      |        |         | (346   | )      |        |         | (849   | )     
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|                                                                    |                                                                                           | Total other income/expense       |                  |        | 138    |        |         |        | (113   | )      |         |        | (632   | )     
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Income before income taxes and net gain on sales
    of real estate |                                                                                           |                                  | 43,918           |        |        |        | 81,753  |        |        |        | 55,838  |       
|Income taxes                                                        |                                                                                           |                                  | 67               |        |        |        | (369    | )      |        |        | (92     | )     
|Net gain on sales of real estate                                    |                                                                                           |                                  | 61,953           |        |        |        | 17,926  |        |        |        |        |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Net income                                                          |                                                                                           | $                                | 105,938          |        |        | $      | 99,310  |        |        | $      | 55,746  |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       
|Property net operating income from discontinued
    operations      |                                                                                           | $                                | 58,601           |        |        | $      | 110,159 |        |        | $      | 78,408  |       
|                                                                    |                                                                                           |                                  |                  |        |        |        |         |        |       

Segment Reporting

For segment reporting purposes, the office
properties, apartment properties and the land parcels that were
sold are included in the Office Properties segment
and the industrial properties and parking facilities that were
sold are included in the Corporate and Other segment.

66



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 7  INVESTMENT IN
PREFERRED STOCK

The following investment is included in Prepaid
Expenses and Other Assets:

In July 1998, 50,000 preferred shares of CT
Convertible Trust I, an investment management and real
estate finance company, were acquired for approximately
$48.5 million. The preferred shares have a liquidation
preference of $1,000 each. The discount of $1.5 million is
being amortized as additional dividend income over the term of
20 years. The terms of the preferred shares are as follows:



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | (a) For 60% of the investment, or
    approximately $30 million of the preferred shares:



| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | the coupon rate of 8.25% per annum was fixed
    through March 31, 2002. Thereafter, the rate increased to
    the greater of:

| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | 10% per annum, increasing by 75 basis
    points per annum commencing October 1, 2004 and on each
    October 1 thereafter, or
| |  | a rate equal to Capital Trust, Inc.s then
    annual dividend per common share divided by $7.00;                             

| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | the conversion price is $7.00 per share;                         
| |  | the common share equivalent is fixed at
    4,285,714 shares; and
| |  | the preferred shares are callable through
    September 30, 2004.



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | (b) For 40% of the investment, or
    approximately $20 million of the preferred shares:



| |   |                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------
| |  | the coupon rate is 13.0% per annum and is
    fixed until October 1, 2004 when it will increase by
    75 basis points per annum; and
| |  | the preferred shares are callable at any time.                                                                                       

On September 30, 2002, CT Convertible
Trust I redeemed the non-convertible amount of its
preferred securities at par, including accrued dividends. We
received approximately $20.1 million upon the redemption.
We still have an approximate $29.3 million investment in
the convertible portion of the preferred securities of CT
Convertible Trust I.

NOTE 8  IMPAIRMENT

During 2003, an Office Property was deemed to be
impaired due to an analysis of the undiscounted cash flows. As a
result, we recognized a permanent impairment charge of
$7.5 million, which reduced the book value of the property
to its fair value of $3.8 million. Fair value was
determined as the present value of the future cash flows. This
asset and the related impairment charge are reported under the
Office Properties segment for segment reporting
purposes.

During 2001, an impairment on securities and
other investments of approximately $132.7 million was
recognized in connection with various investments and other
assets. The total impairment consisted of the investment in HQ
Global Workplaces, Inc. preferred stock, including accrued but
unpaid dividends, of approximately $90.6 million,
investments in several telecom, technology and advertising
related companies, investments in two full-service business
center joint ventures, and a portion of an investment in an
internally developed software system.

During 2001, HQ Global was in default with
respect to certain covenant and payment obligations under its
senior and mezzanine indebtedness, but received forbearance
periods from both its senior and mezzanine lenders. HQ Global
was unable to restructure its indebtedness during these
forbearance periods. Based on these circumstances and other
factors, we determined that our investment in HQ Global was not
recoverable and, therefore, recorded a permanent impairment on
100% of our investment. Subsequently, in March 2002 HQ Global
filed a voluntary petition for relief under Chapter 11 of
the U.S. Bankruptcy Code.

During 2001, our telecom, technology and
advertising related investments and full-service business center
joint venture investments experienced operating losses due, in
part, to the negative economic environment. These investments
were considered to be impaired based on their fair value as
compared to the carrying value.

67



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 8 
IMPAIRMENT  (continued)


The fair value of the investments was based on
internally prepared valuations considering the then present
economic conditions. The impairment represented our entire
investment in the respective assets, except for the internally
developed software system, for which the impairment represented
approximately one-half of the investment. These investments and
the related impairment are reported under the Corporate
and Other segment for segment reporting purposes.

During 2001, we recognized a $2.5 million
impairment on a parking facility that was held for sale because
the sales price less costs to sell was less than the carrying
amount of the property as of December 31, 2001. The asset
and the related impairment are reported under the
Corporate and Other segment for reporting purposes.

NOTE 9  INVESTMENTS IN
UNCONSOLIDATED JOINT VENTURES

The entities listed below are owned in joint
ventures by us with unaffiliated parties and are accounted for
under the equity method.

|                                                        |  |          |                   |                |             |              |           |      |  |  |       |   |  |  |       |  
|------------------------------------------------------- |  | -------- | ----------------- | -------------- | ----------- | ------------ | --------- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                        |  |          |                   |                |             |             
|                                                        |  |          |                   |                |             | Economic     |          
|                                                        |  |          |                   |                |             | Interest(a)  |          
|                                                        |  |          |                   |                |             | as of        |          
|                                                        |  |          |                   |                |             | December 31, |          
|                                                        |  |          |                   | Total Rentable |             |              |           |     
|Office Property                                         |  | Location |                   |                | Square Feet |              |           | 2003 |  |  | 2002  |  
|                                                        |  |          |                   |                |             |              |           |      |  |  |       |  
|One Post Office Square                                  |  |          | Boston, MA        |                |             |              | 765,296   |      |  |  | 50    | % |  |  | 50    | %
|75-101 Federal Street                                   |  |          | Boston, MA        |                |             |              | 813,195   |      |  |  | 51.61 | % |  |  | 51.61 | %
|Rowes Wharf(b)                                          |  |          | Boston, MA        |                |             |              | 344,645   |      |  |  | 44    | % |  |  | 44    | %
|10 & 30 South Wacker                                    |  |          | Chicago, IL       |                |             |              | 2,003,288 |      |  |  | 75    | % |  |  | 75    | %
|Bank One Center                                         |  |          | Indianapolis, IN  |                |             |              | 1,057,877 |      |  |  | 25    | % |  |  | 25    | %
|Pasadena Towers                                         |  |          | Los Angeles, CA   |                |             |              | 439,366   |      |  |  | 25    | % |  |  | 25    | %
|Promenade II                                            |  |          | Atlanta, GA       |                |             |              | 774,344   |      |  |  | 50    | % |  |  | 50    | %
|SunTrust Center                                         |  |          | Orlando, FL       |                |             |              | 640,741   |      |  |  | 25    | % |  |  | 25    | %
|Preston Commons                                         |  |          | Dallas, TX        |                |             |              | 418,604   |      |  |  | 50    | % |  |  | 50    | %
|Sterling Plaza                                          |  |          | Dallas, TX        |                |             |              | 302,747   |      |  |  | 50    | % |  |  | 50    | %
|Bank of America Tower                                   |  |          | Seattle, WA       |                |             |              | 1,537,932 |      |  |  | 50.1  | % |  |  | 50.1  | %
|One Post Street                                         |  |          | San Francisco, CA |                |             |              | 421,121   |      |  |  | 50    | % |  |  | 50    | %
|Key Center(c)                                           |  |          | Seattle, WA       |                |             |              | 472,929   |      |  |  | 100   | % |  |  | 80    | %
|1301 Avenue of the Americas (see Subsequent
    Events) |  |          | New York, NY      |                |             |              | 1,765,694 |      |  |  | 84.47 | % |  |  | 84.47 | %
|Concar                                                  |  |          | San Mateo, CA     |                |             |              | 219,318   |      |  |  | 79.96 | % |  |  | 79.96 | %
|Foundry Square IV(d)                                    |  |          | San Francisco, CA |                |             |              |          |      |  |  |      |   |  |  | 40    | %
|161 North Clark(e)                                      |  |          | Chicago, IL       |                |             |              | 1,010,520 |      |  |  | 25    | % |  |  |      |  
|Prominence in Buckhead(e)                               |  |          | Atlanta, GA       |                |             |              | 424,309   |      |  |  | 25    | % |  |  |      |  
|World Trade Center East(e)                              |  |          | Seattle, WA       |                |             |              | 186,912   |      |  |  | 25    | % |  |  |      |  
|Treat Towers(e)                                         |  |          | Walnut Creek, CA  |                |             |              | 367,313   |      |  |  | 25    | % |  |  |      |  
|Parkshore Plaza I(e)                                    |  |          | Folsom, CA        |                |             |              | 114,356   |      |  |  | 25    | % |  |  |      |  
|Parkshore Plaza II(e)                                   |  |          | Folsom, CA        |                |             |              | 155,497   |      |  |  | 25    | % |  |  |      |  
|Bridge Pointe Corporate Center I
    & II(e)            |  |          | San Diego, CA     |                |             |              | 372,653   |      |  |  | 25    | % |  |  |      |  

68



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 9  INVESTMENTS IN
UNCONSOLIDATED JOINT
VENTURES  (continued)


|                                                 |  |          |                |                |             |              |            |      |  |  |      |   |  |  |    |  
|------------------------------------------------ |  | -------- | -------------- | -------------- | ----------- | ------------ | ---------- | ---- |  |  | ---- | - |  |  | -- | -
|                                                 |  |          |                |                |             |             
|                                                 |  |          |                |                |             | Economic     |           
|                                                 |  |          |                |                |             | Interest(a)  |           
|                                                 |  |          |                |                |             | as of        |           
|                                                 |  |          |                |                |             | December 31, |           
|                                                 |  |          |                | Total Rentable |             |              |            |     
|Office Property                                  |  | Location |                |                | Square Feet |              |            | 2003 |  |  | 2002 |  
|                                                 |  |          |                |                |             |              |            |      |  |  |      |  
|1111 19th Street(e)                              |  |          | Washington, DC |                |             |              | 252,014    |      |  |  | 20   | % |  |  |   |  
|1620 L Street(e)                                 |  |          | Washington, DC |                |             |              | 156,272    |      |  |  | 20   | % |  |  |   |  
|1333 H Street(e)                                 |  |          | Washington, DC |                |             |              | 244,585    |      |  |  | 20   | % |  |  |   |  
|                                                 |  |          |                |                |             |              |            |      |  |  |      |  
|                                                 |  |          | Total          |                |             |              | 15,261,528 |      |  |  |      |   |  |  |    |  
|                                                 |  |          |                |                |             |              |            |      |  |  |      |  
|Other                                            |  |          |                |                |             |              |            |      |  |  |      |   |  |  |    |  
|Wright Runstad Associates Limited Partnership(c) |  |          |               |                |             |              |           |      |  |  |     |   |  |  | 30 | %
|Regus Equity Business Centers, LLC               |  |          |               |                |             |              |           |      |  |  |     |   |  |  | 50 | %
|HQ Global Workplaces                             |  |          |               |                |             |              |           |      |  |  |     |   |  |  | 50 | %



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Represents our approximate economic ownership
    interest for the periods presented. Net income, cash flow from
    operations and capital transactions are allocated to us and our
    joint venture partners in accordance with the respective
    partnership agreements. Our share of these items is subject to
    change based upon, among other things, the operations of the
    Property and the timing and amount of capital transactions. Our
    legal ownership may differ.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(b) |  | In 2002, in connection with the restructuring of
    the partnership, we contributed approximately $30.9 million
    to the joint venture, which increased our economic ownership of
    Rowes Wharf to 44% from 39%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(c) |  | In 2003, we acquired the remaining 20% equity
    interest in the Key Center office building from Wright Runstad
    Associates Limited Partnership (WRALP) and
    affiliates in exchange for our 30% equity interest in WRALP and
    a cash payment by us of approximately $7.9 million. In
    connection with the acquisition of Key Center, we assumed and
    subsequently repaid the mortgage debt secured by the Property.
    As a result of the acquisition, the property is now consolidated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(d) |  | In 2000, we formed a joint venture with Wilson
    Investors-California (WI, of which William
    Wilson III, one of our trustees, is a principal), through
    its interest in Wilson/ Equity Office (W/ EO, of
    which 49.9% is owned by us and 50.1% is owned by WI), and an
    unaffiliated party to develop, construct, lease and manage
    Foundry Square IV, a 225,490 square foot office building
    located in San Francisco, California. Through the sale of
    the office building in July 2003, we disposed of our 40%
    indirect interest, which includes a 10% indirect interest
    through W/ EO and WI disposed of its 10% indirect interest
    through W/ EO to an unaffiliated party. Our share of the gain on
    the sale of the property was approximately $7.1 million and
    is included in income from investments in unconsolidated joint
    ventures. Our share of the gross proceeds from the sale was
    approximately $56.6 million, which includes the repayment
    of a $44.5 million construction loan. WIs share of
    the proceeds was approximately $17.1 million.
|   
|(e) |  | In December 2003, we sold partial interests in
    these office properties and no longer consolidate their
    operations. See Note 6  Sales of Real Estate for
    more information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

69



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 9  INVESTMENTS IN
UNCONSOLIDATED JOINT
VENTURES  (continued)


Combined summarized financial information for
these unconsolidated joint ventures is as follows:

|                                                                                                                                                                 |                                              |                                                              |           |           |           |   |           |           |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------ | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                                                                                                                 |                                              |                                                             
|                                                                                                                                                                 |                                              | December 31,                                                 |          
|                                                                                                                                                                 |                                              |                                                              |          
|                                                                                                                                                                 |                                              | 2003                                                         |           |           | 2002      |  
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|                                                                                                                                                                 |                                              |                                                             
|                                                                                                                                                                 |                                              | (Dollars in thousands)                                       |          
|Balance Sheets:                                                                                                                                                  |                                              |                                                              |           |           |           |   |           |          
|                                                                                                                                                                 | Real estate, net of accumulated depreciation |                                                              | $         | 3,363,990 |           |   | $         | 2,757,699 |          
|                                                                                                                                                                 | Other assets                                 |                                                              |           | 220,837   |           |   |           | 207,740   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|                                                                                                                                                                 |                                              | Total Assets                                                 |           | $         | 3,584,827 |   |           | $         | 2,965,439 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|                                                                                                                                                                 | Mortgage debt                                |                                                              | $         | 1,308,782 |           |   | $         | 1,312,404 |          
|                                                                                                                                                                 | Other liabilities                            |                                                              |           | 127,242   |           |   |           | 112,968   |          
|                                                                                                                                                                 | Partners and shareholders equity           |                                                              |           | 2,148,803 |           |   |           | 1,540,067 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|                                                                                                                                                                 |                                              | Total Liabilities and Partners and
    Shareholders Equity |           | $         | 3,584,827 |   |           | $         | 2,965,439 | 
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|Our share of equity                                                                                                                                              |                                              | $                                                            | 1,040,373 |           |           | $ | 966,773   |          
|Net excess of cost of investments over the net
    book value of underlying net assets, net of accumulated
    depreciation of $24,456 and $20,704, respectively |                                              |                                                              | 86,859    |           |           |   | 121,042   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|Carrying value of investments in unconsolidated
    joint ventures                                                                                               |                                              | $                                                            | 1,127,232 |           |           | $ | 1,087,815 |          
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  
|Our share of unconsolidated non-recourse mortgage
    debt                                                                                                       |                                              | $                                                            | 797,268   | (a)       |           | $ | 818,975   |          
|                                                                                                                                                                 |                                              |                                                              |           |           |           |  



|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Our share of the scheduled payments of principal
    on mortgage debt for each of the next five years and thereafter
    through maturity as of December 31, 2003 is as follows:

|           |       |                      |         |         | 
|---------- | ----- | -------------------- | ------- | ------- | 
|Year       |       | Dollars in thousands |        
|           |       |                      |        
|2004       |       | $                    | 117,153 |        
|2005       |       |                      | 466,505 |        
|2006       |       |                      | 52,283  |        
|2007       |       |                      | 2,622   |        
|2008       |       |                      | 16,989  |        
|Thereafter |       |                      | 141,716 |        
|           |       |                      |        
|           | Total |                      | $       | 797,268 | 
|           |       |                      |        

70



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 9  INVESTMENTS IN
UNCONSOLIDATED JOINT
VENTURES  (continued)


|                          |                                                                                                             |                                             |                |         |         |         |   |         |         |         |   |         |         |         | 
|------------------------- | ----------------------------------------------------------------------------------------------------------- | ------------------------------------------- | -------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                          |                                                                                                             |                                            
|                          |                                                                                                             | For the years ended December 31,            |               
|                          |                                                                                                             |                                             |               
|                          |                                                                                                             | 2003                                        |                |         | 2002    |         |   | 2001    |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          |                                                                                                             |                                            
|                          |                                                                                                             | (Dollars in thousands)                      |               
|Statements of Operations: |                                                                                                             |                                             |                |         |         |         |   |         |         |         |   |        
|                          | Revenues                                                                                                    |                                             | $              | 472,124 |         |         | $ | 561,482 |         |         | $ | 509,238 |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          | Expenses:                                                                                                   |                                             |                |         |         |         |   |         |         |         |   |         |        
|                          |                                                                                                             | Interest expense and loan cost amortization |                |         | 71,618  |         |   |         | 77,020  |         |   |         | 95,389  |        
|                          |                                                                                                             | Depreciation and amortization               |                |         | 95,867  |         |   |         | 83,656  |         |   |         | 86,270  |        
|                          |                                                                                                             | Operating expenses                          |                |         | 180,087 |         |   |         | 196,936 |         |   |         | 212,202 |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          |                                                                                                             |                                             | Total expenses |         |         | 347,572 |   |         |         | 357,612 |   |         |         | 393,861 | 
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          | Net income before gain on sale of real estate and
    cumulative effect of a change in accounting principle |                                             |                | 124,552 |         |         |   | 203,870 |         |         |   | 115,377 |        
|                          | Gain on sale of real estate                                                                                 |                                             |                | 43,255  |         |         |   | 3,703   |         |         |   |        |        
|                          | Cumulative effect of a change in accounting
    principle                                                   |                                             |                |        |         |         |   |        |         |         |   | (2,279  | )      
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          | Net income                                                                                                  |                                             | $              | 167,807 |         |         | $ | 207,573 |         |         | $ | 113,098 |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|Our share of:             |                                                                                                             |                                             |                |         |         |         |   |         |         |         |   |        
|                          | Net income                                                                                                  |                                             | $              | 79,882  |         |         | $ | 106,852 |         |         | $ | 69,203  |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          | Interest expense and loan cost amortization                                                                 |                                             | $              | 50,059  |         |         | $ | 53,248  |         |         | $ | 63,105  |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          | Depreciation and amortization (real estate
    related)                                                     |                                             | $              | 53,208  |         |         | $ | 48,865  |         |         | $ | 51,021  |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        
|                          | Gain on sale of real estate                                                                                 |                                             | $              | 7,063   |         |         | $ | 429     |         |         | $ |        |        
|                          |                                                                                                             |                                             |                |         |         |         |   |         |        

NOTE 10  MORTGAGE
DEBT

We had outstanding fixed interest rate mortgage
debt of approximately $2.3 billion and $2.5 billion as
of December 31, 2003 and 2002, respectively and outstanding
variable interest rate mortgage debt of approximately
$36.0 million as of December 31, 2003 and 2002.
Payments are generally due in monthly installments of principal
and interest or interest only. As of December 31, 2003 and
2002, the effective interest rates on the fixed interest rate
mortgage debt ranged from 5.81% to 8.63%, and the weighted
average effective interest rate was approximately 7.72% and
7.70%, respectively. As of December 31, 2003 and 2002, the
weighted average variable effective interest rate was
approximately 1.72% and 1.98%, respectively. The historical
cost, net of accumulated depreciation, of encumbered properties
at December 31, 2003 and 2002 was approximately

71



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 10  MORTGAGE
DEBT  (continued)


$4.9 billion and $5.2 billion,
respectively. During the years ended December 31, 2003 and
2002, the following transactions occurred:

|                             |                                                                                                     |                        |           |          |      |   |           |          |  
|---------------------------- | --------------------------------------------------------------------------------------------------- | ---------------------- | --------- | -------- | ---- | - | --------- | -------- | -
|                             |                                                                                                     |                       
|                             |                                                                                                     | For the years ended    |          
|                             |                                                                                                     | December 31,           |          
|                             |                                                                                                     |                        |          
|                             |                                                                                                     | 2003                   |           |          | 2002 |  
|                             |                                                                                                     |                        |           |          |      |  
|                             |                                                                                                     |                       
|                             |                                                                                                     | (Dollars in thousands) |          
|Balance at beginning of year |                                                                                                     | $                      | 2,520,474 |          |      | $ | 2,662,099 |         
|                             | Repayments and scheduled principal amortization                                                     |                        |           | (233,809 | )    |   |           | (156,052 | )
|                             | Proceeds from financings                                                                            |                        |           |         |      |   |           | 14,427   |  
|                             | Assumed through property acquisitions (See
    Note 9 Investments in Unconsolidated Joint Ventures) |                        |           | 59,166   |      |   |           |         |  
|                             | Repaid upon sale of property                                                                        |                        |           | (16,279  | )    |   |           |         |  
|                             |                                                                                                     |                        |           |          |      |  
|Balance at end of year(a)    |                                                                                                     | $                      | 2,329,552 |          |      | $ | 2,520,474 |         
|                             |                                                                                                     |                        |           |          |      |  



---



|    |                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|(a) | Excludes net discount on mortgage debt of
    approximately $13,663 and $12,584 as of December 31, 2003
    and 2002, respectively.

Repayment Schedule

Scheduled payments of principal for the next five
years and thereafter through maturity as of December 31,
2003 are as follows:

|           |  |                      |           | 
|---------- |  | -------------------- | --------- | 
|Year       |  | Dollars in thousands |          
|           |  |                      |          
|2004       |  | $                    | 375,761   | 
|2005       |  |                      | 568,787   | 
|2006       |  |                      | 343,878   | 
|2007       |  |                      | 237,024   | 
|2008       |  |                      | 132,061   | 
|Thereafter |  |                      | 672,041   | 
|           |  |                      |          
|Total      |  | $                    | 2,329,552 | 
|           |  |                      |          

NOTE 11  LINES OF
CREDIT

Our previous $1.0 billion line of credit
matured in May 2003 at which time we obtained a new
$1.0 billion line of credit. Our $1.0 billion line of
credit bears interest at LIBOR plus 60 basis points and
matures in May 2006. We also pay an annual facility fee of
$2.0 million payable quarterly. In addition, a competitive
bid option, whereby the lenders participating in the credit
facility may bid on the interest to be charged which may result
in an interest rate lower than LIBOR plus 60 basis points,
is available for up to $350 million of the borrowings under
the credit facility. As of December 31, 2003,
$334 million was outstanding.

In December 2003 we obtained a $1.0 billion
364-day credit facility. This credit facility bears interest at
LIBOR plus 65 basis points and matures in December 2004. We
also pay an annual facility fee of $1.5 million payable
quarterly. In addition, a competitive bid option, whereby the
lenders participating in the credit facility bid on the interest
to be charged which may result in an interest rate lower than
LIBOR plus 65 basis points, is available for up to
$350 million of the borrowings under the credit facility.

72



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 11  LINES OF
CREDIT  (continued)


Agreements or instruments relating to the lines
of credit contain certain financial restrictions and
requirements described below. As of December 31, 2003, we
were in compliance with each of these financial restrictions and
requirements.



| |   |                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | total liabilities to total asset value may not
    exceed 0.55:1 at any time;                                                                                                                                                 
|
| |  | earnings before interest, taxes, depreciation and
    amortization to interest expense may not be less than 2.00:1;                                                                                                           
|
| |  | cash flow to fixed charges may not be less than
    1.5:1;                                                                                                                                                                    
|
| |  | secured debt to total asset value may not exceed
    0.40:1;                                                                                                                                                                  
|
| |  | unsecured debt to unencumbered asset value may
    not exceed 0.55:1;                                                                                                                                                         
|
| |  | unencumbered net operating income to unsecured
    debt service may not be less than 2.0:1;                                                                                                                                   
|
| |  | consolidated tangible net worth may not be less
    than the sum of $10.7 billion and 70% of all net offering
    proceeds received by us or Equity Office after December 31,
    2002;                                       
|
| |  | we may not pay any distributions on Common Shares
    and Units in excess of 90% of annual Funds From
    Operations; and                                                                                                     
|
| |  | our investments in unimproved assets, interest in
    taxable REIT subsidiaries, developments, unconsolidated joint
    ventures, mortgages and securities, in the aggregate, may not
    exceed 25% of our total asset value.

NOTE 12  UNSECURED
NOTES

During 2003, we repaid $700 million of
unsecured notes upon their maturity and issued $500 million
5.88% unsecured notes due January 15, 2013. The table below
summarizes the unsecured notes outstanding as of
December 31, 2003:

|              |  |                        |       |  |           |  |       |           |  |   |          |     |  |  |          | 
|------------- |  | ---------------------- | ----- |  | --------- |  | ----- | --------- |  | - | -------- | --- |  |  | -------- | 
|              |  | Coupon                 |       |  | Effective |  |       | Principal |  |   | Maturity |    
|Original Term |  | Rate                   |       |  | Rate(a)   |  |       | Balance   |  |   | Date     |    
|              |  |                        |       |  |           |  |       |           |  |   |          |    
|              |  |                       
|              |  | (Dollars in thousands) |      
|5 Years       |  |                        | 6.50% |  |           |  | 4.59% |           |  | $ | 300,000  | (b) |  |  | 01/15/04 | 
|9 Years       |  |                        | 6.90% |  |           |  | 6.27% |           |  |   | 100,000  | (b) |  |  | 01/15/04 | 
|5 Years       |  |                        | 6.80% |  |           |  | 6.10% |           |  |   | 200,000  | (b) |  |  | 05/01/04 | 
|6 Years       |  |                        | 6.50% |  |           |  | 5.31% |           |  |   | 250,000  | (b) |  |  | 06/15/04 | 
|7 Years       |  |                        | 7.24% |  |           |  | 7.26% |           |  |   | 30,000   | (b) |  |  | 09/01/04 | 
|8 Years       |  |                        | 6.88% |  |           |  | 6.40% |           |  |   | 125,000  |     |  |  | 02/01/05 | 
|7 Years       |  |                        | 6.63% |  |           |  | 4.99% |           |  |   | 400,000  |     |  |  | 02/15/05 | 
|7 Years       |  |                        | 8.00% |  |           |  | 6.49% |           |  |   | 100,000  |     |  |  | 07/19/05 | 
|8 Years       |  |                        | 7.36% |  |           |  | 7.69% |           |  |   | 50,000   |     |  |  | 09/01/05 | 
|6 Years       |  |                        | 8.38% |  |           |  | 7.65% |           |  |   | 500,000  |     |  |  | 03/15/06 | 
|9 Years       |  |                        | 7.44% |  |           |  | 7.74% |           |  |   | 50,000   |     |  |  | 09/01/06 | 
|10 Years      |  |                        | 7.13% |  |           |  | 6.74% |           |  |   | 100,000  |     |  |  | 12/01/06 | 
|9 Years       |  |                        | 7.00% |  |           |  | 6.80% |           |  |   | 1,500    |     |  |  | 02/02/07 | 
|9 Years       |  |                        | 6.88% |  |           |  | 6.83% |           |  |   | 25,000   |     |  |  | 04/30/07 | 
|9 Years       |  |                        | 6.76% |  |           |  | 6.76% |           |  |   | 300,000  |     |  |  | 06/15/07 | 
|10 Years      |  |                        | 7.41% |  |           |  | 7.70% |           |  |   | 50,000   |     |  |  | 09/01/07 | 

73



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 12  UNSECURED
NOTES  (continued)


|              |                            |                        |       |       |           |  |       |           |  |  |           |           |           |  |          |  |  | 
|------------- | -------------------------- | ---------------------- | ----- | ----- | --------- |  | ----- | --------- |  |  | --------- | --------- | --------- |  | -------- |  |  | 
|              |                            | Coupon                 |       |       | Effective |  |       | Principal |  |  | Maturity  |          
|Original Term |                            | Rate                   |       |       | Rate(a)   |  |       | Balance   |  |  | Date      |          
|              |                            |                        |       |       |           |  |       |           |  |  |           |          
|              |                            |                       
|              |                            | (Dollars in thousands) |      
|7 Years       |                            |                        | 7.75% |       |           |  | 7.91% |           |  |  | 600,000   |           |           |  | 11/15/07 | 
|10 Years      |                            |                        | 6.75% |       |           |  | 6.97% |           |  |  | 150,000   |           |           |  | 01/15/08 | 
|10 Years      |                            |                        | 6.75% |       |           |  | 7.01% |           |  |  | 300,000   |           |           |  | 02/15/08 | 
|8 Years(c)    |                            |                        | 7.25% |       |           |  | 7.64% |           |  |  | 325,000   |           |           |  | 11/15/08 | 
|10 Years      |                            |                        | 6.80% |       |           |  | 6.94% |           |  |  | 500,000   |           |           |  | 01/15/09 | 
|10 Years      |                            |                        | 7.25% |       |           |  | 7.14% |           |  |  | 200,000   |           |           |  | 05/01/09 | 
|11 Years      |                            |                        | 7.13% |       |           |  | 6.97% |           |  |  | 150,000   |           |           |  | 07/01/09 | 
|10 Years      |                            |                        | 8.10% |       |           |  | 8.22% |           |  |  | 360,000   |           |           |  | 08/01/10 | 
|10 Years      |                            |                        | 7.65% |       |           |  | 7.20% |           |  |  | 200,000   |           |           |  | 12/15/10 | 
|10 Years      |                            |                        | 7.00% |       |           |  | 6.83% |           |  |  | 1,100,000 |           |           |  | 07/15/11 | 
|10 Years      |                            |                        | 6.75% |       |           |  | 7.02% |           |  |  | 500,000   |           |           |  | 02/15/12 | 
|10 Years      |                            |                        | 5.88% |       |           |  | 5.98% |           |  |  | 500,000   |           |           |  | 01/15/13 | 
|20 Years      |                            |                        | 7.88% |       |           |  | 8.08% |           |  |  | 25,000    |           |           |  | 12/01/16 | 
|20 Years      |                            |                        | 7.35% |       |           |  | 8.08% |           |  |  | 200,000   |           |           |  | 12/01/17 | 
|20 Years      |                            |                        | 7.25% |       |           |  | 7.54% |           |  |  | 250,000   |           |           |  | 02/15/18 | 
|30 Years      |                            |                        | 7.50% |       |           |  | 8.24% |           |  |  | 150,000   |           |           |  | 10/01/27 | 
|30 Years      |                            |                        | 7.25% |       |           |  | 7.31% |           |  |  | 225,000   |           |           |  | 06/15/28 | 
|30 Years      |                            |                        | 7.50% |       |           |  | 7.55% |           |  |  | 200,000   |           |           |  | 04/19/29 | 
|30 Years      |                            |                        | 7.88% |       |           |  | 7.94% |           |  |  | 300,000   |           |           |  | 07/15/31 | 
|              |                            |                        |       |       |           |  |       |           |  |  |           |          
|              | Weighted Average/ Subtotal |                        |       | 7.15% |           |  |       | 6.95%     |  |  |           | 8,816,500 |           |  |          |  | 
|              |                            |                        |       |       |           |  |       |           |  |  |           |          
|Net premium   |                            |                        |       |       |           |  |       |           |  |  | 12,412    |           |           |  |          | 
|              |                            |                        |       |       |           |  |       |           |  |  |           |          
|              |                            | Total                  |       |       |           |  |       |           |  |  |           | $         | 8,828,912 |  |          |  |  | 
|              |                            |                        |       |       |           |  |       |           |  |  |           |          



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes the effect of settled interest rate
    protection and interest rate swap agreements, offering and
    transaction costs and premiums and discounts on certain
    unsecured notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(b) |  | Through 2004, $880 million of unsecured
    notes will mature and become payable. The $400 million of
    unsecured notes that matured in January 2004 were repaid with
    our line of credit. We anticipate repaying the remaining notes
    with our lines of credit, proceeds from additional debt and/or
    equity offerings or proceeds from property dispositions.                                                                                                                                                                                                                                                                                                                                                        
|   
|(c) |  | The notes are exchangeable into Equity Office
    Common Shares at an exchange rate of $34.00 per share. If
    the closing price of a Common Share at the time a holder
    exercises their exchange right is less than the exchange price
    of $34.00, the holder will receive, in lieu of Common Shares,
    cash in an amount equal to 97% of the product of the number of
    Common Shares into which the principal amount of notes subject
    to such exercise would otherwise be exchangeable and the current
    market price per Common Share. Upon exchange of a $1,000 note
    for Common Shares of Equity Office, we would issue a
    corresponding number of Units to Equity Office on a one-for-one
    basis.

Restrictions and Covenants under Unsecured
Indebtedness

Agreements or instruments relating to our
unsecured notes contain certain financial restrictions and
requirements described below. As of December 31, 2003, we
were in compliance with each of these financial restrictions and
requirements.

74



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 12  UNSECURED
NOTES  (continued)


Restrictions and Covenants

Set forth below are the financial restrictions
and requirements to which we are subject under our unsecured
note indentures and our performance under each covenant as of
December 31, 2003:

|                                                                                                             |  |                    |      |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ---- | -
|Covenants(a) (in each case as defined in the respective indenture)                                           |  | Actual Performance |     
|                                                                                                             |  |                    |     
|Debt to Adjusted Total Assets may not be greater
    than 60%                                                |  |                    | 47   | %
|Secured Debt to Adjusted Total Assets may not be
    greater than 40%                                        |  |                    | 12   | %
|Consolidated Income Available for Debt Service to
    Annual Debt Service charge may not be less than 1.50:1 |  |                    | 2.45 |  
|Total Unencumbered Assets to Unsecured Debt may
    not be less than 150%(b)                                 |  |                    | 219  | %



---



|    |  |                                                                                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The calculations of our actual performance under
    each covenant are included as Appendix A to this
    Form 10-K.          
|   
|(b) |  | The outstanding unsecured notes assumed in the
    merger with Spieker Partnership are subject to a minimum ratio
    of 165%.

NOTE 13  DERIVATIVE FINANCIAL
INSTRUMENTS

Forward-Starting Interest Rate Swaps

As of December 31, 2003 and 2002, we had
$1.3 billion and $1.1 billion of forward-starting
interest rate swaps outstanding, respectively. The outstanding
swaps will hedge the future interest payments of debt
anticipated to be issued in 2004. The market value of the swaps
at December 31, 2003 represented a net liability to us of
approximately $10.4 million (approximately
$11.1 million is recorded in other assets and
$21.5 million is recorded in other liabilities). The market
value at December 31, 2002 was $18.6 million (all of
which is included in other liabilities). The net market value is
also included in accumulated other comprehensive income. No
hedge ineffectiveness has been recorded in earnings as these
swaps were perfectly effective. As of March 5, 2004, the
market value of these forward-starting interest rate swaps
represented a net liability to us of approximately $64.9
million. The market value of the forward-starting interest rate
swaps is dependent upon existing market interest rates and swap
spreads, which change over time.

Upon settlement of the swaps, we may be obligated
to pay the counterparties a settlement payment, or alternatively
to receive settlement proceeds from the counterparties. In
accordance with SFAS No. 133, if the swaps are deemed
to be effective hedges upon settlement, any monies paid or
received will be amortized to interest expense over the term of
the respective hedged interest payments. If the swaps are deemed
to be only partially effective hedges upon settlement, a portion
of the monies paid or received will be immediately recognized in
earnings and the remainder will be amortized to interest expense
over the term of the respective hedged interest payments. If the
swaps are deemed to be completely ineffective hedges upon
settlement, any monies paid or received will be immediately
recognized in earnings.

Interest Rate Swaps

During 2002 and 2001, we entered into and settled
several interest rate swap agreements that hedged certain
unsecured notes. In each case, we were the variable interest
rate payer and the counterparty was the fixed rate payer. The
variable interest rates were based on various spreads over
LIBOR. The settlement dates corresponded to the interest payment
dates of the respective unsecured notes being hedged. Each of
the interest rate swap agreements were to terminate on the
maturity date of the respective unsecured notes being hedged.
The interest rate swap agreements were designated as fair value
hedges. As of December 31, 2002, all of the interest rate
swaps had been terminated.

75



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                                     
|--------- | ----------------------------------------------------
|NOTE 14  | MINORITY INTERESTS IN PARTIALLY OWNED
    PROPERTIES

Although the financial condition and results of
operations of the following Properties are consolidated, there
are unaffiliated parties that own an interest in these
Properties. We consolidate these properties because we own at
least 50% of the respective ownership entities and control major
decisions. All of the Properties are Office Properties except
for Fremont Bayside, which is an Industrial Property. Our legal
ownership and economic interest in each Property is
substantially the same. We have additional Properties that are
partially owned by unaffiliated parties where our approximate
economic ownership is 100%.

The amounts shown below approximate our economic
ownership interest for the periods presented. Net income, cash
flow from operations and capital transactions are allocated to
us and our minority interest partners in accordance with the
respective partnership agreements. Our share of these items is
subject to change based upon, among other things, the operations
of the Property and the timing and amount of capital
transactions.

|                                                         |  |          |                   |                |             |                      |           |      |  |  |        |  |  |  |        | 
|-------------------------------------------------------- |  | -------- | ----------------- | -------------- | ----------- | -------------------- | --------- | ---- |  |  | ------ |  |  |  | ------ | 
|                                                         |  |          |                   |                |             |                     
|                                                         |  |          |                   |                |             | Economic Interest as |          
|                                                         |  |          |                   |                |             | of December 31,      |          
|                                                         |  |          |                   | Total Rentable |             |                      |           |     
|Property                                                 |  | Location |                   |                | Square Feet |                      |           | 2003 |  |  | 2002   | 
|                                                         |  |          |                   |                |             |                      |           |      |  |  |        | 
|Joint Ventures with Contractual Termination
    Dates    |  |          |                   |                |             |                      |           |      |  |  |        |  |  |  |        | 
|The Plaza at La Jolla Village                            |  |          | San Diego, CA     |                |             |                      | 635,419   |      |  |  | 66.7%  |  |  |  | 66.7%  | 
|222 Berkley Street                                       |  |          | Boston, MA        |                |             |                      | 519,608   |      |  |  | 91.5%  |  |  |  | 91.5%  | 
|500 Boylston Street                                      |  |          | Boston, MA        |                |             |                      | 706,864   |      |  |  | 91.5%  |  |  |  | 91.5%  | 
|Washington Mutual Tower                                  |  |          | Seattle, WA       |                |             |                      | 1,207,823 |      |  |  | 75.0%  |  |  |  | 75.0%  | 
|Wells Fargo Center                                       |  |          | Minneapolis, MN   |                |             |                      | 1,117,439 |      |  |  | 75.0%  |  |  |  | 75.0%  | 
|Foundry Square II                                        |  |          | San Francisco, CA |                |             |                      | 505,480   |      |  |  | 87.5%  |  |  |  | 87.5%  | 
|Ferry Building(a)                                        |  |          | San Francisco, CA |                |             |                      | 243,812   |      |  |  | 100.0% |  |  |  | 100.0% | 
|2951 28th Street                                         |  |          | Santa Monica, CA  |                |             |                      | 85,000    |      |  |  | 98.0%  |  |  |  | 98.0%  | 
|Fremont Bayside                                          |  |          | Oakland, CA       |                |             |                      | 103,920   |      |  |  | 90.0%  |  |  |  | 90.0%  | 
|                                                         |  |          |                   |                |             |                      |           |      |  |  |        | 
|                                                         |  |          |                   |                |             |                      | 5,125,365 |      |  |  |        |  |  |  |        | 
|                                                         |  |          |                   |                |             |                      |           |      |  |  |        | 
|Joint Ventures without Contractual Termination
    Dates |  |          |                   |                |             |                      |           |      |  |  |        |  |  |  |        | 
|Waters Edge                                             |  |          | Los Angeles, CA   |                |             |                      | 243,433   |      |  |  | 87.5%  |  |  |  | 87.5%  | 
|Park Avenue Tower                                        |  |          | New York, NY      |                |             |                      | 568,060   |      |  |  | 94.0%  |  |  |  | 94.0%  | 
|850 Third Avenue                                         |  |          | New York, NY      |                |             |                      | 568,867   |      |  |  | 94.0%  |  |  |  | 94.0%  | 
|                                                         |  |          |                   |                |             |                      |           |      |  |  |        | 
|                                                         |  |          |                   |                |             |                      | 1,380,360 |      |  |  |        |  |  |  |        | 
|                                                         |  |          |                   |                |             |                      |           |      |  |  |        | 
|Total                                                    |  |          |                   |                |             |                      | 6,505,725 |      |  |  |        |  |  |  |        | 
|                                                         |  |          |                   |                |             |                      |           |      |  |  |        | 



---

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | A joint venture between us and other unaffiliated
    parties leased the Ferry Building from the City and County of
    San Francisco, through its Port Commission (the
    Port). Under this lease, the Port is paid a stated
    base rent. In addition, once the lessee has received from the
    project a cumulative preferred return of 8% (prior to
    stabilization) and 11% (after stabilization), then 50% of the
    proceeds from the operation and ownership of the project are
    paid to the Port as percentage rent.

The joint venture redeveloped the Ferry Building
in a manner to permit the use of federal rehabilitation tax
credits (Historic Tax Credits). Since the original
members of the joint venture could not take full advantage of
the Historic Tax Credits, the joint venture admitted a new
member who could do so. This investor member has contributed
approximately $21.3 million in equity and has committed to
contribute an additional $3.5 to fund a portion of the Total
Project Estimated Costs for the project, and will be entitled to
a

76



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


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

preferred return with an effective annual rate of
approximately 3% on its capital investment. The investor
members interest in the joint venture is subject to
put/call rights during the sixth and seventh years after the
Ferry Building is placed in service. Upon the purchase of the
investor members interest pursuant to the put/call, it is
estimated that the joint venture will retain approximately
$11 million of the capital contributed by the investor
member, based on a formula to determine the purchase price for
the investor members interest and after taking into
account the preferred return that will have been paid to the
investor member by such time. Through the creation of a master
lease, our effective ownership percentage in the net cash flow
of the Ferry Building project is approximately 100% after the
payment to the Port of the percentage rent described above and
the distribution of the preferred returns.

NOTE 15  PARTNERS
CAPITAL AND MANDATORILY REDEEMABLE PREFERRED UNITS

Units

The following table presents the changes in the
issued and outstanding Units since January 1, 2002:

|                            |                                                                                                        |                     |             |             |      |  |             |            |  
|--------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------- | ----------- | ----------- | ---- |  | ----------- | ---------- | -
|                            |                                                                                                        |                    
|                            |                                                                                                        | For the years ended |            
|                            |                                                                                                        | December 31,        |            
|                            |                                                                                                        |                     |            
|                            |                                                                                                        | 2003                |             |             | 2002 | 
|                            |                                                                                                        |                     |             |             |      | 
|Outstanding at January 1,   |                                                                                                        |                     | 461,407,729 |             |      |  | 471,038,975 |           
|                            | Repurchases/retired(a)                                                                                 |                     |             | (14,236,400 | )    |  |             | (7,920,854 | )
|                            | Units redeemed for cash                                                                                |                     |             | (240,240    | )    |  |             | (3,727,925 | )
|                            | Issued to Equity Office related to common shares
    issued for share options exercised                |                     |             | 1,661,333   |      |  |             | 1,739,863  |  
|                            | Issued to Equity Office related to restricted
    shares and share awards issued, net of cancellations |                     |             | 900,196     |      |  |             | 214,291    |  
|                            | Issued to Equity Office related to Common Shares
    issued through the Dividend Reinvestment Program  |                     |             |            |      |  |             | 63,379     |  
|                            |                                                                                                        |                     |             |             |      | 
|Outstanding at December 31, |                                                                                                        |                     | 449,492,618 |             |      |  | 461,407,729 |           
|                            |                                                                                                        |                     |             |             |      | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In July 2002, Equity Office announced a Common
    Share repurchase program allowing for the repurchase of up to
    $200 million of Common Shares, which was later increased to
    $400 million in November 2002 and to $600 million in
    March 2003, over the next 12 months at the discretion of
    management. The Common Shares may be repurchased in the open
    market or privately negotiated transactions. During 2003 and
    2002, 14,236,400 and 7,901,900 Common Shares were
    repurchased at an average price of $25.53 and $24.92 for
    approximately $363.5 million and $196.9 million in the
    aggregate, respectively. In connection with the repurchases, we
    purchased from Equity Office and retired a corresponding number
    of Units for an aggregate purchase price equal to the aggregate
    purchase price for all Common Share repurchases.

Ownership of EOP Partnership

As of December 31, 2003 and 2002, Equity
Office had a 1% general partnership interest and an approximate
88.1% limited partnership interest in us, respectively. The
remaining limited partners had an approximate 10.9% interest in
us, respectively and consist of various individuals and entities
that contributed their properties in exchange for partnership
interests. Each of our limited partners, excluding Equity
Office, may, subject to certain limitations, require that we
redeem its Units. Under our partnership agreement, Equity Office
has the right to assume directly and satisfy the redemption
right of a limited partner by issuing its Common Shares or cash
in exchange for any Units tendered for redemption. If Equity
Office does not assume our obligation to redeem the Units, upon
redemption, the limited partner will receive cash in an amount
equal

77



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 15   PARTNERS
CAPITAL AND MANDATORILY REDEEMABLE PREFERRED
UNITS  (continued)

to the market value of the Common Shares for
which the Units would have been redeemed if Equity Office had
elected to assume and satisfy our obligation by paying Common
Shares. Under an assignment and assumption agreement entered
into on June 29, 2001, if Equity Office elects to assume
directly and satisfy the redemption right of a limited partner,
we are entitled to make the election as to whether Equity Office
issues Common Shares or cash in exchange for Units tendered for
redemption.

Distributions

Distributions are declared and paid quarterly to
holders of Units as of the record dates of each declaration. The
current quarterly distribution is $0.50 per Unit. For the
years ended December 31, 2003, 2002 and 2001, the per unit
distributions were $2.00, $2.00 and $1.90, respectively.

Mandatorily Redeemable Preferred
Units

Under the terms of the Series B Convertible,
Cumulative Redeemable Preferred Units (Series B
Preferred Units), in connection with any redemption by
Equity Office of its outstanding 5.25% Series B
Convertible, Cumulative Redeemable Preferred Shares, we are
obligated to provide to Equity Office cash equal to the
redemption price and one Series B Preferred Unit is
required to be canceled with respect to each Series B
Preferred Share redeemed by Equity Office. The Series B
Preferred Units are mandatorily redeemable by Equity Office on
February 15, 2008 at a price of $50.00 per share, plus
accumulated and unpaid distributions to the redemption date.

Preferred Units

Listed below is a summary of our outstanding
preferred units. We are the original issuer of our remaining
outstanding series of preferred units (Series C and G) and
have recorded the deferred issuance costs associated with these
preferred units to partners capital. Upon any redemption
of these preferred units, we will recognize the deferred
issuance costs as an additional preferred distribution in the
determination of net income available for unitholders in
accordance with EITF Topic D-42. The preferred unitholders
are entitled to receive, when and as authorized by the Board of
Trustees of Equity Office, cumulative preferential cash
distributions. We are obligated to redeem the preferred units at
their liquidation preference plus all accrued distributions in
connection with any redemption by Equity Office of the
corresponding series of Equity Office preferred shares.

|       |  |              |       |   |             |         |       |             |  |   |                           |  |  |  |                       | 
|------ |  | ------------ | ----- | - | ----------- | ------- | ----- | ----------- |  | - | ------------------------- |  |  |  | --------------------- | 
|       |  |              |       |   |             | Current |       |             | 
|       |  |              |       |   |             | Balance |       |             | 
|       |  | Annual       |       |   | Liquidation |         |       | Outstanding |  |   |                          
|       |  | Distribution |       |   | Preference  |         |       | (Dollars in |  |   | Equity Offices Voluntary | 
|Series |  | Rate         |       |   | Per Unit    |         |       | thousands)  |  |   | Redemption Date(a)        | 
|       |  |              |       |   |             |         |       |             |  |   |                           | 
|C(b)   |  |              | 8.625 | % |             | $       | 25.00 |             |  | $ | 114,073                   |  |  |  | on or after 12/8/2003 | 
|G(c)   |  |              | 7.75  | % |             | $       | 25.00 |             |  | $ | 212,500                   |  |  |  | on or after 7/29/2007 | 

78



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                                                                   
|--------- | ----------------------------------------------------------------------------------
|NOTE 15  | PARTNERS CAPITAL AND MANDATORILY
    REDEEMABLE PREFERRED
    UNITS  (continued)

The annual per unit distributions were as follows:

|            |  |                                  |           |  |      |   |           |      |  |   |           | 
|----------- |  | -------------------------------- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|            |  |                                 
|            |  | For the years ended December 31, |          
|            |  |                                  |          
|            |  | 2003                             |           |  | 2002 |   |           | 2001 | 
|            |  |                                  |           |  |      |   |           |      | 
|Series A(c) |  |                                  |          |  |      | $ | 1.3844167 |      |  | $ | 2.245     | 
|Series B    |  | $                                | 2.625     |  |      | $ | 2.625     |      |  | $ | 2.625     | 
|Series C(b) |  | $                                | 2.15625   |  |      | $ | 2.15625   |      |  | $ | 2.15625   | 
|Series D(d) |  |                                  |          |  |      |   |          |      |  | $ | 0.8728125 | 
|Series E(e) |  | $                                | 1.3015625 |  |      | $ | 1.96875   |      |  | $ | 0.984375  | 
|Series F(f) |  | $                                | 1.00      |  |      | $ | 2.00      |      |  | $ | 1.00      | 
|Series G(c) |  | $                                | 1.9375    |  |      | $ | 0.7427083 |      |  |   |          | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Equity Office may redeem the corresponding series
    of its preferred shares during these periods solely out of the
    sale proceeds of other equity shares of Equity Office, except
    for the portion of the redemption price equal to any accrued but
    unpaid dividends. Under our partnership agreement, sale proceeds
    from the sale of shares by Equity Office must be contributed to
    us in exchange for additional units. The number of shares
    redeemed is limited to the aggregate sales proceeds received
    from such other equity shares of Equity Office. Equity Office
    may acquire any outstanding preferred shares that have been
    transferred to a charitable beneficiary under Article VII
    of the declaration of trust of Equity Office because they were
    owned or acquired by a shareholder of Equity Office in violation
    of the ownership limits. If Equity Office redeems or acquires
    any or all of its outstanding preferred shares, we will redeem
    and cancel an equal number of preferred units and provide cash
    to Equity Office with respect thereto in an amount equal to the
    amount paid with respect to the Equity Office preferred shares
    redeemed or acquired by Equity Office. We are not subject to
    sinking fund requirements pertaining to the preferred units.
|   
|(b) |  | In January 2004, Equity Office redeemed the
    Series C Preferred Shares. See Note 26 
    Subsequent Events.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(c) |  | In July 2002, we issued 8,500,000 7.75%
    Series G Cumulative Redeemable Preferred Units to Equity
    Office in exchange for Equity Offices contribution of the
    proceeds of its issuance and sale of 8,500,000 7.75%
    Series G Cumulative Redeemable Preferred Shares in an
    offering that closed July 29, 2002. On that same date,
    substantially all of the net proceeds from the issuance of the
    Series G Preferred Units, totaling approximately
    $206.1 million were used to redeem the Series A
    Preferred Units from Equity Office and in turn, Equity Office
    used the proceeds to redeem its 7,994,000 outstanding 8.98%
    Series A Cumulative Redeemable Preferred Shares. In
    December 2003, the terms of the Series G Preferred Units
    were amended to require our consent to any redemption by Equity
    Office of these units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(d) |  | In November 2001, Equity Office redeemed its
    4,250,000 outstanding 9.45% Cumulative Redeemable Series D
    Preferred Shares, which were issued in connection with the
    Spieker Merger, at a redemption price of $25.00 per share,
    plus accrued and unpaid distributions for the period from
    October 1, 2001 to the redemption date of
    $0.2821875 per share, or an aggregate redemption price of
    approximately $107.4 million. In connection with such
    redemption, we redeemed all of the Series D Preferred Units
    from Equity Office.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(e) |  | On June 27, 2003, Equity Office redeemed its
    6,000,000 outstanding 7.875% Series E Cumulative Redeemable
    Preferred Shares, which were issued in connection with the
    Spieker Merger, at a redemption price of $25.00 per share
    for an aggregate redemption price of approximately
    $151.9 million, which includes approximately
    $1.9 million of accrued and unpaid distributions. In
    connection with such redemption, we redeemed all of the
    Series E Preferred Units from Equity Office.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

79



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




|          |                                                                                   
|--------- | ----------------------------------------------------------------------------------
|NOTE 15  | PARTNERS CAPITAL AND MANDATORILY
    REDEEMABLE PREFERRED
    UNITS  (continued)



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) |  | On June 30, 2003, Equity Office redeemed its
    4,000,000 outstanding 8.0% Series F Cumulative Redeemable
    Preferred Shares, which were issued in connection with the
    Spieker Merger, at a redemption price of $25.00 per share
    for an aggregate redemption price of $100.0 million. In
    connection with such redemption, we redeemed all of the
    Series F Preferred Units from Equity Office.

Put Option Settlement

As of December 31, 2000, 1,717,844
redeemable units were outstanding which related to Common Shares
subject to a put option agreement entered into with an affiliate
of the Wright Runstad & Company in connection with the
acquisition of certain Properties in December 1997. In September
2001, we paid approximately $1.4 million in settlement of
this put option. We previously recognized approximately
$4.1 million as a total potential payment for the put
option exercise between the period from August 1999 to August
2000. The difference of approximately $2.7 million between
the $4.1 million previously recognized and the
$1.4 million actually paid was recognized as a put option
settlement.

NOTE 16  FUTURE MINIMUM
RENTS

Future minimum rental receipts due on
noncancelable operating leases at the Office Properties and
Industrial Properties as of December 31, 2003 were as
follows:

|           |  |                      |            | 
|---------- |  | -------------------- | ---------- | 
|Year       |  | Dollars in thousands |           
|           |  |                      |           
|2004       |  | $                    | 2,352,633  | 
|2005       |  |                      | 2,120,951  | 
|2006       |  |                      | 1,813,667  | 
|2007       |  |                      | 1,520,989  | 
|2008       |  |                      | 1,244,579  | 
|Thereafter |  |                      | 3,540,284  | 
|           |  |                      |           
|Total      |  | $                    | 12,593,103 | 
|           |  |                      |           

We are subject to the usual business risks
associated with the collection of the above scheduled rents. The
future minimum rental receipts due on noncancelable operating
leases from our investments in unconsolidated joint ventures are
not included in the above schedule.

NOTE 17  FUTURE MINIMUM LEASE
PAYMENTS

Certain Office Properties are subject to ground
leases. Certain of these leases are subject to rental increases
based upon the appraised value of the Property at specified
dates or certain financial calculations based on the operations
of the respective Property. Any incremental changes in the
rental payments as a result of these adjustments are not
included in the table below because the amount of the change is
not

80



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 17  FUTURE MINIMUM LEASE
PAYMENTS  (continued)

determinable. Future minimum lease obligations
under these noncancelable leases as of December 31, 2003
were as follows:

|           |  |                      |           | 
|---------- |  | -------------------- | --------- | 
|Year       |  | Dollars in thousands |          
|           |  |                      |          
|2004       |  | $                    | 16,583    | 
|2005       |  |                      | 16,649    | 
|2006       |  |                      | 16,748    | 
|2007       |  |                      | 16,646    | 
|2008       |  |                      | 16,660    | 
|Thereafter |  |                      | 1,177,275 | 
|           |  |                      |          
|Total      |  | $                    | 1,260,561 | 
|           |  |                      |          

Rental expense from continuing operations for the
years ended December 31, 2003, 2002 and 2001 was
approximately $24.2 million, $24.2 million and
$19.7 million, respectively. These rental expense amounts
include ground rent and rent for our corporate offices.

NOTE 18  EXTRAORDINARY
ITEM

The $1.0 million extraordinary loss in 2001
related to costs on certain Office Properties located in
Seattle, Washington as a result of damage from an earthquake in
February 2001.

NOTE 19  EARNINGS PER
UNIT

The following table sets forth the computation of
basic and diluted earnings per unit:

|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |           |  |   |             |           | 
|------------ | ------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | - | ----------- | --------- |  | - | ----------- | --------- |  | - | ----------- | --------- | 
|             |                                                                                                                     |                                                                                                   
|             |                                                                                                                     | For the years ended December 31,                                                                   |  
|             |                                                                                                                     |                                                                                                    |  
|             |                                                                                                                     | 2003                                                                                               |   |             | 2002      |  |   | 2001        |          
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          
|             |                                                                                                                     |                                                                                                   
|             |                                                                                                                     | (Dollars in thousands, except per unit data)                                                       |  
|Numerator:   |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |           |  |   |            
|             | Income from continuing operations                                                                                   |                                                                                                    | $ | 623,276     |           |  | $ | 760,110     |           |  | $ | 640,827     |          
|             | Put option settlement                                                                                               |                                                                                                    |   |            |           |  |   |            |           |  |   | 2,655       |          
|             | Preferred distributions                                                                                             |                                                                                                    |   | (51,872     | )         |  |   | (62,573     | )         |  |   | (57,041     | )        
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          
|             | Income from continuing operations available to
    unitholders                                                      |                                                                                                    |   | 571,404     |           |  |   | 697,537     |           |  |   | 586,441     |          
|             | Discontinued operations (including net gain on
    sales of real estate of $61,953, $17,926 and $0, respectively)   |                                                                                                    |   | 105,938     |           |  |   | 99,310      |           |  |   | 55,746      |          
|             | Extraordinary item                                                                                                  |                                                                                                    |   |            |           |  |   |            |           |  |   | (1,000      | )        
|             | Cumulative effect of a change in accounting
    principle                                                           |                                                                                                    |   |            |           |  |   |            |           |  |   | (1,142      | )        
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          
|             | Numerator for basic and diluted earnings per
    unit  net income available to unitholders                         |                                                                                                    | $ | 677,342     |           |  | $ | 796,847     |           |  | $ | 640,045     |          
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          
|Denominator: |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |           |  |   |            
|             | Denominator for basic earnings per
    unit  weighted average Units outstanding                                    |                                                                                                    |   | 450,594,465 |           |  |   | 467,134,774 |           |  |   | 408,919,582 |          
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          
|             | Effect of dilutive potential units:                                                                                 |                                                                                                    |   |             |           |  |   |             |           |  |   |             |          
|             |                                                                                                                     | Units issuable upon exercise of Equity Office
    share options, put options and restricted shares |   |             | 1,966,888 |  |   |             | 2,003,946 |  |   |             | 3,067,315 | 
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          
|             | Denominator for diluted earnings per
    unit  weighted average Units outstanding and dilutive
    potential units |                                                                                                    |   | 452,561,353 |           |  |   | 469,138,720 |           |  |   | 411,986,897 |          
|             |                                                                                                                     |                                                                                                    |   |             |           |  |   |             |          

81



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 19  EARNINGS PER
UNIT  (continued)


|                                |                                                                |                                              |   |      |      |  |   |      |  |  |   |      | 
|------------------------------- | -------------------------------------------------------------- | -------------------------------------------- | - | ---- | ---- |  | - | ---- |  |  | - | ---- | 
|                                |                                                                |                                             
|                                |                                                                | For the years ended December 31,             |  
|                                |                                                                |                                              |  
|                                |                                                                | 2003                                         |   |      | 2002 |  |   | 2001 | 
|                                |                                                                |                                              |   |      |      |  |   |      | 
|                                |                                                                |                                             
|                                |                                                                | (Dollars in thousands, except per unit data) |  
|Earnings per unit  basic       |                                                                |                                              |   |      |      |  |   |      |  |  |   |     
|                                | Income from continuing operations available to
    unitholders |                                              | $ | 1.27 |      |  | $ | 1.49 |  |  | $ | 1.43 | 
|                                | Discontinued operations                                        |                                              |   | 0.24 |      |  |   | 0.21 |  |  |   | 0.14 | 
|                                |                                                                |                                              |   |      |      |  |   |      | 
|                                | Net income available to unitholders(a)                         |                                              | $ | 1.50 |      |  | $ | 1.71 |  |  | $ | 1.57 | 
|                                |                                                                |                                              |   |      |      |  |   |      | 
|Earnings per unit 
    diluted |                                                                |                                              |   |      |      |  |   |      |  |  |   |     
|                                | Income from continuing operations available to
    unitholders |                                              | $ | 1.26 |      |  | $ | 1.49 |  |  | $ | 1.42 | 
|                                | Discontinued operations                                        |                                              |   | 0.23 |      |  |   | 0.21 |  |  |   | 0.14 | 
|                                |                                                                |                                              |   |      |      |  |   |      | 
|                                | Net income available to unitholders(a)                         |                                              | $ | 1.50 |      |  | $ | 1.70 |  |  | $ | 1.55 | 
|                                |                                                                |                                              |   |      |      |  |   |      | 



---



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

The following securities were not included in the
diluted earnings per unit computation because they would have
had an antidilutive effect:

|                                        |       |                  |        |                                  |      |  |            |            |  |  |            |            |  |  |           |            | 
|--------------------------------------- | ----- | ---------------- | ------ | -------------------------------- | ---- |  | ---------- | ---------- |  |  | ---------- | ---------- |  |  | --------- | ---------- | 
|                                        |       |                  |        |                                 
|                                        |       |                  |        | For the years ended December 31, |     
|                                        |       | Weighted Average |        |                                  |      | 
|Antidilutive Securities                 |       | Exercise Price   |        |                                  | 2003 |  |            | 2002       |  |  | 2001       |           
|                                        |       |                  |        |                                  |      |  |            |            |  |  |            |           
|Share options                           |       | $                | 29.220 |                                  |      |  | 13,436,967 |            |  |  |           |            |  |  |          |           
|Share options                           |       | $                | 29.240 |                                  |      |  |           |            |  |  | 13,032,648 |            |  |  |          |           
|Share options                           |       | $                | 30.350 |                                  |      |  |           |            |  |  |           |            |  |  | 4,849,148 |           
|Series B Units                          |       | $                | 35.700 |                                  |      |  | 8,389,354  |            |  |  | 8,389,354  |            |  |  | 8,389,354 |           
|Warrants (expired on December 17, 2002) |       | $                | 39.375 |                                  |      |  |           |            |  |  | 4,808,219  |            |  |  | 5,000,000 |           
|                                        |       |                  |        |                                  |      |  |            |            |  |  |            |           
|                                        | Total |                  |        |                                  |      |  |            | 21,826,321 |  |  |            | 26,230,221 |  |  |           | 18,238,502 | 
|                                        |       |                  |        |                                  |      |  |            |            |  |  |            |           

For additional disclosures regarding employee
share options and restricted shares, see Note 2 
Summary of Significant Accounting Policies  Share
Based Employee Compensation Plans and Note 23 
Share-Based Employee Compensation Plans.

NOTE 20  SEGMENT
INFORMATION

As discussed in Note 1, our primary business
is the ownership and operation of Office Properties. We account
for each Office Property as an individual operating segment and
have aggregated the related operating accounts into a single
operating segment for financial reporting purposes due to the
fact that the individual operating segments have similar
economic characteristics. The net property operating income from
continuing operations generated at the Corporate and
Other segment consist primarily of the Industrial
Properties and stand-alone parking facilities that were sold in
2002 and 2001. The Other revenues generated at the
Corporate and Other segment consist primarily of fee
income from the management of office properties owned by third
parties, interest and dividend income from various investments
and realized gains on sale of certain marketable securities.

82



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 20  SEGMENT
INFORMATION  (continued)


|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |        |          |            |           |           |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------- | ---------- | --------- | --------- | -------- | -------- | ------------ | ------ | -------- | ---------- | --------- | --------- | ---------- | -
|                                                                                                                                                                            |                                                              |                                              
|                                                                                                                                                                            |                                                              | As of or for the year ended December 31, 2003 |           
|                                                                                                                                                                            |                                                              |                                               |           
|                                                                                                                                                                            |                                                              | Office                                        |            |           | Corporate |          |          |             
|                                                                                                                                                                            |                                                              | Properties                                    |            |           | and Other |          |          | Consolidated |       
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|                                                                                                                                                                            |                                                              |                                              
|                                                                                                                                                                            |                                                              | (Dollars in thousands)                        |           
|Property operating revenues(a)                                                                                                                                              |                                                              | $                                             | 3,131,792  |           |           | $        | 47,979   |              |        | $        | 3,179,771  |          
|Property operating expenses(b)                                                                                                                                              |                                                              |                                               | (1,116,062 | )         |           |          | (10,517  | )            |        |          | (1,126,579 | )        
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|                                                                                                                                                                            | Property net operating income from continuing
    operations |                                               |            | 2,015,730 |           |          |          | 37,462       |        |          |            | 2,053,192 |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Adjustments to arrive at net income:                                                                                                                                        |                                                              |                                               |            |           |           |          |          |              |        |          |            |          
|                                                                                                                                                                            | Other revenues                                               |                                               |            | 4,452     |           |          |          | 33,278       |        |          |            | 37,730    |          
|                                                                                                                                                                            | Interest expense(c)                                          |                                               |            | (176,804  | )         |          |          | (650,531     | )      |          |            | (827,335  | )        
|                                                                                                                                                                            | Depreciation and amortization                                |                                               |            | (691,412  | )         |          |          | (24,136      | )      |          |            | (715,548  | )        
|                                                                                                                                                                            | Ground rent                                                  |                                               |            | (20,287   | )         |          |          |             |        |          |            | (20,287   | )        
|                                                                                                                                                                            | General and administrative                                   |                                               |            | (4,395    | )         |          |          | (58,084      | )      |          |            | (62,479   | )        
|                                                                                                                                                                            | Impairment                                                   |                                               |            | (7,500    | )         |          |          |             |        |          |            | (7,500    | )        
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|                                                                                                                                                                            |                                                              |                                               | Total      |           |           | (895,946 | )        |              |        | (699,473 | )          |           |           | (1,595,419 | )
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and net gain on partial sales of real estate |                                                              |                                               | 1,119,784  |           |           |          | (662,011 | )            |        |          | 457,773    |          
|Income taxes                                                                                                                                                                |                                                              |                                               | (909       | )         |           |          | (4,464   | )            |        |          | (5,373     | )        
|Minority interests                                                                                                                                                          |                                                              |                                               | (8,080     | )         |           |          | (36      | )            |        |          | (8,116     | )        
|Income from investments in unconsolidated joint
    ventures                                                                                                                |                                                              |                                               | 76,292     |           |           |          | 3,590    |              |        |          | 79,882     |          
|Net gain on partial sales of real estate                                                                                                                                    |                                                              |                                               | 99,110     |           |           |          |         |              |        |          | 99,110     |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Income from continuing operations                                                                                                                                           |                                                              |                                               | 1,286,197  |           |           |          | (662,921 | )            |        |          | 623,276    |          
|Discontinued operations (including net gain on
    sales of real estate of $61,953)                                                                                         |                                                              |                                               | 102,420    |           |           |          | 3,518    |              |        |          | 105,938    |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Net income                                                                                                                                                                  |                                                              | $                                             | 1,388,617  |           |           | $        | (659,403 | )            |        | $        | 729,214    |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Property net operating income:                                                                                                                                              |                                                              |                                               |            |           |           |          |          |              |        |          |            |          
|                                                                                                                                                                            | Continuing operations                                        |                                               | $          | 2,015,730 |           |          | $        | 37,462       |        |          | $          | 2,053,192 |          
|                                                                                                                                                                            | Discontinued operations (see Note 6)                         |                                               |            | 58,302    |           |          |          | 299          |        |          |            | 58,601    |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|                                                                                                                                                                            |                                                              | Total property net operating income           |            | $         | 2,074,032 |          |          | $            | 37,761 |          |            | $         | 2,111,793 |           
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Property operating margin from continuing and
    discontinued operations(d)                                                                                                |                                                              |                                               |            |           |           |          |          |              |        |          | 64.7       | %        
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Property operating margin from continuing
    operations(d)                                                                                                                 |                                                              |                                               |            |           |           |          |          |              |        |          | 64.6       | %        
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Capital and tenant improvements                                                                                                                                             |                                                              | $                                             | 401,061    |           |           | $        | 34,247   |              |        | $        | 435,308    |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Investments in unconsolidated joint ventures                                                                                                                                |                                                              | $                                             | 1,128,175  |           |           | $        | (943     | )            |        | $        | 1,127,232  |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       
|Total Assets                                                                                                                                                                |                                                              | $                                             | 23,284,909 |           |           | $        | 904,101  |              |        | $        | 24,189,010 |          
|                                                                                                                                                                            |                                                              |                                               |            |           |           |          |          |              |       

83



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 20  SEGMENT
INFORMATION  (continued)


|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |          |   |            |           |            |  
|--------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | --------------------------------------------- | ---------- | --------- | --------- | - | -------- | ------------ | -------- | - | ---------- | --------- | ---------- | -
|                                                                                                                                  |                                      |                                              
|                                                                                                                                  |                                      | As of or for the year ended December 31, 2002 |           
|                                                                                                                                  |                                      |                                               |           
|                                                                                                                                  |                                      | Office                                        |            |           | Corporate |   |          |             
|                                                                                                                                  |                                      | Properties                                    |            |           | and Other |   |          | Consolidated |         
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|                                                                                                                                  |                                      |                                              
|                                                                                                                                  |                                      | (Dollars in thousands)                        |           
|Property operating revenues(a)                                                                                                    |                                      | $                                             | 3,290,424  |           |           | $ | 53,435   |              |          | $ | 3,343,859  |          
|Property operating expenses(b)                                                                                                    |                                      |                                               | (1,138,460 | )         |           |   | (10,235  | )            |          |   | (1,148,695 | )        
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Property net operating income from continuing
    operations                                                                      |                                      |                                               | 2,151,964  |           |           |   | 43,200   |              |          |   | 2,195,164  |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Adjustments to arrive at net income:                                                                                              |                                      |                                               |            |           |           |   |          |              |          |   |            |          
|                                                                                                                                  | Other revenues                       |                                               |            | 2,542     |           |   |          | 35,513       |          |   |            | 38,055    |           
|                                                                                                                                  | Interest expense(c)                  |                                               |            | (193,759  | )         |   |          | (620,886     | )        |   |            | (814,645  | )         
|                                                                                                                                  | Depreciation and amortization        |                                               |            | (643,194  | )         |   |          | (19,681      | )        |   |            | (662,875  | )         
|                                                                                                                                  | Ground rent                          |                                               |            | (20,325   | )         |   |          |             |          |   |            | (20,325   | )         
|                                                                                                                                  | General and administrative           |                                               |            |          |           |   |          | (65,790      | )        |   |            | (65,790   | )         
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|                                                                                                                                  |                                      | Total                                         |            |           | (854,736  | ) |          |              | (670,844 | ) |            |           | (1,525,580 | )
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Income before income taxes, allocation to
    minority interests and income from investments in unconsolidated
    joint ventures |                                      |                                               | 1,297,228  |           |           |   | (627,644 | )            |          |   | 669,584    |          
|Income taxes                                                                                                                      |                                      |                                               | (2,130     | )         |           |   | (6,996   | )            |          |   | (9,126     | )        
|Minority interests                                                                                                                |                                      |                                               | (7,120     | )         |           |   | (80      | )            |          |   | (7,200     | )        
|Income from investments in unconsolidated joint
    ventures                                                                      |                                      |                                               | 106,701    |           |           |   | 151      |              |          |   | 106,852    |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Income from continuing operations                                                                                                 |                                      |                                               | 1,394,679  |           |           |   | (634,569 | )            |          |   | 760,110    |          
|Discontinued operations (including net gain on
    sales of real estate of $17,926)                                               |                                      |                                               | 97,466     |           |           |   | 1,844    |              |          |   | 99,310     |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Net income                                                                                                                        |                                      | $                                             | 1,492,145  |           |           | $ | (632,725 | )            |          | $ | 859,420    |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Property net operating income:                                                                                                    |                                      |                                               |            |           |           |   |          |              |          |   |            |          
|                                                                                                                                  | Continuing operations                |                                               | $          | 2,151,964 |           |   | $        | 43,200       |          |   | $          | 2,195,164 |           
|                                                                                                                                  | Discontinued operations (see Note 6) |                                               |            | 108,757   |           |   |          | 1,402        |          |   |            | 110,159   |           
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|                                                                                                                                  |                                      | Total property net operating income           |            | $         | 2,260,721 |   |          | $            | 44,602   |   |            | $         | 2,305,323  |  
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Property operating margin from continuing and
    discontinued operations(d)                                                      |                                      |                                               |            |           |           |   |          |              |          |   | 65.7       | %        
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Property operating margin from continuing
    operations(d)                                                                       |                                      |                                               |            |           |           |   |          |              |          |   | 65.6       | %        
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Capital and tenant improvements                                                                                                   |                                      | $                                             | 321,803    |           |           | $ | 7,127    |              |          | $ | 328,930    |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Investments in unconsolidated joint ventures                                                                                      |                                      | $                                             | 1,077,273  |           |           | $ | 10,542   |              |          | $ | 1,087,815  |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         
|Total Assets                                                                                                                      |                                      | $                                             | 24,394,552 |           |           | $ | 852,231  |              |          | $ | 25,246,783 |          
|                                                                                                                                  |                                      |                                               |            |           |           |   |          |              |         

84



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 20  SEGMENT
INFORMATION  (continued)


|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |          |   |            |           |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------ | --------- | --------- | --------- | - | -------- | ------------ | -------- | - | ---------- | --------- | ---------- | -
|                                                                                                                                                                    |                                      |                                     
|                                                                                                                                                                    |                                      | For the year ended December 31, 2001 |          
|                                                                                                                                                                    |                                      |                                      |          
|                                                                                                                                                                    |                                      | Office                               |           |           | Corporate |   |          |             
|                                                                                                                                                                    |                                      | Properties                           |           |           | and Other |   |          | Consolidated |         
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|                                                                                                                                                                    |                                      |                                     
|                                                                                                                                                                    |                                      | (Dollars in thousands)               |          
|Property operating revenues(a)                                                                                                                                      |                                      | $                                    | 2,900,682 |           |           | $ | 50,379   |              |          | $ | 2,951,061  |          
|Property operating expenses(b)                                                                                                                                      |                                      |                                      | (999,040  | )         |           |   | (9,582   | )            |          |   | (1,008,622 | )        
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Property net operating income from continuing
    operations                                                                                                        |                                      |                                      | 1,901,642 |           |           |   | 40,797   |              |          |   | 1,942,439  |          
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Adjustments to arrive at net income:                                                                                                                                |                                      |                                      |           |           |           |   |          |              |          |   |            |          
|                                                                                                                                                                    | Other revenues                       |                                      |           | 3,496     |           |   |          | 51,604       |          |   |            | 55,100    |           
|                                                                                                                                                                    | Interest expense(c)                  |                                      |           | (208,398  | )         |   |          | (534,188     | )        |   |            | (742,586  | )         
|                                                                                                                                                                    | Depreciation and amortization        |                                      |           | (535,565  | )         |   |          | (17,763      | )        |   |            | (553,328  | )         
|                                                                                                                                                                    | Ground rent                          |                                      |           | (16,692   | )         |   |          |             |          |   |            | (16,692   | )         
|                                                                                                                                                                    | General and administrative           |                                      |           | (11       | )         |   |          | (42,310      | )        |   |            | (42,321   | )         
|                                                                                                                                                                    | Impairments                          |                                      |           |          |           |   |          | (135,220     | )        |   |            | (135,220  | )         
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|                                                                                                                                                                    |                                      | Total                                |           |           | (757,170  | ) |          |              | (677,877 | ) |            |           | (1,435,047 | )
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Income before income taxes, allocation to
    minority interests, income from investments in unconsolidated
    joint ventures and net gain on sales of real estate |                                      |                                      | 1,144,472 |           |           |   | (637,080 | )            |          |   | 507,392    |          
|Income taxes                                                                                                                                                        |                                      |                                      | (1,784    | )         |           |   | (6,961   | )            |          |   | (8,745     | )        
|Minority interests                                                                                                                                                  |                                      |                                      | (8,685    | )         |           |   |         |              |          |   | (8,685     | )        
|Income from investments in unconsolidated joint
    ventures                                                                                                        |                                      |                                      | 67,216    |           |           |   | 1,987    |              |          |   | 69,203     |          
|Net gain on sales of real estate                                                                                                                                    |                                      |                                      | 22,265    |           |           |   | 59,397   |              |          |   | 81,662     |          
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Income from continuing operations                                                                                                                                   |                                      |                                      | 1,223,484 |           |           |   | (582,657 | )            |          |   | 640,827    |          
|Discontinued operations                                                                                                                                             |                                      |                                      | 54,959    |           |           |   | 787      |              |          |   | 55,746     |          
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Income before extraordinary item and cumulative
    effect of change in accounting principle                                                                        |                                      |                                      | 1,278,443 |           |           |   | (581,870 | )            |          |   | 696,573    |          
|Extraordinary item                                                                                                                                                  |                                      |                                      | (1,000    | )         |           |   |         |              |          |   | (1,000     | )        
|Cumulative effect of change in accounting
    principle                                                                                                             |                                      |                                      | (1,142    | )         |           |   |         |              |          |   | (1,142     | )        
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Net income                                                                                                                                                          |                                      | $                                    | 1,276,301 |           |           | $ | (581,870 | )            |          | $ | 694,431    |          
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Property net operating income:                                                                                                                                      |                                      |                                      |           |           |           |   |          |              |          |   |            |          
|                                                                                                                                                                    | Continuing operations                |                                      | $         | 1,901,642 |           |   | $        | 40,797       |          |   | $          | 1,942,439 |           
|                                                                                                                                                                    | Discontinued operations (see Note 6) |                                      |           | 77,454    |           |   |          | 954          |          |   |            | 78,408    |           
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|                                                                                                                                                                    |                                      | Total property net operating income  |           | $         | 1,979,096 |   |          | $            | 41,751   |   |            | $         | 2,020,847  |  
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Property operating margin from continuing and
    discontinued operations(d)                                                                                        |                                      |                                      |           |           |           |   |          |              |          |   | 65.7       | %        
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Property operating margin from continuing
    operations(d)                                                                                                         |                                      |                                      |           |           |           |   |          |              |          |   | 65.8       | %        
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         
|Capital and tenant improvements                                                                                                                                     |                                      | $                                    | 325,215   |           |           | $ | 34,850   |              |          | $ | 360,065    |          
|                                                                                                                                                                    |                                      |                                      |           |           |           |   |          |              |         



---



|    |  |                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------
|(a) |  | Included in property operating revenues are
    rental revenues, tenant reimbursements, parking income and other
    income.

85



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 20  SEGMENT
INFORMATION  (continued)




|    |  |                                                                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Included in property operating expenses are real
    estate taxes, insurance, repairs and maintenance and property
    operating expenses.                                                              
|   
|(c) |  | Interest expense for the Office Properties
    represents interest expense on property secured mortgage debt
    and does not include interest expense on the unsecured notes or
    the line of credit.
|   
|(d) |  | Property operating margin is calculated by
    dividing property net operating income by property operating
    revenues.                                                                               

NOTE 21   QUARTERLY DATA
(UNAUDITED)

|                                     |                     |                                              |         |      |         |   |         |         |  |   |         |      |  |   |         |      | 
|------------------------------------ | ------------------- | -------------------------------------------- | ------- | ---- | ------- | - | ------- | ------- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                     |                     |                                             
|                                     |                     | For the three months ended                   |        
|                                     |                     |                                              |        
|                                     |                     | 12/31/03                                     |         |      | 9/30/03 |   |         | 6/30/03 |  |   | 3/31/03 |     
|                                     |                     |                                              |         |      |         |   |         |         |  |   |         |     
|                                     |                     |                                             
|                                     |                     | (Dollars in thousands, except per unit data) |        
|Total revenues(a)                    |                     | $                                            | 828,748 |      |         | $ | 789,870 |         |  | $ | 787,687 |      |  | $ | 789,327 |     
|Income from continuing operations(a) |                     | $                                            | 213,528 |      |         | $ | 129,457 |         |  | $ | 127,572 |      |  | $ | 152,717 |     
|Discontinued operations(a)           |                     | $                                            | 23,087  |      |         | $ | 4,866   |         |  | $ | 56,211  |      |  | $ | 21,775  |     
|Net income                           |                     | $                                            | 236,615 |      |         | $ | 134,323 |         |  | $ | 183,783 |      |  | $ | 174,492 |     
|Earnings per unit  basic:           |                     |                                              |         |      |         |   |         |         |  |   |         |      |  |   |         |     
|                                     | Net income per unit |                                              | $       | 0.53 |         |   | $       | 0.30    |  |   | $       | 0.41 |  |   | $       | 0.38 | 
|Earnings per unit  diluted:         |                     |                                              |         |      |         |   |         |         |  |   |         |      |  |   |         |     
|                                     | Net income per unit |                                              | $       | 0.53 |         |   | $       | 0.30    |  |   | $       | 0.41 |  |   | $       | 0.38 | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The amounts presented for the three months ended
    September 30, 2003, June 30, 2003, and March 31,
    2003 are not equal to the same amounts previously reported in
    the Form 10-Q filed with the SEC for each period as a
    result of discontinued operations consisting of properties sold
    in 2003. Total revenues presented for the three months ended
    June 30, 2003 and March 31, 2003 also differ from the
    same amounts previously reported in the Form 10-Q filed
    with the SEC for each period due to the reclassification of
    interest/dividend income and realized gain on sale of marketable
    securities previously reported as revenues to other income.
    Below is a reconciliation to the amounts previously reported in
    the Form 10-Q:

|                                                                                                                                |  |                                              |         |   |         |   |         |         |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ------- | - | ------- | ------- |  | - | ------- | -
|                                                                                                                                |  |                                             
|                                                                                                                                |  | For the three months ended                   |        
|                                                                                                                                |  |                                              |        
|                                                                                                                                |  | 9/30/03                                      |         |   | 6/30/03 |   |         | 3/31/03 | 
|                                                                                                                                |  |                                              |         |   |         |   |         |         | 
|                                                                                                                                |  |                                             
|                                                                                                                                |  | (Dollars in thousands, except per unit data) |        
|Total revenues previously reported in
    Form 10-Q                                                                             |  | $                                            | 806,162 |   |         | $ | 810,959 |         |  | $ | 829,255 |  
|Revenues previously reported in Form 10-Q
    subsequently reclassified to other income                                         |  |                                              |        |   |         |   | (3,695  | )       |  |   | (11,405 | )
|Revenues previously reported in Form 10-Q
    subsequently reclassified to discontinued operations                              |  |                                              | (16,292 | ) |         |   | (19,577 | )       |  |   | (28,523 | )
|                                                                                                                                |  |                                              |         |   |         |   |         |         | 
|Total revenues disclosed in Form 10-K                                                                                           |  | $                                            | 789,870 |   |         | $ | 787,687 |         |  | $ | 789,327 |  
|                                                                                                                                |  |                                              |         |   |         |   |         |         | 
|Income from continuing operations previously
    reported in Form 10-Q                                                          |  | $                                            | 138,075 |   |         | $ | 137,617 |         |  | $ | 166,845 |  
|Income from continuing operations previously
    reported in Form 10-Q subsequently reclassified to
    discontinued operations |  |                                              | (8,618  | ) |         |   | (10,045 | )       |  |   | (14,128 | )
|                                                                                                                                |  |                                              |         |   |         |   |         |         | 
|Income from continuing operations disclosed in
    Form 10-K                                                                    |  | $                                            | 129,457 |   |         | $ | 127,572 |         |  | $ | 152,717 |  
|                                                                                                                                |  |                                              |         |   |         |   |         |         | 

86



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 21   QUARTERLY DATA
(UNAUDITED)  (continued)


|                                                                                               |  |                                              |        |   |         |   |        |         |  |   |        | 
|---------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ------ | - | ------- | - | ------ | ------- |  | - | ------ | 
|                                                                                               |  |                                             
|                                                                                               |  | For the three months ended                   |       
|                                                                                               |  |                                              |       
|                                                                                               |  | 9/30/03                                      |        |   | 6/30/03 |   |        | 3/31/03 | 
|                                                                                               |  |                                              |        |   |         |   |        |         | 
|                                                                                               |  |                                             
|                                                                                               |  | (Dollars in thousands, except per unit data) |       
|Discontinued operations previously reported in
    Form 10-Q                                   |  | $                                            | (3,752 | ) |         | $ | 46,166 |         |  | $ | 7,647  | 
|Discontinued operations from properties sold
    subsequent to the respective reporting period |  |                                              | 8,618  |   |         |   | 10,045 |         |  |   | 14,128 | 
|                                                                                               |  |                                              |        |   |         |   |        |         | 
|Discontinued operations disclosed in
    Form 10-K                                             |  | $                                            | 4,866  |   |         | $ | 56,211 |         |  | $ | 21,775 | 
|                                                                                               |  |                                              |        |   |         |   |        |         | 

|                                     |                     |                                              |         |      |         |   |         |         |  |   |         |      |  |   |         |      | 
|------------------------------------ | ------------------- | -------------------------------------------- | ------- | ---- | ------- | - | ------- | ------- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                     |                     |                                             
|                                     |                     | For the three months ended                   |        
|                                     |                     |                                              |        
|                                     |                     | 12/31/02                                     |         |      | 9/30/02 |   |         | 6/30/02 |  |   | 3/31/02 |     
|                                     |                     |                                              |         |      |         |   |         |         |  |   |         |     
|                                     |                     |                                             
|                                     |                     | (Dollars in thousands, except per unit data) |        
|Total revenues(b)                    |                     | $                                            | 848,627 |      |         | $ | 841,593 |         |  | $ | 833,347 |      |  | $ | 836,199 |     
|Income from continuing operations(b) |                     | $                                            | 180,914 |      |         | $ | 178,800 |         |  | $ | 175,802 |      |  | $ | 224,596 |     
|Discontinued operations(b)           |                     | $                                            | 26,664  |      |         | $ | 25,095  |         |  | $ | 27,681  |      |  | $ | 19,868  |     
|Net income                           |                     | $                                            | 207,578 |      |         | $ | 203,895 |         |  | $ | 203,483 |      |  | $ | 244,464 |     
|Earnings per unit  basic:           |                     |                                              |         |      |         |   |         |         |  |   |         |      |  |   |         |     
|                                     | Net income per unit |                                              | $       | 0.45 |         |   | $       | 0.44    |  |   | $       | 0.43 |  |   | $       | 0.52 | 
|Earnings per unit  diluted:         |                     |                                              |         |      |         |   |         |         |  |   |         |      |  |   |         |     
|                                     | Net income per unit |                                              | $       | 0.45 |         |   | $       | 0.43    |  |   | $       | 0.43 |  |   | $       | 0.52 | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | The amounts presented for the three months ended
    December 31, 2002, September 30, 2002, June 30,
    2002, and March 31, 2002 are not equal to the same amounts
    previously reported in the Form 10-Q or Form 10-K
    filed with the SEC for each period as a result of discontinued
    operations consisting of properties sold in 2003. Total revenues
    presented for the three months ended December 31, 2002,
    June 30, 2002 and March 31, 2002 also differ from the
    same amounts previously reported in the Form 10-Q or
    Form 10-K filed with the SEC for each period due to the
    reclassification of interest/dividend income and realized gain
    on sale of marketable securities previously reported as revenues
    to other income. Below is a reconciliation to the amounts
    previously reported in the Form 10-Q or Form 10-K:

|                                                                                                                    |  |                                              |         |   |         |   |         |         |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ------- | - | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                    |  |                                             
|                                                                                                                    |  | For the three months ended                   |        
|                                                                                                                    |  |                                              |        
|                                                                                                                    |  | 12/31/02                                     |         |   | 9/30/02 |   |         | 6/30/02 |  |   | 3/31/02 |  
|                                                                                                                    |  |                                              |         |   |         |   |         |         |  |   |         |  
|                                                                                                                    |  |                                             
|                                                                                                                    |  | (Dollars in thousands, except per unit data) |        
|Total revenues previously reported in
    Form 10-Q or Form 10-K                                                    |  | $                                            | 884,511 |   |         | $ | 857,661 |         |  | $ | 861,889 |   |  | $ | 870,264 |  
|Revenues previously reported in Form 10-Q or
    Form 10-K subsequently reclassified to other income                |  |                                              | (5,223  | ) |         |   |        |         |  |   | (7,492  | ) |  |   | (6,841  | )
|Revenues previously reported in Form 10-Q or
    Form 10-K subsequently reclassified to discontinued
    operations |  |                                              | (30,661 | ) |         |   | (16,068 | )       |  |   | (21,050 | ) |  |   | (27,224 | )
|                                                                                                                    |  |                                              |         |   |         |   |         |         |  |   |         |  
|Total revenues disclosed in Form 10-K                                                                               |  | $                                            | 848,627 |   |         | $ | 841,593 |         |  | $ | 833,347 |   |  | $ | 836,199 |  
|                                                                                                                    |  |                                              |         |   |         |   |         |         |  |   |         |  

87



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 21   QUARTERLY DATA
(UNAUDITED)  (continued)


|                                                                                                                                             |  |                                              |         |   |         |   |         |         |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ------- | - | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                                             |  |                                             
|                                                                                                                                             |  | For the three months ended                   |        
|                                                                                                                                             |  |                                              |        
|                                                                                                                                             |  | 12/31/02                                     |         |   | 9/30/02 |   |         | 6/30/02 |  |   | 3/31/02 |  
|                                                                                                                                             |  |                                              |         |   |         |   |         |         |  |   |         |  
|                                                                                                                                             |  |                                             
|                                                                                                                                             |  | (Dollars in thousands, except per unit data) |        
|Income from continuing operations previously
    reported in Form 10-Q or Form 10-K                                                          |  | $                                            | 195,921 |   |         | $ | 186,638 |         |  | $ | 186,886 |   |  | $ | 239,209 |  
|Income from continuing operations previously
    reported in Form 10-Q or Form 10-K subsequently
    reclassified to discontinued operations |  |                                              | (15,007 | ) |         |   | (7,838  | )       |  |   | (11,084 | ) |  |   | (14,613 | )
|                                                                                                                                             |  |                                              |         |   |         |   |         |         |  |   |         |  
|Income from continuing operations disclosed in
    Form 10-K                                                                                 |  | $                                            | 180,914 |   |         | $ | 178,800 |         |  | $ | 175,802 |   |  | $ | 224,596 |  
|                                                                                                                                             |  |                                              |         |   |         |   |         |         |  |   |         |  
|Discontinued operations previously reported in
    Form 10-Q or Form 10-K                                                                    |  | $                                            | 11,657  |   |         | $ | 17,257  |         |  | $ | 16,597  |   |  | $ | 5,255   |  
|Discontinued operations from properties sold
    subsequent to the respective reporting period                                               |  |                                              | 15,007  |   |         |   | 7,838   |         |  |   | 11,084  |   |  |   | 14,613  |  
|                                                                                                                                             |  |                                              |         |   |         |   |         |         |  |   |         |  
|Discontinued operations disclosed in
    Form 10-K                                                                                           |  | $                                            | 26,664  |   |         | $ | 25,095  |         |  | $ | 27,681  |   |  | $ | 19,868  |  
|                                                                                                                                             |  |                                              |         |   |         |   |         |         |  |   |         |  

NOTE 22  RELATED PARTY
TRANSACTIONS

Fees and reimbursements paid to related parties
for the years ended December 31, 2003, 2002 and 2001 were
as follows:

|                                                                 |       |                                  |       |       |      |   |       |       |  |   |        |        | 
|---------------------------------------------------------------- | ----- | -------------------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | ------ | ------ | 
|                                                                 |       |                                 
|                                                                 |       | Paid in years ended December 31, |      
|                                                                 |       |                                  |      
|                                                                 |       | 2003                             |       |       | 2002 |   |       | 2001  | 
|                                                                 |       |                                  |       |       |      |   |       |       | 
|                                                                 |       |                                 
|                                                                 |       | (Dollars in thousands)           |      
|Development fees, leasing commissions and
    management fees(a) |       | $                                | 3,569 |       |      | $ | 4,727 |       |  | $ | 8,147  |       
|Interest and prepayment penalty on mortgage
    notes(b)         |       |                                  |      |       |      |   |      |       |  |   | 22,256 |       
|Office rent(c)                                                   |       |                                  | 3,959 |       |      |   | 3,904 |       |  |   | 2,964  |       
|                                                                 |       |                                  |       |       |      |   |       |       | 
|                                                                 | Total |                                  | $     | 7,528 |      |   | $     | 8,631 |  |   | $      | 33,367 | 
|                                                                 |       |                                  |       |       |      |   |       |       | 
|Payable to related parties at year end                           |       | $                                | 273   |       |      | $ | 1,748 |       |  | $ | 339    |       
|                                                                 |       |                                  |       |       |      |   |       |       | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Amounts paid in 2003 were paid to an affiliate of
    William Wilson III, one of Equity Offices trustees.
    Amounts paid in 2002 and 2001 were paid to W/EO. In 2000, we
    entered into a joint venture agreement with Wilson
    Investors  California, LLC (WIC) to form
    W/ EO for the purpose of developing, constructing, leasing and
    managing developments in northern California. We own 49.9% of W/
    EO and WIC owns 50.1% of W/ EO. William Wilson III, through
    his ownership of WIC, indirectly owns approximately 22% of W/EO
    and approximately 30% of any promote to which WIC is entitled
    under the joint venture agreement. We agreed to loan up to
    $25 million to WIC for its required contribution to W/ EO
    at a 15% interest rate per annum. In 2002, WIC repaid the
    outstanding loan balance of approximately $12.0 million of
    principal and $2.0 million of accrued interest. Upon this
    repayment and as a result of certain transactions with WIC the
    loan commitment has been terminated. Our investment in W/ EO as
    of December 31, 2003 and 2002 was approximately
    $1.3 million and $3.6 million, respectively, which
    represents our indirect interest in Concar at December 31,
    2003 and Concar and Foundry IV (which was sold in 2003) at
    December 31, 2002.
|   
|    |  | We created joint ventures with W/ EO and, in
    certain cases, unaffiliated parties for the development of
    various office properties. We agreed to provide first mortgage
    financing to the ownership entities of each of these
    developments at the greater of 6.5% or LIBOR plus 3.25%,
    generally maturing 36 months after initial funding or
    earlier at our option, in the event alternative financing
    sources are available on terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

88



---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




| |  |                                                       
| |  | ------------------------------------------------------
| |  | NOTE 22  RELATED PARTY
    TRANSACTIONS  (continued)

reasonably acceptable to WIC and any unaffiliated
party. The aggregate amount of any such financing would
generally be capped at 70% of budgeted construction costs (76%
in the case of Concar which, at December 31, 2002 had been
completed and leased and as such is now reflected as investment
in real estate). At December 31, 2002, we had committed to
make mortgage loans for Foundry Square IV and Concar totaling
approximately $96 million, of which approximately
$74 million in principal and approximately
$0.4 million in accrued interest was outstanding. The total
principal and interest outstanding on these mortgage loans at
December 31, 2003 was approximately $40 million. The
mortgage loan for Foundry Square IV was repaid in 2003.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | In December 2002, we completed a transaction with
    W/ EO and WIC pursuant to which we acquired W/ EOs
    interests in various projects known as Foundry Square II,
    Foundry Square III (a land parcel that was under option),
    the Ferry Building, San Rafael Corporate Center I and
    San Rafael Corporate Center II (a land parcel). WIC
    acquired W/ EOs interest in a project known as Larkspur (a
    land parcel under option) and WIC acquired the operating
    business and all assets of W/ EO other than its ownership
    interests in the development projects known as Foundry Square IV
    and Concar. W/ EOs and our interests in Foundry Square IV
    and Concar remained unchanged as a result of this transaction.
    Joint ventures with other unaffiliated parties on the projects
    in which we acquired W/ EOs interest also remain unchanged
    as a result of this transaction. This transaction was accounted
    for as a nonmonetary exchange because the assets included in the
    exchange were similar and because the cash consideration
    exchanged was minimal. No gain or loss was recognized in
    connection with the transaction. A WIC subsidiary will continue
    providing the development management services to Foundry
    Square II, the Ferry Building and Concar until the earlier
    of project stabilization or June 2004. We also engaged a
    subsidiary of WIC to provide leasing brokerage services for
    Foundry Square II and the Ferry Building. These services
    for Foundry Square II were terminated by us and these
    services for the Ferry Building were terminated in part by us in
    January 2004. In July, 2003, Foundry Square IV was sold.
    Following this sale, W/ EOs sole asset is its ownership
    interest in Concar. In accordance with the W/ EO operating
    agreement, we may, but are not required to, purchase the W/ EO
    interest in Concar subsequent to project stabilization.
|   
|(b) |  | In connection with the Cornerstone Merger,
    $250 million of mortgage debt was assumed on certain
    properties payable to Stichting Pensioenfonds Voor de
    Gezondheid, Geestelijke en Maatschappelijke Belangen
    (PGGM), of which Jan H.W.R. van der Vlist, one of
    Equity Offices trustees, is a director of real estate. In
    October 2000, we repaid $65 million of mortgage debt
    encumbering TransPotomac Plaza 5 upon its maturity. In December
    2001, the remaining $185 million of mortgage debt
    encumbering several properties was prepaid. As a result of the
    prepayment, we paid a $5.0 million prepayment penalty to
    PGGM.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(c) |  | We lease office space from Two North Riverside
    Plaza Joint Venture, a partnership composed of trusts
    established for the benefit of the families of Samuel Zell and
    Robert Lurie, a deceased former business partner of
    Mr. Zell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Amounts Received from Related
Parties

As described in Note 7, we own, and receive
distributions from, preferred shares of CT Convertible
Trust I, of which Mr. Zell is Chairman of the Board.

We have entered into third-party management
contracts and a licensing agreement to manage and lease space at
certain Properties owned or controlled by affiliates of
Mr. Zell. Income recognized by us for providing these
management services during 2003, 2002, and 2001 was
approximately $.8 million, $1.0 million, and
$1.5 million, respectively.

In addition, we provided real estate tax
consulting and risk management services to related parties for
which we received approximately $.3 million,
$1.6 million, and $1.7 million during 2003, 2002 and
2001, respectively.

89



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 22  RELATED PARTY
TRANSACTIONS  (continued)

We received approximately $0.8 million from
W/ EO during 2003 for lease commissions.

NOTE 23  SHARE-BASED EMPLOYEE
COMPENSATION PLANS

Equity Office has three share-based employee
compensation plans: the 1997 Share Option and Share Award Plan,
as amended (the 1997 Plan), the 2003 Share Option
and Share Incentive Plan, as amended (the 2003 Plan)
and the 1997 Non-Qualified Share Purchase Plan, as amended (the
Non-Qualified Share Purchase Plan). We also have
assumed individual options in connection with prior merger
transactions.

The following is a description of the
1997 Plan, as amended, which is included in the financial
statements because any Common Shares issued pursuant to the 1997
Plan will result in us issuing Units to Equity Office, on a
one-for-one basis. The purpose of the 1997 Plan is to attract
and retain highly qualified executive officers, trustees and
employees. Through the 1997 Plan, eligible officers, trustees,
employees and consultants are offered the opportunity to acquire
Common Shares pursuant to grants of (a) options to purchase
Common Shares (Options) and (b) Share Awards
(defined below). The 1997 Plan is administered by the
Compensation and Option Committee (the Compensation
Committee), which is appointed by the Board of Trustees.
The Compensation Committee determines those officers, trustees,
key employees and consultants to whom, and the time or times at
which, grants of Options and Share Awards will be made. The
Compensation Committee interprets the 1997 Plan, adopts rules
relating thereto and determines the terms and provisions of
Options and Share Awards. In 2003, 2002, and 2001 the Common
Shares subject to Options and Share Awards under the 1997 Plan
were limited to 31,375,726, 32,030,650, and 23,733,869,
respectively. The maximum aggregate number of Options and Share
Awards that may be granted under the 1997 Plan may not exceed
6.8% of the outstanding Common Shares calculated on a fully
diluted basis and determined annually on the first day of each
calendar year. The issuance of awards or shares under the
2003 Plan does not increase the number of shares that may
be issued under the 1997 Plan. No more than one-half of the
maximum aggregate number of Options and Share Awards may be
granted as Share Awards. To the extent that Options expire
unexercised or are terminated, surrendered or canceled, the
Options and Share Awards become available for future grants
under the 1997 Plan, unless the 1997 Plan has terminated.
The 1997 Plan has a 10-year term. The Board of Trustees may at
any time prior thereto amend or terminate the 1997 Plan, but
termination will not affect Options and Share Awards previously
granted. Any Options or Share Awards which vest prior to any
such termination will continue to be exercisable by the holder
thereof.

The Compensation Committee determines the vesting
schedule of each Option and the term, which shall not exceed
10 years from the grant date. As to the Options that have
been granted, each vests evenly over a three year period,
one-third per year on each of the first three anniversaries of
the grant date. The exercise price for Options is equivalent to
the fair market value of the underlying Common Shares at the
grant date.

The 1997 Plan permits the issuance of Share
Awards to executive officers, trustees and key employees upon
such terms and conditions as are determined by the Compensation
Committee in its sole discretion. A Share Award is an award of a
Common Share which (a) may be fully vested upon issuance
(Share Award) or (b) may vest over time
(Restricted Share Award). Generally, members of the
Board of Trustees have been granted Share Awards pursuant to the
1997 Plan as payment of their board fees. In each case, the
number of Share Awards granted to trustees was equal to the
dollar value of the fee divided by the fair market value of a
Common Share on the date the fee would have been paid.
Restricted Share Awards granted in 2003 and 2002 vest evenly
over a five-year period, 20% per year on each of the first
five anniversaries of the grant date. The Restricted Share
Awards granted before 2002 vest over a five-year period as
follows: 50% on the third anniversary of the grant date, 25% on
the fourth anniversary of the grant date and the remaining 25%
on the fifth anniversary of the grant date.

90



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 23  SHARE-BASED EMPLOYEE
COMPENSATION PLANS  (continued)


The fair value for Options granted in 2003, 2002,
and 2001 was estimated at the time the Options were granted
using the Black-Scholes option-pricing model with the following
weighted average assumptions:

|                                               |  |      |         |  |      |  |         |      |  |  |         | 
|---------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|Assumptions:                                   |  | 2003 |         |  | 2002 |  |         | 2001 | 
|                                               |  |      |         |  |      |  |         |      | 
|Risk-free interest rate                        |  |      | 3.2%    |  |      |  | 4.2%    |      |  |  | 4.2%    | 
|Expected dividend yield                        |  |      | 6.6%    |  |      |  | 7.0%    |      |  |  | 6.7%    | 
|Volatility                                     |  |      | 0.22    |  |      |  | 0.19    |      |  |  | 0.21    | 
|Weighted average expected life of the Options  |  |      | 7 years |  |      |  | 5 years |      |  |  | 5 years | 
|Weighted average fair value of Options granted |  |      | $2.36   |  |      |  | $2.29   |      |  |  | $2.76   | 

The Black-Scholes option-pricing model was
developed for use in estimating the fair value of traded
options, which have no vesting restrictions and are fully
transferable. In addition, option-pricing models require the
input of highly subjective assumptions, including the expected
stock price volatility.

In 2003, 2002, and 2001, we recognized
compensation expense related to Restricted Shares and Options
issued to employees of $17.1 million, $15.0 million,
and $9.2 million, respectively.

The table below summarizes the Option activity of
the 1997 Plan for the last three years:

|                             |                    |                    |            |                  |                |   |       |       | 
|---------------------------- | ------------------ | ------------------ | ---------- | ---------------- | -------------- | - | ----- | ----- | 
|                             |                    |                    |            | Weighted Average |               
|                             |                    | Common Shares      |            |                  | Exercise Price |  
|                             |                    | Subject to Options |            |                  | Per Option     |  
|                             |                    |                    |            |                  |                |  
|Balance at December 31, 2000 |                    |                    | 13,221,371 |                  |                | $ | 24.82 |      
|                             | Options granted(1) |                    |            | 6,785,666        |                |   |       | 27.26 | 
|                             | Options canceled   |                    |            | (438,681         | )              |   |       | 27.53 | 
|                             | Options exercised  |                    |            | (3,282,003       | )              |   |       | 21.89 | 
|                             |                    |                    |            |                  |                |  
|Balance at December 31, 2001 |                    |                    | 16,286,353 |                  |                |   | 26.41 |      
|                             | Options granted    |                    |            | 6,540,705        |                |   |       | 28.36 | 
|                             | Options canceled   |                    |            | (592,102         | )              |   |       | 28.98 | 
|                             | Options exercised  |                    |            | (1,739,863       | )              |   |       | 23.00 | 
|                             |                    |                    |            |                  |                |  
|Balance at December 31, 2002 |                    |                    | 20,495,093 |                  |                |   | 27.18 |      
|                             | Options granted    |                    |            | 3,550,017        |                |   |       | 24.70 | 
|                             | Options canceled   |                    |            | (1,358,070       | )              |   |       | 27.78 | 
|                             | Options exercised  |                    |            | (1,661,333       | )              |   |       | 22.72 | 
|                             |                    |                    |            |                  |                |  
|Balance at December 31, 2003 |                    |                    | 21,025,707 |                  |                |   | 27.10 |      
|                             |                    |                    |            |                  |                |  

The following table summarizes information
regarding Options outstanding at December 31, 2003:

|                  |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       |  |  |           |  |  |   |       | 
|----------------- |  | ------------------- | ---------- | ---------------- | ------------------- |  | --------- | ----------------------- |  | - | ------- | --------- |  | ----- | ---------- |  | --------- | - | ----- | ----- |  |  | --------- |  |  | - | ----- | 
|                  |  |                     |            |                  |                     |  |           |                         |  |  
|                  |  | Options Outstanding |            |                  |                     |  |          
|                  |  |                     |            |                  | Options Exercisable |  |           | Options Not Exercisable | 
|                  |  |                     |            | Weighted-        |                     |  |           |                         |  |   |         |           | 
|                  |  |                     |            | average          |                     |  | Weighted- |                         |  |   |         | Weighted- |  |       |            |  | Weighted- |  
|                  |  |                     |            | remaining        |                     |  | average   |                         |  |   |         | average   |  |       |            |  | average   |  
|Range of Exercise |  |                     |            | contractual life |                     |  | exercise  |                         |  |   |         | exercise  |  |       |            |  | exercise  |  
|Prices            |  | Options             |            |                  | in years(2)         |  |           | price                   |  |   | Options |           |  | price |            |  | Options   |   |       | price | 
|                  |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       | 
|$12.09 to $21.00  |  |                     | 1,253,104  |                  |                     |  | 3.6       |                         |  | $ | 20.74   |           |  |       | 1,253,104  |  |           | $ | 20.74 |       |  |  |          |  |  |   |      | 
|$21.07 to $23.40  |  |                     | 1,155,499  |                  |                     |  | 4.9       |                         |  |   | 23.25   |           |  |       | 1,155,499  |  |           |   | 23.25 |       |  |  |          |  |  |   |      | 
|$24.23 to $24.62  |  |                     | 5,472,977  |                  |                     |  | 7.6       |                         |  |   | 24.39   |           |  |       | 2,546,312  |  |           |   | 24.24 |       |  |  | 2,926,665 |  |  |   | 24.53 | 
|$24.88 to $28.36  |  |                     | 6,367,408  |                  |                     |  | 7.9       |                         |  |   | 28.20   |           |  |       | 2,798,154  |  |           |   | 28.20 |       |  |  | 3,569,254 |  |  |   | 28.19 | 
|$28.38 to $29.50  |  |                     | 2,131,864  |                  |                     |  | 4.6       |                         |  |   | 29.48   |           |  |       | 2,098,524  |  |           |   | 29.49 |       |  |  | 33,340    |  |  |   | 29.19 | 
|$29.76 to $33.00  |  |                     | 4,644,855  |                  |                     |  | 6.6       |                         |  |   | 30.35   |           |  |       | 3,491,425  |  |           |   | 30.47 |       |  |  | 1,153,430 |  |  |   | 29.99 | 
|                  |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       | 
|$12.09 to $33.00  |  |                     | 21,025,707 |                  |                     |  | 6.8       |                         |  | $ | 27.10   |           |  |       | 13,343,018 |  |           | $ | 27.11 |       |  |  | 7,682,689 |  |  | $ | 27.07 | 
|                  |  |                     |            |                  |                     |  |           |                         |  |   |         |           |  |       |            |  |           |   |       |       | 

91



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 23  SHARE-BASED EMPLOYEE
COMPENSATION PLANS  (continued)




---



|    |                                                                                                   
|--- | --------------------------------------------------------------------------------------------------
|(1) | Includes 1,890,648 non-plan options assumed in
    connection with the Spieker Partnership merger.
|   
|(2) | Expiration dates ranged from January 2004 to
    December 2013.                                   

During 2003, 2002 and 2001, there were 926,511,
541,055 and 602,666 Restricted Share Awards granted,
respectively. The Restricted Shares Awards issued in 2003, 2002
and 2001 were, on average, valued at an average of $24.56,
$28.01 and $20.61 each, respectively. The value of the
Restricted Share Awards is recognized as compensation expense
evenly over the vesting period.

Equity Offices shareholders approved the
2003 Plan at the 2003 annual meeting of shareholders. A total of
20,000,000 Common Shares are reserved for issuance under the
2003 Plan to trustees, officers, employees and consultants of
Equity Office and its subsidiaries. The 2003 Plan provides for
awards of share options, restricted shares, unrestricted shares,
share units, dividend equivalent rights, share appreciation
rights and performance awards. No more than 10,000,000 of the
Common Shares reserved under the 2003 Plan may be issued in
connection with awards other than options. The maximum number of
shares subject to options and share appreciation rights that can
be awarded to any person is 750,000 per year, and the maximum
number of shares that can be awarded to any person, other than
pursuant to an option or share appreciation right, is 300,000
per year. The 2003 Plan is administered by the Compensation
Committee. Subject to the terms of the 2003 Plan, the
Compensation Committee may select participants to receive
awards, determine the types of awards and the terms and
conditions of awards, and interpret the provisions of the 2003
Plan. The exercise price of each share option awarded under the
2003 Plan may not be less than 100% of the fair market value of
a Common Share on the date of grant. The term of the 2003 Plan
is 10 years. Prior thereto, the Compensation Committee may
terminate or amend the 2003 Plan at any time and for any reason,
but termination will not affect awards previously made. There
were no awards made under the 2003 Plan during 2003.

The Non-Qualified Purchase Plan was adopted to
encourage eligible employees and trustees to purchase Common
Shares. Under the Non-Qualified Purchase Plan, a total of
2,000,000 Common Shares are reserved for issuance. The minimum
amount an eligible employee can contribute is $10 per pay
period. The maximum amount an eligible employee can contribute
is 20% of gross pay per pay period, up to $100,000 per calendar
year. Trustees may contribute up to $100,000 per year.
Contributions are held as part of the general assets of Equity
Office. All contributions are fully vested. At the end of each
purchase period, participant contributions are used to purchase
Common Shares. The price for the Common Shares is 85% of the
lesser of: (a) the closing price of the Common Shares on
the last business day of the applicable purchase period and
(b) the average closing price of the Common Shares for the
purchase period. The number of Common Shares purchased is
calculated on a per participant basis by dividing the
contributions made by each participant during the Purchase
Period by the purchase price. Only whole Common Shares are
purchased, with any partial share of remaining cash being rolled
over to the next purchase period. Shares purchased under the
Non-Qualified Purchase Plan generally may not be sold,
transferred or disposed of until the first anniversary of the
purchase. If a participant violates this restriction, he or she
is required to pay Equity Office an amount equal to the discount
on the shares when purchased less, the excess, if any, of the
amount the participant paid for the shares over the then current
market price of the shares. At December 31, 2003, a total
of 1,509,443 Common Shares remained available for issuance under
the Non-Qualified Purchase Plan. Common Share purchases under
this plan totaled 93,815, 90,484 and 76,645 in 2003, 2002 and
2001, respectively.

NOTE 24  401(K) PLAN

Our 401(k) Plan was established to cover eligible
employees and employees of any designated affiliate. The 401(k)
Plan permits eligible persons to defer up to 16% of their annual
compensation into the 401(k) Plan, subject to certain
limitations imposed by the Internal Revenue Code.
Employees elective deferrals are immediately vested upon
contribution to the 401(k) Plan. We match employee contributions
to the 401(k) Plan dollar for dollar up to 4% of the
employees annual salary. In addition, we may elect to make
an annual

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 24  401(K)
PLAN  (continued)

discretionary profit-sharing contribution.
Approximately $6.7 million, $4.2 million and
$3.8 million was recognized as expense in each of the years
ended December 31, 2003, 2002 and 2001, respectively.

NOTE 25  COMMITMENTS AND
CONTINGENCIES

Concentration of Credit Risk

We maintain cash and cash equivalents at
financial institutions. The combined account balances at each
institution typically exceed FDIC insurance coverage and, as a
result, there is a concentration of credit risk related to
amounts on deposit in excess of FDIC insurance coverage. We
believe the risk is not significant.

Environmental

As an owner of real estate, we are subject to
various environmental laws of federal and local governments. Our
compliance with existing laws has not had a material adverse
effect on our financial condition and results of operations, and
we do not believe it will have a material adverse effect in the
future. However, we cannot predict the impact of unforeseen
environmental contingencies or new or changed laws or
regulations on our current Properties or on properties that we
may acquire.

Litigation

Except as described below, we are not presently
subject to material litigation nor, to our knowledge, is any
material litigation threatened against us, other than routine
actions for negligence and other claims and administrative
proceedings arising in the ordinary course of business, some of
which are expected to be covered by liability insurance and all
of which collectively are not expected to have a material
adverse effect on our financial condition, results of
operations, or liquidity.

On May 8, 2003, Broadband Office, Inc. and
the official committee of unsecured creditors of Broadband
Office Inc. (collectively, the Plaintiffs), filed a
complaint (the Complaint) in the United States
Bankruptcy Court for the District of Delaware against one
private and seven public real estate companies, various
affiliated entities (collectively the Corporate
Defendants) and certain individuals, including Equity
Office, EOP Partnership, David Helfand (a former executive vice
president of Equity Office), Spieker Properties, Inc. and
Spieker Properties, L.P. (which we acquired in 2001) and Craig
Vought (formerly co-chief executive officer of Spieker
Properties, Inc. and a former Equity Office trustee). Under the
terms of our indemnification agreements with
Messrs. Helfand and Vought, we may be responsible to
reimburse them for the effect of any judgment rendered against
them personally as well as the costs of their defense. We were
an equity investor in, landlord to and customer of Broadband
Office, and Messrs. Helfand and Vought were members of the
board of directors of Broadband Office until their resignations
on May 1, 2001 and May 2, 2001, respectively.
Mr. Vought also served as a member of Broadband
Offices executive committee. Broadband Office filed for
bankruptcy protection on May 9, 2001. The First Amended
Complaint alleges, among other things, breaches of fiduciary
duty and seeks recovery of what it characterizes as preferential
payments and fraudulent transfers. It further seeks to hold us
liable for the outstanding debts of the corporation, jointly and
severally with all of the Corporate Defendants, as an alleged
general partner of Broadband Office. The Plaintiffs
allege that the amount of these claims exceeds $300 million
in the aggregate. Due to the inherent uncertainties of the
judicial process and the early stage of this action, we are
unable to predict the outcome of this matter with certainty. We
intend to vigorously defend this matter and believe we have
meritorious defenses. As a result, we have not accrued for any
potential liability in connection with this litigation. As in
any litigation, there can be no assurance that we will prevail.
Should the court not resolve this matter in our favor it could
have a material adverse effect on our financial condition,
results of operations and liquidity.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 25  COMMITMENTS AND
CONTINGENCIES  (continued)


Forward-Starting Interest Rate Swaps

See Note 13  Derivative Financial
Instruments for information on our forward-starting interest
rate swaps.

Contingencies

Certain joint venture agreements contain buy/
sell options in which each party has the option to acquire the
interest of the other party. Except for certain agreements in
which our partners in three of our Office Properties can require
us to buy their interests, such agreements do not generally
require that we buy our partners interest. The exceptions
allow our unaffiliated partners, at their election, to require
that we buy their interests during specified future time
periods, commencing in 2004 and at amounts that represent the
fair market value of their interest at that time or at amounts
based on formulas contained in the respective agreements. In
addition, we have granted options to each of two tenants to
purchase the Office Property it occupies.

In accordance with Statement of Accounting
Standards No. 5 Accounting for Contingencies, we
have not recorded a liability or the related asset that would
result from the acquisition in connection with the above
potential obligations because the probability of our
unaffiliated partners requiring us to buy their interest is not
currently determinable and we are unable to estimate the amount
of the payment required for that purpose.

Approximately 260 of our properties, consisting
of 33.1 million square feet, are subject to restrictions on
taxable dispositions under tax protection agreements entered
into with some of the contributors of the properties. The
carrying value of these properties was approximately
$6.7 billion at December 31, 2003. The restrictions on
taxable dispositions are effective for periods expiring at
different times through 2021. The terms of these tax protection
agreements generally prevent us from selling specific properties
in taxable transactions unless we indemnify the contributing
partners for their income tax liability on the portion of the
gain on sale allocated to them as a result of the
propertys value at the time of its contribution to us or,
in some cases, to our predecessor. We do not believe that the
tax protection agreements materially affect the conduct of our
business or our decisions whether to dispose of restricted
properties during the restriction period because we generally
hold these and our other properties for investment purposes,
rather than for sale. Historically, however, where we have
deemed it to be in our shareholders best interests to
dispose of restricted properties, we have done so through
transactions structured as tax-deferred transactions under
section 1031 of the Internal Revenue Code. We anticipate
structuring any future dispositions of restricted properties as
transactions intended to qualify for tax-deferred treatment. We
therefore view the likelihood of incurring any such material
indemnification obligations to be remote. Were we to dispose of
a restricted property in a taxable transaction, we generally
would be required to pay to a partner that is a beneficiary of
one of the tax protection agreements an amount based on the
amount of income tax the partner would be required to pay on the
incremental gain allocated to such partner as a result of the
built-in gain that existed with respect to such property at the
time of its contribution to us, or in some cases, to our
predecessor. In some cases there is a further requirement to
reimburse any additional tax liability arising from the
indemnification payment itself. The exact amount that would be
payable with respect to any particular taxable sale of a
restricted property would depend on a number of factors, many of
which can only be calculated at the time of any future sale,
including the sale price of the property at the time of the
sale, the partnerships basis in the property at the time
of the sale, the partners basis in the assets at the time
of the contribution, the partners applicable rate of
federal, state and local taxation at the time of the sale, and
the timing of the sale itself.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)




NOTE 25  COMMITMENTS AND
CONTINGENCIES  (continued)


Insurance

Property Damage, Business Interruption,
Earthquake and Terrorism:The
insurance coverage provided through third-party insurance
carriers is subject to coverage limitations. For each type of
insurance coverage described below, should an uninsured or
underinsured loss occur, we could lose all or a portion of our
investment in, and anticipated cash flows from, one or more of
the Properties. In addition, there can be no assurance that
third-party insurance carriers will be able to maintain
reinsurance sufficient to cover any losses that may be incurred.

|                                             |  |                                                                                                                                                                                         |  |                                          
|-------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Type of Insurance                            |  | Equity Office                                                                                                                                                                           |  | Third-Party                              
|Coverage                                     |  | Loss Exposure/Deductible                                                                                                                                                                |  | Coverage Limitation                      
|                                             |  |                                                                                                                                                                                         |  |                                          
|Property damage and business interruption(a) |  | $75 million annual aggregate exposure (which
    includes amounts paid for earthquake loss), plus $1 million
    per occurrence deductible                                              |  | $1.0 billion per occurrence(c)           
|                                            
|Earthquake(a)(b)                             |  | $75 million annual aggregate exposure (which
    includes amounts paid for property damage and business
    interruption loss), plus $1 million per occurrence
    deductible           |  | $325 million in the aggregate per year(c)
|                                            
|Acts of terrorism(d)                         |  | $2.8 million per occurrence deductible
    (plus 10% of each and every loss with a maximum per occurrence
    exposure of $35.3 million which includes the
    $2.8 million deductible) |  | $825 million per occurrence(e)           



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | We retain up to $75 million of such loss
    calculated throughout the portfolio. In the event of a loss in
    excess of this retention limit, the third-party insurance
    carriers would be obligated to cover the losses up to the stated
    coverage amounts in the above table.                                                                                                                                                                                                                   
|   
|(b) |  | The amount of the third-party insurance relating
    to earthquakes is based on maximum probable loss studies
    performed by independent third parties. The maximum annual
    aggregate payment amount for earthquake loss is
    $325 million, inclusive of our loss exposure of
    $75 million plus $1 million per occurrence deductible.
    There can be no assurance that the maximum probable loss studies
    have accurately estimated losses that may occur.                                 
|   
|(c) |  | These amounts include our loss
    exposure/deductible amount.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(d) |  | The coverage includes nuclear, chemical and
    biological events. The coverage does not apply to non-TRIA
    (Terrorism Insurance Act of 2002) events (which are terrorism
    events that are not committed by a foreigner or a foreign
    country). We maintain separate insurance with a
    $325 million annual aggregate limit subject to a deductible
    of $1 million for non-TRIA events. This separate coverage
    for non-TRIA events excludes nuclear, biological and chemical
    events.
|   
|(e) |  | This amount is in excess of our deductible
    amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Pollution:We have
pollution and remediation insurance coverage for both sudden and
gradual events. Limits for this exposure are $2 million per
loss and $10 million aggregate per year subject to a
deductible of $100,000.

Workers Compensation, Automobile Liability and
General Liability:We have per
occurrence deductible amounts for workers compensation of
$500,000, auto liability of $250,000 and general liability of
$1,000,000.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)


NOTE 26  SUBSEQUENT
EVENTS

The following transactions occurred subsequent to
December 31, 2003, through March 5, 2004:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | In January 2004, Equity Office redeemed all of
    its 4,562,900 outstanding 8 5/8% Series C Cumulative
    Redeemable Preferred Shares of Beneficial Interest. The
    Series C Preferred Shares were redeemed at a redemption
    price of $25.00 per share for an aggregate redemption price
    of approximately $114.6 million, including accrued
    distributions. The deferred issuance costs of approximately
    $4.1 million will be reflected as a preferred distribution
    and a reduction of net income available to unitholders. In
    connection with such redemption, we redeemed all of the
    Series C Preferred Units from Equity Office.
|
| | 2. | We repaid $300 million of 6.50% unsecured
    notes and $100 million of 6.90% unsecured notes that
    matured in January 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | 3. | We extended the cash settlement dates of two
    $400 million forward-starting interest rate swaps from
    January 2004 to April 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | 4. | We sold Cal Center located in Sacramento,
    California to an unaffiliated party for approximately
    $18.5 million. Cal Center consisted of approximately
    118,172 square feet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | 5. | We acquired the remaining interest in the 1301
    Avenue of the Americas office building for approximately
    $60.7 million. Our economic interest in the joint venture
    after the acquisition is 100% and as a result of the acquisition
    the property is now consolidated.                                                                                                                                                                                                                                                                                                                                                                             
|
| | 6. | In February 2004, we prepaid the mortgage notes
    that were secured by 580 California for approximately
    $56.5 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

None.






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

Evaluation of Disclosure Controls and
Procedures

Equity Offices principal executive officer,
Richard D. Kincaid, and principal financial officer, Marsha
C. Williams, evaluated as of December 31, 2003 the
effectiveness of the design and operation of our disclosure
controls and other procedures that are designed to ensure that
information required to be disclosed by us in the reports that
we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms. As a result
of this evaluation, these executive officers have concluded
that, as of such date, the design and operation of our
disclosure controls and procedures were effective.

Changes in Internal Control over Financial
Reporting

There were no changes in our internal control
over financial reporting identified in connection with the
evaluation referred to above that have materially affected, or
are reasonably likely to materially affect, our internal control
over financial reporting.

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PART III




Item 10.     Directors
and Executive Officers of the Registrant.

Information about Trustees of Equity Office is
incorporated by reference from the discussion under
Proposal 1 in Equity Offices Proxy Statement for the
2004 Annual Meeting of Shareholders. We believe that, during
2003, all Section 16(a) filing requirements with respect to
our equity securities were made by executive officers and
trustees of Equity Office on a timely basis. The balance of the
response to this item is contained in the discussion entitled
Executive and Senior Officers of Equity Office under
Item 1 of Part I of this report.

Information about our audit committee financial
expert is incorporated by reference to Equity Offices
Proxy Statement for the 2004 Annual Meeting of Shareholders.

Equity Office has adopted a code of ethics that
applies to its principal officer, principal financial officer
and principal accounting officer, which is available on our
website at: http://www.equityoffice.com. Any amendment to, or
waiver from, a provision of such code of ethics will be posted
on our website.




Item 11.     Executive
Compensation.

Information about executive compensation is
incorporated by reference from the discussion under the heading
Executive Compensation in Equity Offices Proxy
Statement for the 2004 Annual Meeting of Shareholders.






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

Information about security ownership of certain
beneficial owners and management, and information about Equity
Offices equity compensation plans are incorporated by
reference from the discussion under the headings Common
Share and Unit Ownership by Trustees and Executive
Officers and Equity Compensation Plan
Information in Equity Offices Proxy Statement for
the 2004 Annual Meeting of Shareholders.




Item 13.     Certain
Relationships and Related Transactions.

Information about certain relationships and
transactions with related parties is incorporated herein by
reference from the discussion under the heading Certain
Relationships and Related Transactions in Equity
Offices Proxy Statement for the 2004 Annual Meeting of
Shareholders.




Item 14.     Principal
Accountant Fees and Services.

Information about principal accountant fees and
services is incorporated by reference from the discussion under
the heading Independent Auditors in Equity
Offices Proxy Statement for the 2004 Annual Meeting
of Shareholders.

98



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PART IV




Item 15.     Exhibits,
Financial Statement Schedules and Reports on
Form 8-K.

(a)(1) Financial Statements:

Report of Independent Auditors



| |                                                                 
| | ----------------------------------------------------------------
| | Consolidated Balance Sheets as of
    December 31, 2003 and 2002



| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Consolidated Statements of Operations for the
    years ended December 31, 2003, 2002 and 2001                                                   
|
| | Consolidated Statements of Changes in
    Partners Capital and Net Comprehensive Income for the
    years ended December 31, 2003, 2002 and 2001
|
| | Consolidated Statements of Cash Flows for the
    years ended December 31, 2003, 2002 and 2001                                                   

Notes to Consolidated Financial Statements

(a)(2) Financial Statement Schedules:

Schedule III  Real Estate and
Accumulated Depreciation as of December 31, 2003

All other schedules for which provision is made
in the applicable accounting regulations of the SEC are not
required under the related instructions or are inapplicable and
therefore have been omitted.

(a)(3) Exhibits:



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

(b) Reports on Form 8-K:



| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | The following report on Form 8-K was filed
    during the quarter ended December 31, 2003:

|              |                  |  |                                           |                                                           
|------------- | ---------------- |  | ----------------------------------------- | ----------------------------------------------------------
|Date of Event |                  |  | Items Reported/Financial Statements Filed
|              |                  |  |                                          
|              | November 3, 2003 |  |                                           | Item 12. Results of Operations and Financial
    Condition

(c) Exhibits:

See Item 15(a)(3) above.

(d) Financial Statement Schedules:

Schedule III  Real Estate and
Accumulated Depreciation as of December 31, 2003.

99



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Appendix A


FINANCIAL COVENANT CALCULATIONS AS OF
DECEMBER 31, 2003

UNDER CERTAIN INDENTURE AGREEMENTS


EOP OPERATING LIMITED PARTNERSHIP

UNSECURED NOTES FINANCIAL COVENANT COMPLIANCE
AS OF DECEMBER 31, 2003


(Dollars in thousands)


Compliance with these financial covenants
requires EOP Partnership to apply specialized terms, the
definitions of which are set forth in the related unsecured note
indentures, and to calculate ratios in the manner prescribed in
the indentures.

This section presents such ratios as of
December 31, 2003 to show that EOP Partnership was in
compliance with the applicable financial covenants contained in
the unsecured note indentures, copies of which have been filed
as exhibits to the EOP Partnerships periodic reports filed
with the SEC. Management is not presenting these ratios and the
related calculations for any other purpose or for any other
period, and is not intending for these measures to otherwise
provide information about EOP Partnerships financial
condition or results of operations. Investors should not rely on
these measures other than for the purpose of testing EOP
Partnerships compliance with the financial covenants
contained in the unsecured note indentures as of
December 31, 2003.

Debt to Adjusted Total Assets

EOP Partnership may not, and may not permit a
subsidiary to, incur any Debt, other than intercompany Debt, if,
immediately after giving effect to the incurrence of such
additional Debt, the aggregate principal amount of all
outstanding Debt of EOP Partnership and its Subsidiaries on a
consolidated basis determined in accordance with GAAP is greater
than 60% of the sum of:



| |                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) Total Assets as of the end of the fiscal
    quarter covered in EOP Partnerships Annual Report on
    Form 10-K or Quarterly Report on Form 10-Q, as the
    case may be, most recently filed with the SEC prior to the
    incurrence of such additional Debt and                                                                 
|
| | (ii) the increase or decrease in Total
    Assets from the end of such quarter including, without
    limitation, any increase in Total Assets resulting from the
    incurrence of such additional Debt (such increase or decrease
    together with EOP Partnerships Total Assets is referred to
    as the Adjusted Total Assets).

|                                                                         |      |   |            |            | 
|------------------------------------------------------------------------ | ---- | - | ---------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,663))                |      | $ | 2,329,552  |           
|Unsecured notes (excluding a net premium of
    $12,412)                 |      |   | 8,816,500  |           
|Line of credit                                                           |      |   | 334,000    |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt |      |   | 797,268    |           
|                                                                         |      |   |           
|                                                                         | Debt |   | $          | 12,277,320 | 
|                                                                         |      |   |           
|Investments in real estate                                               |      | $ | 23,985,839 |           
|Developments in process                                                  |      |   | 75,232     |           
|Land available for development                                           |      |   | 251,151    |           
|Cash and cash equivalents                                                |      |   | 69,398     |           
|Escrow deposits and restricted cash                                      |      |   | 75,186     |           
|Investments in unconsolidated joint ventures                             |      |   | 1,127,232  |           

A-1



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##### Table of Contents



|                                                                                        |                       |  |         |            | 
|--------------------------------------------------------------------------------------- | --------------------- |  | ------- | ---------- | 
|Prepaid expenses and other assets (net of
    discount of $66,200)                      |                       |  | 344,940 |           
|Change in cash subsequent to December 31,
    2003 as a result of property dispositions |                       |  | 2,031   |           
|                                                                                        |                       |  |        
|                                                                                        | Adjusted Total Assets |  | $       | 25,931,009 | 
|                                                                                        |                       |  |        
|Ratio                                                                                   |                       |  | 47      | %         
|                                                                                        |                       |  |        
|Maximum Ratio                                                                           |                       |  | 60      | %         
|                                                                                        |                       |  |        

Secured Debt to Adjusted Total
Assets

EOP Partnership may not, and may not permit any
Subsidiary to, incur any Secured Debt of EOP Partnership or any
Subsidiary if, immediately after giving effect to the incurrence
of such additional Secured Debt, the aggregate principal amount
of all outstanding Secured Debt of EOP Partnership and its
Subsidiaries on a consolidated basis is greater than 40% of
Adjusted Total Assets.

|                                                                         |                       |   |           |            | 
|------------------------------------------------------------------------ | --------------------- | - | --------- | ---------- | 
|Mortgage debt (excluding a net discount of
    $(13,663))                |                       | $ | 2,329,552 |           
|EOP Partnerships share of unconsolidated
    non-recourse mortgage debt |                       |   | 797,268   |           
|                                                                         |                       |   |          
|                                                                         | Secured Debt          |   | $         | 3,126,820  | 
|                                                                         |                       |   |          
|                                                                         | Adjusted Total Assets |   | $         | 25,931,009 | 
|                                                                         |                       |   |          
|Ratio                                                                    |                       |   | 12        | %         
|                                                                         |                       |   |          
|Maximum Ratio                                                            |                       |   | 40        | %         
|                                                                         |                       |   |          

Consolidated Income Available for Debt Service
to Annual Debt Service Charge

EOP Partnership may not, and may not permit any
Subsidiary to, incur any Debt, other than intercompany Debt
(provided that, in the case of Debt owed to Subsidiaries, such
Debt is subordinate in right of payment to the debt securities),
if the ratio of Consolidated Income Available for Debt Service
to Annual Debt Service Charge (in each case as defined below)
for the period consisting of the four consecutive fiscal
quarters most recently ended prior to the date on which the
additional Debt is to be incurred shall have been less than 1.5
to 1 on a pro forma basis after giving effect to the incurrence
of such Debt and to the application of the proceeds therefrom,
and calculated on the assumption that:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | such Debt and any other Debt incurred by EOP
    Partnership or a Subsidiary since the first day of such
    four-quarter period, which was outstanding at the end of such
    period, had been incurred at the beginning of such period and
    continued to be outstanding throughout such period, and the
    application of the proceeds of such Debt, including to refinance
    other Debt, had occurred at the beginning of such period;         
|
| |  | the repayment or retirement of any other Debt by
    EOP Partnership or a Subsidiary since the first day of such
    four-quarter period had been repaid or retired at the beginning
    of such period, except that, in determining the amount of Debt
    so repaid or retired, the amount of Debt under any revolving
    credit facility is computed based upon the average daily balance
    of such Debt during such period;                      
|
| |  | in the case of Acquired Indebtedness or Debt
    incurred in connection with any acquisition since the first day
    of the four-quarter period, the related acquisition had occurred
    as of the first day of the period with the appropriate
    adjustments with respect to the acquisition being included in
    the pro forma calculation; and                                                                                                   
|
| |  | in the case of any increase or decrease in Total
    Assets, or any other acquisition or disposition by EOP
    Partnership or any Subsidiary of any asset or group of assets,
    since the first day of such four-quarter period, including by
    merger, stock purchase or sale, or asset purchase or sale, such
    increase, decrease or other acquisition or disposition or any
    related repayment of Debt had occurred as of the first day of

A-2



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##### Table of Contents



| |  |                                                                                                                                                                                                                         
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | such period with the appropriate adjustments to
    revenues, expenses and Debt levels with respect to such
    increase, decrease or other acquisition or disposition being
    included in such pro forma calculation.

|                                                                            |                                                |   |         |           | 
|--------------------------------------------------------------------------- | ---------------------------------------------- | - | ------- | --------- | 
|Pro forma net income                                                        |                                                | $ | 476,622 |          
|Pro forma interest expense                                                  |                                                |   | 777,417 |          
|Pro forma amortization of mark to market
    discounts/ premiums            |                                                |   | (4,737  | )        
|Pro forma provision for taxes                                               |                                                |   | 5,204   |          
|Pro forma amortization and depreciation                                     |                                                |   | 707,567 |          
|Less pro forma income from investments in
    unconsolidated joint ventures |                                                |   | (71,153 | )        
|                                                                            |                                                |   |        
|                                                                            | Consolidated Income Available for Debt Service |   | $       | 1,890,920 | 
|                                                                            |                                                |   |        
|Pro forma interest expense                                                  |                                                | $ | 777,417 |          
|Pro forma amortization of mark to market
    discounts/ premiums            |                                                |   | (4,737  | )        
|                                                                            |                                                |   |        
|                                                                            | Annual Debt Service Charge                     |   | $       | 772,680   | 
|                                                                            |                                                |   |        
|Ratio                                                                       |                                                |   | 2.45    |          
|                                                                            |                                                |   |        
|Minimum Ratio                                                               |                                                |   | 1.50    |          
|                                                                            |                                                |   |        

Total Unencumbered Assets to Unsecured
Debt

EOP Partnership is required at all times to
maintain Total Unencumbered Assets of not less than 150% of the
aggregate outstanding principal amount of all outstanding
Unsecured Debt of EOP Partnership and its Subsidiaries on a
consolidated basis.

|                                                                        |                           |   |            |            | 
|----------------------------------------------------------------------- | ------------------------- | - | ---------- | ---------- | 
|Total undepreciated real estate assets                                  |                           | $ | 18,795,143 |           
|Cash and cash equivalents                                               |                           |   | 69,398     |           
|Escrow deposits and restricted cash                                     |                           |   | 75,186     |           
|Prepaid expenses and other assets (net of
    discount of $66,200)      |                           |   | 344,940    |           
|Unencumbered investments in unconsolidated joint
    venture properties |                           |   | 800,540    |           
|                                                                        |                           |   |           
|                                                                        | Total Unencumbered Assets |   | $          | 20,085,207 | 
|                                                                        |                           |   |           
|Unsecured notes (excluding a net premium of
    $12,412)                |                           | $ | 8,816,500  |           
|Line of credit                                                          |                           |   | 334,000    |           
|                                                                        |                           |   |           
|                                                                        | Unsecured Debt            |   | $          | 9,150,500  | 
|                                                                        |                           |   |           
|Ratio                                                                   |                           |   | 219        | %         
|                                                                        |                           |   |           
|Minimum Ratio (a)                                                       |                           |   | 150        | %         
|                                                                        |                           |   |           



---



|    |  |                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------
|(a) |  | The unsecured notes assumed in the merger with
    Spieker Partnership are subject to a minimum ratio of 165%.

A-3



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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.



| |                                  
| | ---------------------------------
| | EOP OPERATING LIMITED PARTNERSHIP



| |     |                               
| | --- | ------------------------------
| | By: | EQUITY OFFICE PROPERTIES TRUST

| |                        
| | -----------------------
| | its
    general partner



| |     |                       
| | --- | ----------------------
| | By: | /s/ RICHARD D. KINCAID

| |                                      
| | -------------------------------------
| |                                      
| | Richard D. Kincaid                   
| | President and Chief Executive Officer
|
| | Date: March 15, 2004                 

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant in the capacities
indicated as of March 15, 2004.

|                                             |  |                                                                                          |  | 
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | 
|                                             |  |                                                                                         
|Signature                                    |  | Title                                                                                   
|                                             |  |                                                                                         
|                                            
|/s/ RICHARD D. KINCAIDRichard D. Kincaid     |  | President, Chief Executive Officer and Trustee
    (principal executive officer)        
|                                            
|/s/ MARSHA C. WILLIAMSMarsha C. Williams     |  | Executive Vice President  Chief
    Financial Officer
    (principal financial officer)
|                                            
|/s/ STEPHEN M. BRIGGSStephen M. Briggs       |  | Senior Vice President  Chief
    Accounting Officer
    (principal accounting officer) 
|                                            
|/s/ SAMUEL ZELLSamuel Zell                   |  | Chairman of Equity Offices Board of Trustees                                           
|                                            
|/s/ THOMAS E. DOBROWSKIThomas E. Dobrowski   |  | Trustee                                                                                 
|                                            
|/s/ WILLIAM M. GOODYEARWilliam M. Goodyear   |  | Trustee                                                                                 
|                                            
|/s/ JAMES D. HARPER, JR.James D. Harper, Jr. |  | Trustee                                                                                 
|                                            
|David K. McKown                              |  | Trustee                                                                                 
|                                            
|/s/ JOHN S. MOODY, SR.John S. Moody, Sr.     |  | Trustee                                                                                 
|                                            
|/s/ JERRY M. REINSDORFJerry M. Reinsdorf     |  | Trustee                                                                                 

80



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|                                                     |  |         |  | 
|---------------------------------------------------- |  | ------- |  | 
|                                                     |  |        
|Signature                                            |  | Title  
|                                                     |  |        
|/s/ SHELI Z. ROSENBERGSheli Z. Rosenberg             |  | Trustee
|                                                    
|/s/ EDWIN N. SIDMANEdwin N. Sidman                   |  | Trustee
|                                                    
|/s/ WARREN E. SPIEKER, JR.Warren E. Spieker, Jr.     |  | Trustee
|                                                    
|/s/ JAN H.W.R. VAN DER VLISTJan H.W.R. van der Vlist |  | Trustee
|                                                    
|/s/ WILLIAM WILSON IIIWilliam Wilson III             |  | Trustee

81



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EXHIBIT INDEX

|            |     |  |             |                                                                                                                                                                                                                                                                                                                |          |                                                                                                                                   
|----------- | --- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |     |  | Description |                                                                                                                                                                                                                                                                                                                | Location
|            |     |  |             |                                                                                                                                                                                                                                                                                                                |         
|            | 3.1 |  |             | Third Amended and Restated Agreement of Limited
    Partnership of EOP Partnership                                                                                                                                                                                                                             |          | Incorporated by reference to Exhibit 99.8 to
    Equity Offices Current Report on Form 8-K filed with
    the SEC on July 5, 2001
|            | 3.2 |  |             | First Amendment to Third Amended and Restated
    Agreement of Limited Partnership                                                                                                                                                                                                                             |          | Incorporated by reference to Exhibit 4.1 to
    EOP Partnerships 2002 Third Quarter Form 10-Q                                    
|            | 3.3 |  |             | Second Amendment to the Third Amended and
    Restated Agreement of Limited Partnership                                                                                                                                                                                                                        |          | Incorporated by reference to Exhibit 10.1 to
    Equity Offices 2003 Second Quarter Form l0-Q                                    
|            | 3.4 |  |             | Third Amendment to the Third Amended and Restated
    Agreement of Limited Partnership                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 10.4 to
    Equity Offices 2003 Annual Report on Form 10-K                                  
|            | 4.1 |  |             | Indenture, dated as of September 2, 1997,
    between EOP Partnership and State Street Bank and Trust Company                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 4.1 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.2 |  |             | First Supplemental Indenture, dated as of
    February 9, 1998, between EOP Partnership and State Street
    Bank and Trust Company                                                                                                                                                                            |          | Incorporated by reference to Exhibit 4.2 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.3 |  |             | $200,000,000 6.625% Note due 2005. Another
    $200,000,000 6.625% Note due 2005, identical in all material
    respects to the Note filed as Exhibit 4.4 to Equity
    Offices 1997 Annual Report on Form 10-K, as amended,
    has not been filed.                                                          |          | Incorporated by reference to Exhibit 4.4 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.4 |  |             | $200,000,000 6.750% Note due 2008. A $100,000,000
    6.750% Note due 2008, identical in all material respects other
    than principal amount to the Note filed as Exhibit 4.5 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended, has not been filed.                                    |          | Incorporated by reference to Exhibit 4.5 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.5 |  |             | $200,000,000 7.250% Note due 2018. A $50,000,000
    7.250% Note due 2018, identical in all material respects other
    than principal amount to the Note filed as Exhibit 4.6 to
    Equity Offices Annual Report on Form 10-K for the
    year ended December 31, 1997, as amended, has not been
    filed. |          | Incorporated by reference to Exhibit 4.6 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.6 |  |             | $30,000,000 7.24% Senior Note due 2004                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 4.8 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.7 |  |             | $50,000,000 7.36% Senior Note due 2005                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 4.9 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                   
|            | 4.8 |  |             | $50,000,000 7.44% Senior Note due 2006                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 4.10 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended                  



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##### Table of Contents



|            |      |  |             |                                                                                                                               |          |                                                                                                                                       
|----------- | ---- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------- | -------- | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                               | Location
|            |      |  |             |                                                                                                                               |         
|            | 4.9  |  |             | $50,000,000 7.41% Senior Note due 2007                                                                                        |          | Incorporated by reference to Exhibit 4.11 to
    Equity Offices 1997 Annual Report on Form 10-K, as
    amended)                     
|            | 4.10 |  |             | $250,000,000 6.50% Notes due 2004                                                                                             |          | Incorporated by reference to Exhibit 4.12 to
    Equity Offices 2000 Annual Report on Form 10-K, as
    amended                      
|            | 4.11 |  |             | $300,000,000 6.763% Notes due 2007                                                                                            |          | Incorporated by reference to Exhibit 4.13 to
    Equity Offices 2000 Annual Report on Form 10-K, as
    amended                      
|            | 4.12 |  |             | $225,000,000 7.25% Notes due 2028                                                                                             |          | Incorporated by reference to Exhibit 4.14 to
    Equity Offices 2000 Annual Report on Form 10-K, as
    amended                      
|            | 4.13 |  |             | $300,000,000 6.5% Notes due 2004                                                                                              |          | Incorporated by reference to Exhibit 4.16 to
    Equity Offices 2000 Annual Report on Form 10-K, as
    amended                      
|            | 4.14 |  |             | $500,000,000 6.8% Notes due 2009                                                                                              |          | Incorporated by reference to Exhibit 4.17 to
    Equity Offices 2000 Annual Report on Form 10-K, as
    amended                      
|            | 4.15 |  |             | $200,000,000 7.5% Notes due April 19, 2029                                                                                    |          | Incorporated by reference to Exhibit 4.23 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on April 19, 1999
|            | 4.16 |  |             | $400,000,000 8.375% Note due March 15, 2006                                                                                   |          | Incorporated by reference to Exhibit 4.24 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on March 24, 2000
|            | 4.17 |  |             | $100,000,000 8.375% Note due March 15, 2006                                                                                   |          | Incorporated by reference to Exhibit 4.25 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on March 24, 2000
|            | 4.18 |  |             | $360,000,000 8.10% Note due August 1, 2010
    of EOP Partnership                                                             |          | Incorporated by reference to Exhibit 4.1 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on August 8, 2000 
|            | 4.19 |  |             | Indenture, dated August 23, 2000, by and
    among EOP Partnership, Equity Office and State Street Bank and
    Trust Company |          | Incorporated by reference to Exhibit 4.1 to
    Equity Offices Registration Statement on Form S-3
    (SEC File No. 333-47754)       
|            | 4.20 |  |             | $300,000,000 (or applicable lesser amount) Senior
    Exchangeable Note due November 15, 2008, and related
    Guarantee      |          | Incorporated by reference to Exhibit 4.23 to
    Equity Offices 2001 Annual Report on Form 10-K, as
    amended                      
|            | 4.21 |  |             | $25,000,000 (or applicable lesser amount) Senior
    Exchangeable Note due November 15, 2008, and related
    Guarantee       |          | Incorporated by reference to Exhibit 4.24 to
    Equity Offices 2001 Annual Report on Form 10-K, as
    amended                      
|            | 4.22 |  |             | $325,000,000 (or applicable lesser amount) Senior
    Exchangeable Notes due November 15, 2008, and related
    Guarantee     |          | Incorporated by reference to Exhibit 4.25 to
    Equity Offices 2001 Annual Report on Form 10-K, as
    amended                      



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##### Table of Contents



|            |      |  |             |                                                                                                                                                                                                 |          |                                                                                                                                               
|----------- | ---- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                 | Location
|            |      |  |             |                                                                                                                                                                                                 |         
|            | 4.23 |  |             | Indenture, dated August 29, 2000, by and
    between EOP Partnership and U.S. Bank National Association
    (formerly known as U.S. Bank Trust National Association)                            |          | Incorporated by reference to Exhibit 4.1 to
    EOP Partnerships Registration Statement on Form S-3,
    as amended (SEC File No. 333- 43530)
|            | 4.24 |  |             | First Supplemental Indenture, dated June 18,
    2001, among EOP Partnership, Equity Office and U.S. Bank
    National Association (formerly known as U.S. Bank Trust
    National Association) |          | Incorporated by reference to Exhibit 4.2 to
    Equity Offices Registration Statement on Form S-3, as
    amended (SEC File No. 333-58976)   
|            | 4.25 |  |             | $400,000,000 7 3/4% Note due 2007                                                                                                                                                               |          | Incorporated by reference to Exhibit 4.5 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on November 20, 2000      
|            | 4.26 |  |             | $200,000,000 7 3/4% Note due 2007                                                                                                                                                               |          | Incorporated by reference to Exhibit 4.6 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on November 20, 2000      
|            | 4.27 |  |             | $500,000,000 7.000% Note due July 15, 2011,
    and related Guarantee                                                                                                                           |          | Incorporated by reference to Exhibit 4.4 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on July 18, 2001          
|            | 4.28 |  |             | $500,000,000 7.000% Note due July 15, 2011,
    and related Guarantee                                                                                                                           |          | Incorporated by reference to Exhibit 4.5 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on July 18, 2001          
|            | 4.29 |  |             | $100,000,000 7.000% Note due July 15, 2011,
    and related Guarantee                                                                                                                           |          | Incorporated by reference to Exhibit 4.6 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on July 18, 2001          
|            | 4.30 |  |             | $300,000,000 7.875% Note due July 15, 2031,
    and related Guarantee                                                                                                                           |          | Incorporated by reference to Exhibit 4.7 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on July 18, 2001          
|            | 4.31 |  |             | $400,000,000 6 3/4% Note due
    February 15, 2012, and related Guarantee                                                                                                                       |          | Incorporated by reference to Exhibit 4.1 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on February 15, 2002      
|            | 4.32 |  |             | $100,000,000 6 3/4% Note due
    February 15, 2012, and related Guarantee                                                                                                                       |          | Incorporated by reference to Exhibit 4.2 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on February 15, 2002      
|            | 4.33 |  |             | Indenture, dated as of December 6, 1995,
    among Spieker and State Street Bank and Trust, as Trustee                                                                                          |          | Incorporated by reference to Exhibit 99.17.1
    to Equity Offices Current Report on Form 8-K filed
    with the SEC on July 5, 2001         
|            | 4.34 |  |             | Fourth Supplemental Indenture, dated as of
    January 24, 1996, among Spieker, Spieker Partnership and
    State Street                                                                        |          | Incorporated by reference to Exhibit 99.17.7
    to Equity Offices Current Report on Form 8-K filed
    with the SEC on July 5, 2001         



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##### Table of Contents



|            |      |  |             |                                                                                                                                                                            |          |                                                                                                                                       
|----------- | ---- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                            | Location
|            |      |  |             |                                                                                                                                                                            |         
|            | 4.35 |  |             | $100,000,000 6.90% Note due January 15, 2004                                                                                                                               |          | Incorporated by reference to Exhibit 99.17.8
    to Equity Offices Current Report on Form 8-K filed
    with the SEC on July 5, 2001 
|            | 4.36 |  |             | Fifth Supplemental Indenture, dated as of
    June 20, 1996, among Spieker, Spieker Partnership and State
    Street                                                       |          | Incorporated by reference to Exhibit 99.17.9
    to Equity Offices Current Report on Form 8-K filed
    with the SEC on July 5, 2001 
|            | 4.37 |  |             | $100,000,000 Medium-Term Notes due nine months or
    more from July 19, 1996                                                                                              |          | Incorporated by reference to
    Exhibit 99.17.10 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.38 |  |             | Sixth Supplemental Indenture, dated as of
    December 10, 1996, among Spieker, Spieker Partnership and
    State Street                                                   |          | Incorporated by reference to
    Exhibit 99.17.12 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.39 |  |             | $100,000,000 7.125% Note due December 1, 2006                                                                                                                              |          | Incorporated by reference to
    Exhibit 99.17.13 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.40 |  |             | Seventh Supplemental Indenture, dated as of
    December 10, 1996, among Spieker, Spieker Partnership and
    State Street                                                 |          | Incorporated by reference to
    Exhibit 99.17.14 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.41 |  |             | $25,000,000 7.875% Note due December 1, 2016                                                                                                                               |          | Incorporated by reference to
    Exhibit 99.17.15 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.42 |  |             | Eighth Supplemental Indenture, dated as of
    July 14, 1997, among Spieker, Spieker Partnership and State
    Street                                                      |          | Incorporated by reference to
    Exhibit 99.17.16 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.43 |  |             | $150,000,000 7.125% Note due July 1, 2009                                                                                                                                  |          | Incorporated by reference to
    Exhibit 99.17.17 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.44 |  |             | Ninth Supplemental Indenture, dated as of
    September 29, 1997, among Spieker, Spieker Partnership,
    First Trust of California, National Association and State Street |          | Incorporated by reference to
    Exhibit 99.17.18 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.45 |  |             | $150,000,000 7.50% Debenture due October 1,
    2027                                                                                                                       |          | Incorporated by reference to
    Exhibit 99.17.19 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.46 |  |             | Tenth Supplemental Indenture, dated as of
    December 8, 1997, among Spieker, Spieker Partnership and
    First Trust of California, National Association                 |          | Incorporated by reference to
    Exhibit 99.17.20 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.47 |  |             | $200,000,000 7.35% Debenture due December 1,
    2017                                                                                                                      |          | Incorporated by reference to
    Exhibit 99.17.21 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.48 |  |             | Eleventh Supplemental Indenture, dated as of
    January 27, 1998, among Spieker, Spieker Partnership and
    First Trust of California, National Association              |          | Incorporated by reference to
    Exhibit 99.17.22 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.49 |  |             | $150,000,000 6.75% Note due January 15, 2008                                                                                                                               |          | Incorporated by reference to
    Exhibit 99.17.23 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001



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##### Table of Contents



|            |      |  |             |                                                                                                                                                                                                             |          |                                                                                                                                       
|----------- | ---- |  | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |      |  | Description |                                                                                                                                                                                                             | Location
|            |      |  |             |                                                                                                                                                                                                             |         
|            | 4.50 |  |             | Twelfth Supplemental Indenture, dated as of
    February 2, 1998, among Spieker, Spieker Partnership and
    First Trust of California, National Association                                                |          | Incorporated by reference to
    Exhibit 99.17.24 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.51 |  |             | $125,000,000 6.875% Note due February 1, 2005                                                                                                                                                               |          | Incorporated by reference to
    Exhibit 99.17.25 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.52 |  |             | Thirteenth Supplemental Indenture, dated as of
    February 2, 1998, among Spieker, Spieker Partnership and
    First Trust of California, National Association                                             |          | Incorporated by reference to
    Exhibit 99.17.26 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.53 |  |             | $1,500,000 7.0% Note due February 1, 2005                                                                                                                                                                   |          | Incorporated by reference to
    Exhibit 99.17.27 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.54 |  |             | Fourteenth Supplemental Indenture, dated as of
    April 29, 1998, among Spieker, Spieker Partnership and
    U.S. Bank National Association (formerly known as
    U.S. Bank Trust National Association)   |          | Incorporated by reference to
    Exhibit 99.17.28 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.55 |  |             | $25,000,000 6.88% Note due April 30, 2007                                                                                                                                                                   |          | Incorporated by reference to
    Exhibit 99.17.29 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.56 |  |             | Fifteenth Supplemental Indenture, dated as of
    May 11, 1999, among Spieker, Spieker Partnership and
    U.S. Bank National Association (formerly known as
    U.S. Bank Trust National Association)      |          | Incorporated by reference to
    Exhibit 99.17.30 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.57 |  |             | $200,000,000 6.8% Note due May 1, 2004                                                                                                                                                                      |          | Incorporated by reference to
    Exhibit 99.17.31 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.58 |  |             | $200,000,000 7.25% Note due May 1, 2009                                                                                                                                                                     |          | Incorporated by reference to
    Exhibit 99.17.32 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.59 |  |             | Sixteenth Supplemental Indenture, dated as of
    December 11, 2000, among Spieker, Spieker Partnership and
    U.S. Bank National Association (formerly known as
    U.S. Bank Trust National Association) |          | Incorporated by reference to
    Exhibit 99.17.33 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.60 |  |             | $200,000,000 7.65% Note due December 15, 2010                                                                                                                                                               |          | Incorporated by reference to
    Exhibit 99.17.34 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001
|            | 4.61 |  |             | Seventeenth Supplemental Indenture relating to
    the substitution of Equity Office and EOP Partnership as
    successor entities for Spieker and Spieker Partnership,
    respectively                    |          | Incorporated by reference to
    Exhibit 99.17.35 to Equity Offices Current Report on
    Form 8-K filed with the SEC on July 5, 2001



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##### Table of Contents



|            |       |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                              |          |                                                                                                                                             
|----------- | ----- |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | --------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |       |  | Description |                                                                                                                                                                                                                                                                                                                                                                                                                                              | Location
|            |       |  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                              |         
|            | 4.62  |  |             | $400,000,000 6 3/4% Note due
    February 15, 2012, and related Guarantee                                                                                                                                                                                                                                                                                                                                                                    |          | Incorporated by reference to Exhibit 4.1 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on February 15, 2002    
|            | 4.63  |  |             | $100,000,000 6 3/4% Note due
    February 15, 2012, and related Guarantee                                                                                                                                                                                                                                                                                                                                                                    |          | Incorporated by reference to Exhibit 4.2 to
    EOP Partnerships Current Report on Form 8-K filed
    with the SEC on February 15, 2002    
|            | 4.64  |  |             | $400,000,000 5.875% Note due January 15,
    2013, and related Guarantee                                                                                                                                                                                                                                                                                                                                                                     |          | Incorporated by reference to Exhibit 4.1 to
    the Current Report on Form 8-K of EOP Partnership filed
    with the SEC on January 15, 2003
|            | 4.65  |  |             | $100,000,000 5.875% Note due January 15,
    2013, and related Guarantee                                                                                                                                                                                                                                                                                                                                                                     |          | Incorporated by reference to Exhibit 4.2 to
    the Current Report on Form 8-K of EOP Partnership filed
    with the SEC on January 15, 2003
|            | 10.1  |  |             | Amended and Restated Operating Agreement
    No. 1 of Wilson/ Equity Office, LLC                                                                                                                                                                                                                                                                                                                                                             |          | Incorporated by reference to Exhibit 10.13
    to Equity Offices 2000 Annual Report on Form 10-K, as
    amended                           
|            | 10.2  |  |             | Construction Loan Agreement, dated as of
    April 30, 2002, between Foundry Square Associates IV,
    LLC, a California limited liability company, as Borrower and
    Riverside Finance Company, L.L.C., a Delaware limited liability
    company, as Lender                                                                                                                                                                               |          | Incorporated by reference to Exhibit 10.6 to
    Equity Offices 2002 Second Quarter Form 10-Q                                              
|            | 10.3  |  |             | Separation Agreement dated as of
    December 24, 2002, by and between Wilson/ Equity Office,
    LLC, Wilson Investors  California, LLC, EOP Investor,
    L.L.C., EOP  Concar Investor, L.L.C., Equity Office
    Properties Management Corp., EOP Partnership, Equity Office,
    William Wilson III, Thomas P. Sullivan, Jacqueline U. Moore, A.
    Robert Paratte, H. Lee Van Boven, Terry Reagan, Scott Stephens
    and Jon Knorpp |          | Incorporated by reference to Exhibit 10.8 to
    Equity Offices 2002 Annual Report on Form 10-K                                            
|            | 10.4 |  |             | Change in Control Agreement by and between Equity
    Office Management L.L.C., Equity Office and Richard D. Kincaid                                                                                                                                                                                                                                                                                                                         |          | Incorporated by reference to Exhibit 10.7 to
    Equity Offices 2003 Third Quarter Form 10-Q                                               
|            | 10.5 |  |             | Change in Control Agreement by and between Equity
    Office Properties Management Corp., Equity Office and Peter H.
    Adams                                                                                                                                                                                                                                                                                                               |          | Incorporated by reference to Exhibit 10.3 to
    Equity Offices 2001 Third Quarter Form l0-Q                                               
|            | 10.6 |  |             | Assumption and Amendment to Change in Control
    Agreement by and between Equity Office Properties Management
    Corp., Equity Office, EOP Partnership and Peter H. Adams                                                                                                                                                                                                                                                                  |          | Incorporated by reference to Exhibit 10.2 to
    Equity Offices 2002 Third Quarter Form 10-Q                                               



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##### Table of Contents



|            |        |  |             |                                                                                                                                                                                        |          |                                                                                                             
|----------- | ------ |  | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ------------------------------------------------------------------------------------------------------------
|Exhibit No. |        |  | Description |                                                                                                                                                                                        | Location
|            |        |  |             |                                                                                                                                                                                        |         
|            | 10.7  |  |             | Change in Control Agreement by and between Equity
    Office Properties Management Corp., Equity Office and Stanley M.
    Stevens                                                     |          | Incorporated herein by reference to
    Exhibit 10.8 to Equity Offices 2001 Third Quarter
    Form l0-Q    
|            | 10.8  |  |             | Assumption and Amendment to Change in Control
    Agreement by and between Equity Office Properties Management
    Corp., Equity Office, EOP Partnership and Stanley M. Stevens        |          | Incorporated by reference to Exhibit 10.4 to
    Equity Offices 2002 Third Quarter Form 10-Q               
|            | 10.9  |  |             | Second Assumption and Amendment to Change in
    Control Agreement by and between Equity Office Management
    L.L.C., Equity Office, EOP Partnership and Stanley M. Stevens           |          | Incorporated herein by reference to
    Exhibit 10.26 to Equity Offices 2003 Annual Report on
    Form 10-K
|            | 10.10 |  |             | Severance Agreement by and between David A.
    Helfand and Equity Office                                                                                                              |          | Incorporated by reference to Exhibit 10.4 to
    Equity Offices 2003 Second Quarter Form 10-Q              
|            | 10.11  |  |             | Revolving Credit Agreement for $1,000,000,000
    Revolving Credit Facility dated as of May 9, 2003 among EOP
    Operating Limited Partnership and the Banks listed therein           |          | Incorporated by reference to Exhibit 4.1 to
    Equity Offices 2003 First Quarter Form l0-Q                
|            | 10.12  |  |             | Guaranty of Payment  No. 1 dated
    as of May 9, 2003                                                                                                                                |          | Incorporated by reference to Exhibit 4.2 to
    Equity Offices 2003 First Form 10-Q                        
|            | 10.13  |  |             | Guaranty of Payment  No. 2 dated
    as of May 9, 2003                                                                                                                                |          | Incorporated by reference to Exhibit 4.3 to
    Equity Offices 2003 First Quarter Form 10-Q                
|            | 10.14  |  |             | Revolving Credit Agreement for $1,000,000,000
    Revolving Credit Facility dated as of December 17, 2003
    among EOP Operating Limited Partnership and the Banks listed
    therein |          | Incorporated by reference to Exhibit 10.32
    to Equity Offices 2003 Annual Report on Form 10-K           
|            | 10.15  |  |             | Guaranty of Payment dated as of December 17,
    2003                                                                                                                                  |          | Incorporated by reference to Exhibit 10.33
    to Equity Offices 2003 Annual Report on Form 10-K           
|            | 21.1   |  |             | List of Subsidiaries                                                                                                                                                                   |          | Filed herewith                                                                                              
|            | 23.1   |  |             | Consent of Independent Auditors                                                                                                                                                        |          | Filed herewith                                                                                              
|            | 31.1   |  |             | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                |          | Filed herewith                                                                                              
|            | 31.2   |  |             | Section 1350 Certifications                                                                                                                                                            |          | Filed herewith                                                                                              



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



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##### Table of Contents



Schedule III  Real Estate and
Accumulated Depreciation as of December 31, 2003


|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              |  |   |     |  |  |   |        | 
|-- |  | --------------------------------------- |  | ----- | -------- | - | -------- | ------------ | ------- | ------------ | -- | --------------- | --------- | ----------------- | ------------- | - | --- | ------------ | ------ | ------------ | ------- | - | ------- | ------------ |  | - | --- |  |  | - | ------ | 
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |  
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           | Costs Capitalized |              
|   |  |                                         |  |       |          |   |          |              |         |              |    | Initial Cost to |           |                   | Subsequent to |  
|   |  |                                         |  |       |          |   |          |              |         |              |    | EOP Partnership |           |                   | Acquisition   |  
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |  
|   |  |                                         |  |       |          |   |          |              |         | Encumbrances |    |                 |           |                   | Building and  |   |     |              |        | Building and |        
|   |  | Description                             |  | Notes |          |   | Location |              | State   |              |    | at 12/31/03     |           |                   | Land          |   |     | Improvements |        |              | Land    |   |         | Improvements | 
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              | 
|   |  | Office Properties:                      |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              |  |   |     |  |  |   |        | 
|   |  | Atlanta Region                          |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              |  |   |     |  |  |   |        | 
|1  |  | 200 Galleria                            |  |       |          |   |          | Atlanta      |         |              | GA |                 |           | $                 |              |   |     | $            | 10,282 |              |         | $ | 58,266  |              |  | $ |    |  |  | $ | 3,571  | 
|2  |  | One Ninety One Peachtree Tower          |  |       |          |   |          | Atlanta      |         |              | GA |                 |           |                   |              |   |     |              | 46,500 |              |         |   | 263,500 |              |  |   |    |  |  |   | 1,461  | 
|3  |  | Central Park                            |  |       | (3)      |   |          | Atlanta      |         |              | GA |                 |           |                   | (55,399       | ) |     |              | 9,163  |              |         |   | 82,463  |              |  |   |    |  |  |   | 5,592  | 
|4  |  | Lakeside Office Park                    |  |       |          |   |          | Atlanta      |         |              | GA |                 |           |                   |              |   |     |              | 4,792  |              |         |   | 43,132  |              |  |   |    |  |  |   | 2,603  | 
|5  |  | Paces West                              |  |       | (3)      |   |          | Atlanta      |         |              | GA |                 |           |                   |              |   |     |              | 8,336  |              |         |   | 75,025  |              |  |   |    |  |  |   | 6,828  | 
|6  |  | Perimeter Center                        |  |       |          |   |          | Atlanta      |         |              | GA |                 |           |                   | (195,811      | ) |     |              | 52,374 |              |         |   | 415,161 |              |  |   | 279 |  |  |   | 30,301 | 
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              | 
|   |  | Atlanta Region Totals                   |  |       | (251,210 | ) |          |              | 131,447 |              |    |                 | 937,547   |                   |               |   | 279 |              |        |              | 50,356  |  
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |    
|   |  | Boston Region                           |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              |  |   |     |  |  |   |        | 
|7  |  | Crosby Corporate Center                 |  |       |          |   |          | Bedford      |         |              | MA |                 |           |                   |              |   |     |              | 5,958  |              |         |   | 53,620  |              |  |   | 115 |  |  |   | 2,297  | 
|8  |  | Crosby Corporate Center II              |  |       |          |   |          | Bedford      |         |              | MA |                 |           |                   |              |   |     |              | 9,385  |              |         |   | 27,584  |              |  |   | 9   |  |  |   | 5,226  | 
|9  |  | 125 Summer Street                       |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   | (69,541       | ) |     |              | 18,000 |              |         |   | 102,000 |              |  |   |    |  |  |   | 7,585  | 
|10 |  | 222 Berkley Street                      |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 25,593 |              |         |   | 145,029 |              |  |   |    |  |  |   | 4,067  | 
|11 |  | 500 Boylston Street                     |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 39,000 |              |         |   | 221,000 |              |  |   |    |  |  |   |       | 
|12 |  | Sixty State Street                      |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   | (74,541       | ) |     |              |       |              |         |   | 256,000 |              |  |   |    |  |  |   | 3,166  | 
|13 |  | 100 Summer Street                       |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 22,271 |              |         |   | 200,439 |              |  |   |    |  |  |   | 62,369 | 
|14 |  | 150 Federal Street                      |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 14,131 |              |         |   | 127,182 |              |  |   |    |  |  |   | 15,994 | 
|15 |  | 175 Federal Street                      |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 4,894  |              |         |   | 44,045  |              |  |   |    |  |  |   | 3,571  | 
|16 |  | 2 Oliver Street- 147 Milk Street        |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 5,017  |              |         |   | 45,157  |              |  |   |    |  |  |   | 3,109  | 
|17 |  | 225 Franklin Street                     |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 34,608 |              |         |   | 311,471 |              |  |   |    |  |  |   | 10,434 | 
|18 |  | 28 State Street                         |  |       | (3)      |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 9,513  |              |         |   | 85,623  |              |  |   |    |  |  |   | 41,649 | 
|19 |  | Center Plaza                            |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 18,942 |              |         |   | 170,480 |              |  |   |    |  |  |   | 9,555  | 
|20 |  | Russia Wharf                            |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              | 3,891  |              |         |   | 35,023  |              |  |   |    |  |  |   | 2,975  | 
|21 |  | South Station                           |  |       |          |   |          | Boston       |         |              | MA |                 |           |                   |              |   |     |              |       |              |         |   | 31,074  |              |  |   |    |  |  |   | 1,284  | 
|22 |  | New England Executive Park              |  |       |          |   |          | Burlington   |         |              | MA |                 |           |                   |              |   |     |              | 14,733 |              |         |   | 132,594 |              |  |   | 194 |  |  |   | 14,033 | 
|23 |  | New England Executive Park 17           |  |       |          |   |          | Burlington   |         |              | MA |                 |           |                   |              |   |     |              | 904    |              |         |   | 8,135   |              |  |   | 9   |  |  |   | 872    | 
|24 |  | The Tower at New England Executive Park |  |       |          |   |          | Burlington   |         |              | MA |                 |           |                   |              |   |     |              | 2,793  |              |         |   | 31,462  |              |  |   | 5   |  |  |   | 11,390 | 
|25 |  | One Memorial Drive                      |  |       |          |   |          | Cambridge    |         |              | MA |                 |           |                   | (56,658       | ) |     |              | 14,862 |              |         |   | 88,216  |              |  |   |    |  |  |   | 2,286  | 
|26 |  | One Canal Park                          |  |       |          |   |          | Cambridge    |         |              | MA |                 |           |                   |              |   |     |              | 2,006  |              |         |   | 18,054  |              |  |   |    |  |  |   | 1,912  | 
|27 |  | 245 First Street (a/k/a Riverview II)   |  |       |          |   |          | Cambridge    |         |              | MA |                 |           |                   |              |   |     |              | 3,978  |              |         |   | 35,804  |              |  |   | 6   |  |  |   | 1,818  | 
|28 |  | Ten Canal Park                          |  |       |          |   |          | Cambridge    |         |              | MA |                 |           |                   |              |   |     |              | 2,383  |              |         |   | 21,448  |              |  |   |    |  |  |   | 152    | 
|29 |  | Riverside                               |  |       |          |   |          | Newton       |         |              | MA |                 |           |                   |              |   |     |              | 24,000 |              |         |   | 69,849  |              |  |   |    |  |  |   | 19,876 | 
|30 |  | 175 Wyman Street                        |  |       |          |   |          | Walthan      |         |              | MA |                 |           |                   |              |   |     |              | 14,600 |              |         |   | 5,400   |              |  |   | 3   |  |  |   | 1,425  | 
|31 |  | Wellesley Office Park 1-4               |  |       |          |   |          | Wellesley    |         |              | MA |                 |           |                   | 0             |   |     |              | 5,518  |              |         |   | 49,662  |              |  |   | 6   |  |  |   | 4,620  | 
|32 |  | Wellesley 5-7                           |  |       |          |   |          | Wellesley    |         |              | MA |                 |           |                   |              |   |     |              | 9,335  |              |         |   | 84,018  |              |  |   | 12  |  |  |   | 4,521  | 
|33 |  | Wellesley 8                             |  |       |          |   |          | Wellesley    |         |              | MA |                 |           |                   |              |   |     |              | 1,639  |              |         |   | 14,754  |              |  |   | 2   |  |  |   | 193    | 
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              | 
|   |  | Boston Region Totals                    |  |       | (200,740 | ) |          |              | 307,955 |              |    |                 | 2,415,125 |                   |               |   | 361 |              |        |              | 236,377 |  
|   |  |                                         |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |    
|   |  | Chicago Region                          |  |       |          |   |          |              |         |              |    |                 |           |                   |               |   |     |              |        |              |         |   |         |              |  |   |     |  |  |   |        | 
|34 |  | 101 N. Wacker                           |  |       |          |   |          | Chicago      |         |              | IL |                 |           |                   |              |   |     |              | 10,035 |              |         |   | 90,319  |              |  |   |    |  |  |   | 4,136  | 
|35 |  | 200 West Adams                          |  |       |          |   |          | Chicago      |         |              | IL |                 |           |                   |              |   |     |              | 11,654 |              |         |   | 104,887 |              |  |   |    |  |  |   | 7,067  | 
|36 |  | 30 N. LaSalle Street                    |  |       | (3)      |   |          | Chicago      |         |              | IL |                 |           |                   |              |   |     |              | 12,489 |              |         |   | 112,401 |              |  |   |    |  |  |   | 7,788  | 
|37 |  | Civic Opera House                       |  |       |          |   |          | Chicago      |         |              | IL |                 |           |                   |              |   |     |              | 12,771 |              |         |   | 114,942 |              |  |   |    |  |  |   | 7,663  | 
|38 |  | One North Franklin                      |  |       | (3)      |   |          | Chicago      |         |              | IL |                 |           |                   |              |   |     |              | 9,830  |              |         |   | 88,474  |              |  |   |    |  |  |   | 7,209  | 
|39 |  | Presidents Plaza                        |  |       |          |   |          | Chicago      |         |              | IL |                 |           |                   |              |   |     |              | 13,435 |              |         |   | 120,919 |              |  |   |    |  |  |   | 9,354  | 
|40 |  | BP Tower                                |  |       | (3)      |   |          | Cleveland    |         |              | OH |                 |           |                   | (84,059       | ) |     |              | 17,403 |              |         |   | 157,260 |              |  |   |    |  |  |   | 9,066  | 
|41 |  | Community Corporate Center              |  |       | (3)      |   |          | Columbus     |         |              | OH |                 |           |                   |              |   |     |              | 3,019  |              |         |   | 27,170  |              |  |   |    |  |  |   | 3,343  | 
|42 |  | One Crosswoods Center                   |  |       | (3)      |   |          | Columbus     |         |              | OH |                 |           |                   |              |   |     |              | 1,059  |              |         |   | 9,530   |              |  |   |    |  |  |   | 2,054  | 
|43 |  | Corporate 500 Centre                    |  |       |          |   |          | Deerfield    |         |              | IL |                 |           |                   | (75,836       | ) |     |              | 20,100 |              |         |   | 113,900 |              |  |   |    |  |  |   | 5,670  | 
|44 |  | 1700 Higgins                            |  |       | (3)      |   |          | Des Plaines  |         |              | IL |                 |           |                   |              |   |     |              | 1,323  |              |         |   | 11,908  |              |  |   | 64  |  |  |   | 1,224  | 
|45 |  | Tri-State International                 |  |       |          |   |          | Lincolnshire |         |              | IL |                 |           |                   |              |   |     |              | 10,925 |              |         |   | 98,327  |              |  |   | 290 |  |  |   | 3,917  | 
|46 |  | 1111 West 22nd Street                   |  |       |          |   |          | Oak Brook    |         |              | IL |                 |           |                   |              |   |     |              | 4,834  |              |         |   | 43,508  |              |  |   | 48  |  |  |   | 2,071  | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|   |  |                         |         |              |              |   |           |          |             |   |              |               |  |            |          |             |  |           |  |          |  |  |    | 
|-- |  | ----------------------- | ------- | ------------ | ------------ | - | --------- | -------- | ----------- | - | ------------ | ------------- |  | ---------- | -------- | ----------- |  | --------- |  | -------- |  |  | -- | 
|   |  |                         |         |              |              |   |           |          |             |   |              |              
|   |  | Gross Amount Carried at |         |              |              |   |           |          |             |   |              |               | 
|   |  | Close of Period         |         |              |              |   |           |          |             |   |              |               | 
|   |  | 12/31/2003              |         |              |              |   |           |          |             |   |              |               | 
|   |  |                         |         |              |              |   |           |          | Date of     |   |              |               | 
|   |  |                         |         | Building and |              |   |           |          | Accumulated |   |              | Construction/ |  | Date       |          | Depreciable | 
|   |  | Land                    |         |              | Improvements |   |           | Total(1) |             |   | Depreciation |               |  | Renovation |          | Acquired    |  | Lives(2)  | 
|   |  |                         |         |              |              |   |           |          |             |   |              |               |  |            |          |             |  |           | 
|1  |  | $                       | 10,282  |              |              | $ | 61,838    |          |             | $ | 72,120       |               |  | $          | (5,970   | )           |  | 1985      |  | 06/19/00 |  |  | 40 | 
|2  |  |                         | 46,500  |              |              |   | 264,961   |          |             |   | 311,461      |               |  |            | (23,596  | )           |  | 1991      |  | 06/19/00 |  |  | 40 | 
|3  |  |                         | 9,163   |              |              |   | 88,055    |          |             |   | 97,218       |               |  |            | (15,726  | )           |  | 1986      |  | 10/17/95 |  |  | 40 | 
|4  |  |                         | 4,792   |              |              |   | 45,735    |          |             |   | 50,527       |               |  |            | (7,685   | )           |  | 1972-1978 |  | 12/19/97 |  |  | 40 | 
|5  |  |                         | 8,336   |              |              |   | 81,852    |          |             |   | 90,188       |               |  |            | (14,100  | )           |  | 1988      |  | 10/31/94 |  |  | 40 | 
|6  |  |                         | 52,653  |              |              |   | 445,462   |          |             |   | 498,115      |               |  |            | (74,591  | )           |  | 1970/1989 |  | 12/19/97 |  |  | 40 | 
|   |  |                         |         |              |              |   |           |          |             |   |              |               |  |            |          |             |  |           | 
|   |  |                         | 131,727 |              |              |   | 987,903   |          |             |   | 1,119,630    |               |  |            | (141,667 | )           |  |           |  |          |  |  |    | 
|   |  |                         |         |              |              |   |           |          |             |   |              |               |  |            |          |             |  |           | 
|7  |  |                         | 6,073   |              |              |   | 55,918    |          |             |   | 61,990       |               |  |            | (8,562   | )           |  | 1996      |  | 12/19/97 |  |  | 40 | 
|8  |  |                         | 9,393   |              |              |   | 32,810    |          |             |   | 42,204       |               |  |            | (6,540   | )           |  | 1998      |  | 12/19/97 |  |  | 40 | 
|9  |  |                         | 18,000  |              |              |   | 109,585   |          |             |   | 127,585      |               |  |            | (10,447  | )           |  | 1989      |  | 06/19/00 |  |  | 40 | 
|10 |  |                         | 25,593  |              |              |   | 149,096   |          |             |   | 174,689      |               |  |            | (13,701  | )           |  | 1991      |  | 06/19/00 |  |  | 40 | 
|11 |  |                         | 39,000  |              |              |   | 221,000   |          |             |   | 260,000      |               |  |            | (19,568  | )           |  | 1988      |  | 06/19/00 |  |  | 40 | 
|12 |  |                         |        |              |              |   | 259,166   |          |             |   | 259,166      |               |  |            | (22,958  | )           |  | 1979      |  | 06/19/00 |  |  | 40 | 
|13 |  |                         | 22,271  |              |              |   | 262,808   |          |             |   | 285,079      |               |  |            | (35,327  | )           |  | 1974/1990 |  | 03/18/98 |  |  | 40 | 
|14 |  |                         | 14,131  |              |              |   | 143,176   |          |             |   | 157,307      |               |  |            | (25,153  | )           |  | 1988      |  | 12/19/97 |  |  | 40 | 
|15 |  |                         | 4,894   |              |              |   | 47,616    |          |             |   | 52,510       |               |  |            | (7,651   | )           |  | 1977      |  | 12/19/97 |  |  | 40 | 
|16 |  |                         | 5,017   |              |              |   | 48,266    |          |             |   | 53,283       |               |  |            | (8,605   | )           |  | 1988      |  | 12/19/97 |  |  | 40 | 
|17 |  |                         | 34,608  |              |              |   | 321,905   |          |             |   | 356,513      |               |  |            | (49,711  | )           |  | 1966/1996 |  | 12/19/97 |  |  | 40 | 
|18 |  |                         | 9,513   |              |              |   | 127,272   |          |             |   | 136,784      |               |  |            | (30,712  | )           |  | 1968/1997 |  | 01/23/95 |  |  | 40 | 
|19 |  |                         | 18,942  |              |              |   | 180,036   |          |             |   | 198,978      |               |  |            | (28,293  | )           |  | 1969      |  | 12/19/97 |  |  | 40 | 
|20 |  |                         | 3,891   |              |              |   | 37,997    |          |             |   | 41,889       |               |  |            | (6,877   | )           |  | 1978-1982 |  | 12/19/97 |  |  | 40 | 
|21 |  |                         |        |              |              |   | 32,358    |          |             |   | 32,358       |               |  |            | (5,053   | )           |  | 1988      |  | 12/19/97 |  |  | 40 | 
|22 |  |                         | 14,927  |              |              |   | 146,627   |          |             |   | 161,553      |               |  |            | (24,675  | )           |  | 1970/1985 |  | 12/19/97 |  |  | 40 | 
|23 |  |                         | 912     |              |              |   | 9,007     |          |             |   | 9,920        |               |  |            | (1,542   | )           |  | 1970/1985 |  | 12/19/97 |  |  | 40 | 
|24 |  |                         | 2,798   |              |              |   | 42,852    |          |             |   | 45,650       |               |  |            | (7,298   | )           |  | 1971/1999 |  | 03/31/98 |  |  | 40 | 
|25 |  |                         | 14,862  |              |              |   | 90,502    |          |             |   | 105,364      |               |  |            | (8,046   | )           |  | 1985      |  | 06/19/00 |  |  | 40 | 
|26 |  |                         | 2,006   |              |              |   | 19,966    |          |             |   | 21,972       |               |  |            | (3,225   | )           |  | 1987      |  | 12/19/97 |  |  | 40 | 
|27 |  |                         | 3,984   |              |              |   | 37,621    |          |             |   | 41,606       |               |  |            | (5,659   | )           |  | 1985-1986 |  | 12/19/97 |  |  | 40 | 
|28 |  |                         | 2,383   |              |              |   | 21,600    |          |             |   | 23,983       |               |  |            | (3,258   | )           |  | 1987      |  | 12/19/97 |  |  | 40 | 
|29 |  |                         | 24,000  |              |              |   | 89,726    |          |             |   | 113,726      |               |  |            | (11,421  | )           |  | 2000      |  | 12/19/97 |  |  | 40 | 
|30 |  |                         | 14,603  |              |              |   | 6,825     |          |             |   | 21,428       |               |  |            | (6,826   | )           |  | 1999      |  | 12/19/97 |  |  | 40 | 
|31 |  |                         | 5,524   |              |              |   | 54,282    |          |             |   | 59,805       |               |  |            | (8,465   | )           |  | 1963/1984 |  | 12/19/97 |  |  | 40 | 
|32 |  |                         | 9,348   |              |              |   | 88,539    |          |             |   | 97,887       |               |  |            | (13,929  | )           |  | 1963/1984 |  | 12/19/97 |  |  | 40 | 
|33 |  |                         | 1,641   |              |              |   | 14,947    |          |             |   | 16,589       |               |  |            | (2,249   | )           |  | 1963/1984 |  | 12/19/97 |  |  | 40 | 
|   |  |                         |         |              |              |   |           |          |             |   |              |               |  |            |          |             |  |           | 
|   |  |                         | 308,315 |              |              |   | 2,651,502 |          |             |   | 2,959,818    |               |  |            | (375,751 | )           |  |           |  |          |  |  |    | 
|   |  |                         |         |              |              |   |           |          |             |   |              |               |  |            |          |             |  |           | 
|34 |  |                         | 10,035  |              |              |   | 94,455    |          |             |   | 104,491      |               |  |            | (15,636  | )           |  | 1980/1990 |  | 12/19/97 |  |  | 40 | 
|35 |  |                         | 11,654  |              |              |   | 111,954   |          |             |   | 123,608      |               |  |            | (19,460  | )           |  | 1985/1996 |  | 12/19/97 |  |  | 40 | 
|36 |  |                         | 12,489  |              |              |   | 120,189   |          |             |   | 132,678      |               |  |            | (21,380  | )           |  | 1974/1990 |  | 06/13/97 |  |  | 40 | 
|37 |  |                         | 12,771  |              |              |   | 122,604   |          |             |   | 135,376      |               |  |            | (20,533  | )           |  | 1929/1996 |  | 12/19/97 |  |  | 40 | 
|38 |  |                         | 9,830   |              |              |   | 95,684    |          |             |   | 105,514      |               |  |            | (15,866  | )           |  | 1991      |  | 12/31/92 |  |  | 40 | 
|39 |  |                         | 13,435  |              |              |   | 130,273   |          |             |   | 143,708      |               |  |            | (20,445  | )           |  | 1980-1982 |  | 12/19/97 |  |  | 40 | 
|40 |  |                         | 17,403  |              |              |   | 166,327   |          |             |   | 183,729      |               |  |            | (28,007  | )           |  | 1985      |  | 09/04/96 |  |  | 40 | 
|41 |  |                         | 3,019   |              |              |   | 30,513    |          |             |   | 33,532       |               |  |            | (5,822   | )           |  | 1987      |  | 06/14/90 |  |  | 40 | 
|42 |  |                         | 1,059   |              |              |   | 11,584    |          |             |   | 12,643       |               |  |            | (2,161   | )           |  | 1984      |  | 11/12/93 |  |  | 40 | 
|43 |  |                         | 20,100  |              |              |   | 119,570   |          |             |   | 139,670      |               |  |            | (11,283  | )           |  | 1986/1990 |  | 06/19/00 |  |  | 40 | 
|44 |  |                         | 1,387   |              |              |   | 13,132    |          |             |   | 14,519       |               |  |            | (2,503   | )           |  | 1986      |  | 11/12/93 |  |  | 40 | 
|45 |  |                         | 11,216  |              |              |   | 102,245   |          |             |   | 113,460      |               |  |            | (16,712  | )           |  | 1986      |  | 12/19/97 |  |  | 40 | 
|46 |  |                         | 4,882   |              |              |   | 45,579    |          |             |   | 50,461       |               |  |            | (7,762   | )           |  | 1984      |  | 12/19/97 |  |  | 40 | 



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##### Table of Contents



|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |  |  |  |        | 
|-- |  | -------------------------------- |  | ----- | -------- | - | -------- | ---------------- | ------- | ------------ | -- | --------------- | --------- | ----------------- | ------------- | - | --- | ------------ | ------ | ------------ | ------- |  | ------- | ------------ |  |  | --- |  |  |  | ------ | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |  
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           | Costs Capitalized |              
|   |  |                                  |  |       |          |   |          |                  |         |              |    | Initial Cost to |           |                   | Subsequent to |  
|   |  |                                  |  |       |          |   |          |                  |         |              |    | EOP Partnership |           |                   | Acquisition   |  
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |  
|   |  |                                  |  |       |          |   |          |                  |         | Encumbrances |    |                 |           |                   | Building and  |   |     |              |        | Building and |        
|   |  | Description                      |  | Notes |          |   | Location |                  | State   |              |    | at 12/31/03     |           |                   | Land          |   |     | Improvements |        |              | Land    |  |         | Improvements | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|47 |  | One Lincoln Centre               |  |       |          |   |          | Oakbrook         |         |              | IL |                 |           |                   |              |   |     |              | 7,350  |              |         |  | 41,650  |              |  |  |    |  |  |  | 2,720  | 
|48 |  | Oakbrook Terrace Tower           |  |       | (3)      |   |          | Oakbrook Terrace |         |              | IL |                 |           |                   |              |   |     |              | 11,950 |              |         |  | 107,552 |              |  |  | 486 |  |  |  | 7,497  | 
|49 |  | Westbrook Corporate Center       |  |       |          |   |          | Westchester      |         |              | IL |                 |           |                   | (97,864       | ) |     |              | 24,875 |              |         |  | 223,874 |              |  |  | 30  |  |  |  | 19,317 | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|   |  | Chicago Region Totals            |  |       | (257,759 | ) |          |                  | 173,054 |              |    |                 | 1,466,621 |                   |               |   | 918 |              |        |              | 100,096 | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |    
|   |  | Denver Region                    |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |  |  |  |        | 
|50 |  | 410 17th Street                  |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 4,474  |              |         |  | 40,264  |              |  |  |    |  |  |  | 6,764  | 
|51 |  | 4949 S. Syracuse                 |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 822    |              |         |  | 7,401   |              |  |  | 22  |  |  |  | 1,086  | 
|52 |  | Denver Corporate Center II & III |  |       | (3)      |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 4,059  |              |         |  | 36,534  |              |  |  | 3   |  |  |  | 5,185  | 
|53 |  | Denver Post Tower                |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              |       |              |         |  | 52,937  |              |  |  |    |  |  |  | 6,715  | 
|54 |  | Dominion Plaza                   |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 5,990  |              |         |  | 53,911  |              |  |  |    |  |  |  | 6,820  | 
|55 |  | Metropoint I                     |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 4,375  |              |         |  | 39,375  |              |  |  |    |  |  |  | 4,192  | 
|56 |  | Metropoint II                    |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 1,777  |              |         |  | 17,865  |              |  |  |    |  |  |  | 3,203  | 
|57 |  | US Bank Tower                    |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 6,301  |              |         |  | 65,842  |              |  |  |    |  |  |  | 42     | 
|58 |  | Tabor Center                     |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 12,948 |              |         |  | 116,536 |              |  |  |    |  |  |  | 36,642 | 
|59 |  | Trinity Place                    |  |       |          |   |          | Denver           |         |              | CO |                 |           |                   |              |   |     |              | 1,898  |              |         |  | 17,085  |              |  |  |    |  |  |  | 2,740  | 
|60 |  | Millennium Plaza                 |  |       |          |   |          | Englewood        |         |              | CO |                 |           |                   |              |   |     |              | 4,257  |              |         |  | 38,314  |              |  |  |    |  |  |  | 391    | 
|61 |  | Terrace Building                 |  |       |          |   |          | Englewood        |         |              | CO |                 |           |                   |              |   |     |              | 1,546  |              |         |  | 13,865  |              |  |  | 29  |  |  |  | 943    | 
|62 |  | The Quadrant                     |  |       | (3)      |   |          | Englewood        |         |              | CO |                 |           |                   |              |   |     |              | 4,357  |              |         |  | 39,215  |              |  |  |    |  |  |  | 4,045  | 
|63 |  | The Solarium                     |  |       |          |   |          | Englewood        |         |              | CO |                 |           |                   |              |   |     |              | 1,951  |              |         |  | 17,560  |              |  |  |    |  |  |  | 2,299  | 
|64 |  | Wells Fargo Center               |  |       |          |   |          | Minneapolis      |         |              | MN |                 |           |                   | (111,662      | ) |     |              | 39,045 |              |         |  | 221,255 |              |  |  |    |  |  |  | 612    | 
|65 |  | LaSalle Plaza                    |  |       |          |   |          | Minneapolis      |         |              | MN |                 |           |                   |              |   |     |              | 9,681  |              |         |  | 87,127  |              |  |  |    |  |  |  | 4,581  | 
|66 |  | Northland Plaza                  |  |       |          |   |          | Bloomington      |         |              | MN |                 |           |                   |              |   |     |              | 4,705  |              |         |  | 42,346  |              |  |  |    |  |  |  | 3,940  | 
|67 |  | 49 East Thomas Road              |  |       | (3)      |   |          | Phoenix          |         |              | AZ |                 |           |                   |              |   |     |              | 65     |              |         |  | 588     |              |  |  |    |  |  |  | 41     | 
|68 |  | One Phoenix Plaza                |  |       | (3)      |   |          | Phoenix          |         |              | AZ |                 |           |                   |              |   |     |              | 6,192  |              |         |  | 55,727  |              |  |  |    |  |  |  |       | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|   |  | Denver Region Totals             |  |       | (111,662 | ) |          |                  | 114,446 |              |    |                 | 963,746   |                   |               |   | 55  |              |        |              | 90,239  | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |    
|   |  | Houston Region                   |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |  |  |  |        | 
|69 |  | One American Center              |  |       | (3)      |   |          | Austin           |         |              | TX |                 |           |                   |              |   |     |              |       |              |         |  | 70,812  |              |  |  |    |  |  |  | 10,594 | 
|70 |  | One Congress Plaza               |  |       | (3)      |   |          | Austin           |         |              | TX |                 |           |                   |              |   |     |              | 6,502  |              |         |  | 58,521  |              |  |  |    |  |  |  | 4,055  | 
|71 |  | San Jacinto Center               |  |       | (3)      |   |          | Austin           |         |              | TX |                 |           |                   |              |   |     |              | 5,075  |              |         |  | 45,671  |              |  |  |    |  |  |  | 6,116  | 
|72 |  | 9400 NCX                         |  |       | (3)      |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 3,570  |              |         |  | 32,130  |              |  |  |    |  |  |  | 5,914  | 
|73 |  | Colonnade I & II                 |  |       |          |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 9,044  |              |         |  | 81,394  |              |  |  |    |  |  |  | 7,182  | 
|74 |  | Colonnade III                    |  |       |          |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 6,152  |              |         |  | 56,634  |              |  |  |    |  |  |  | 5,555  | 
|75 |  | Eighty-Eighty Central            |  |       |          |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 3,760  |              |         |  | 33,854  |              |  |  |    |  |  |  | 4,470  | 
|76 |  | Four Forest Plaza                |  |       | (3)      |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 4,768  |              |         |  | 42,911  |              |  |  |    |  |  |  | 6,843  | 
|77 |  | Lakeside Square                  |  |       |          |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 5,262  |              |         |  | 47,369  |              |  |  | 24  |  |  |  | 5,722  | 
|78 |  | North Central Plaza Three        |  |       | (3)      |   |          | Dallas           |         |              | TX |                 |           |                   |              |   |     |              | 3,612  |              |         |  | 32,689  |              |  |  |    |  |  |  | 5,138  | 
|79 |  | 2500 CityWest                    |  |       |          |   |          | Houston          |         |              | TX |                 |           |                   |              |   |     |              | 8,089  |              |         |  | 72,811  |              |  |  |    |  |  |  | 3,971  | 
|80 |  | Brookhollow Central              |  |       |          |   |          | Houston          |         |              | TX |                 |           |                   |              |   |     |              | 7,226  |              |         |  | 65,053  |              |  |  |    |  |  |  | 8,992  | 
|81 |  | Intercontinental Center          |  |       | (3)      |   |          | Houston          |         |              | TX |                 |           |                   |              |   |     |              | 1,602  |              |         |  | 14,420  |              |  |  | 70  |  |  |  | 2,428  | 
|82 |  | Northborough Tower               |  |       | (3)      |   |          | Houston          |         |              | TX |                 |           |                   |              |   |     |              | 1,355  |              |         |  | 12,199  |              |  |  | 37  |  |  |  | 5,657  | 
|83 |  | San Felipe Plaza                 |  |       | (3)      |   |          | Houston          |         |              | TX |                 |           |                   | (48,924       | ) |     |              | 13,471 |              |         |  | 117,984 |              |  |  | 20  |  |  |  | 11,534 | 
|84 |  | 909 E. Las Colinas Boulevard     |  |       |          |   |          | Irving           |         |              | TX |                 |           |                   |              |   |     |              | 5,129  |              |         |  | 46,164  |              |  |  | 13  |  |  |  | 2,873  | 
|85 |  | 545 E. John Carpenter Freeway    |  |       |          |   |          | Irving           |         |              | TX |                 |           |                   |              |   |     |              | 5,525  |              |         |  | 49,728  |              |  |  |    |  |  |  | 2,253  | 
|86 |  | One Lakeway Center               |  |       | (3)      |   |          | Metairie         |         |              | LA |                 |           |                   |              |   |     |              | 2,804  |              |         |  | 25,235  |              |  |  |    |  |  |  | 4,156  | 
|87 |  | Three Lakeway Center             |  |       | (3)      |   |          | Metairie         |         |              | LA |                 |           |                   |              |   |     |              | 4,695  |              |         |  | 43,661  |              |  |  | 59  |  |  |  | 4,053  | 
|88 |  | Two Lakeway Center               |  |       | (3)      |   |          | Metairie         |         |              | LA |                 |           |                   |              |   |     |              | 4,644  |              |         |  | 41,792  |              |  |  | 49  |  |  |  | 4,282  | 
|89 |  | 601 Tchoupitoulas Garage         |  |       |          |   |          | New Orleans      |         |              | LA |                 |           |                   |              |   |     |              | 1,180  |              |         |  | 10,620  |              |  |  |    |  |  |  | 298    | 
|90 |  | LL&E Tower                       |  |       |          |   |          | New Orleans      |         |              | LA |                 |           |                   |              |   |     |              | 6,186  |              |         |  | 55,672  |              |  |  | 46  |  |  |  | 7,976  | 
|91 |  | Texaco Center                    |  |       |          |   |          | New Orleans      |         |              | LA |                 |           |                   |              |   |     |              | 6,686  |              |         |  | 60,177  |              |  |  | 10  |  |  |  | 5,076  | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|   |  | Houston Region Totals            |  |       | (48,924  | ) |          |                  | 116,338 |              |    |                 | 1,117,502 |                   |               |   | 327 |              |        |              | 125,139 | 
|   |  |                                  |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |    
|   |  | Los Angeles Region               |  |       |          |   |          |                  |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |  |  |  |        | 
|92 |  | Stadium Towers                   |  |       |          |   |          | Anaheim          |         |              | CA |                 |           |                   |              |   |     |              | 6,683  |              |         |  | 37,868  |              |  |  |    |  |  |  | 1,361  | 
|93 |  | Brea Corporate Place             |  |       |          |   |          | Brea             |         |              | CA |                 |           |                   |              |   |     |              |       |              |         |  | 35,129  |              |  |  |    |  |  |  | 1,207  | 
|94 |  | Brea Corporate Plaza             |  |       |          |   |          | Brea             |         |              | CA |                 |           |                   |              |   |     |              | 1,902  |              |         |  | 10,776  |              |  |  |    |  |  |  | 748    | 
|95 |  | Brea Financial Commons           |  |       |          |   |          | Brea             |         |              | CA |                 |           |                   |              |   |     |              | 2,640  |              |         |  | 14,960  |              |  |  |    |  |  |  | 222    | 
|96 |  | Brea Park Centre                 |  |       |          |   |          | Brea             |         |              | CA |                 |           |                   |              |   |     |              | 2,682  |              |         |  | 15,198  |              |  |  |    |  |  |  | 1,826  | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  |  |          |  |  |    | 
|-- |  | ----------------------- | ------- | ------------ | ------------ |  | --------- | -------- | ----------- |  | ------------ | ------------- |  | ---------- | -------- | ----------- |  | ---------------- |  | -------- |  |  | -- | 
|   |  |                         |         |              |              |  |           |          |             |  |              |              
|   |  | Gross Amount Carried at |         |              |              |  |           |          |             |  |              |               | 
|   |  | Close of Period         |         |              |              |  |           |          |             |  |              |               | 
|   |  | 12/31/2003              |         |              |              |  |           |          |             |  |              |               | 
|   |  |                         |         |              |              |  |           |          | Date of     |  |              |               | 
|   |  |                         |         | Building and |              |  |           |          | Accumulated |  |              | Construction/ |  | Date       |          | Depreciable | 
|   |  | Land                    |         |              | Improvements |  |           | Total(1) |             |  | Depreciation |               |  | Renovation |          | Acquired    |  | Lives(2)         | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|47 |  |                         | 7,350   |              |              |  | 44,370    |          |             |  | 51,720       |               |  |            | (4,416   | )           |  | 1986             |  | 06/19/00 |  |  | 40 | 
|48 |  |                         | 12,436  |              |              |  | 115,048   |          |             |  | 127,484      |               |  |            | (20,519  | )           |  | 1988             |  | 04/16/97 |  |  | 40 | 
|49 |  |                         | 24,905  |              |              |  | 243,191   |          |             |  | 268,096      |               |  |            | (38,742  | )           |  | 1985/1996        |  | 12/19/97 |  |  | 40 | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|   |  |                         | 173,972 |              |              |  | 1,566,717 |          |             |  | 1,740,689    |               |  |            | (251,247 | )           |  |                  |  |          |  |  |    | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|50 |  |                         | 4,474   |              |              |  | 47,028    |          |             |  | 51,501       |               |  |            | (7,652   | )           |  | 1978             |  | 04/30/98 |  |  | 40 | 
|51 |  |                         | 845     |              |              |  | 8,487     |          |             |  | 9,331        |               |  |            | (1,388   | )           |  | 1982             |  | 07/15/98 |  |  | 40 | 
|52 |  |                         | 4,063   |              |              |  | 41,719    |          |             |  | 45,782       |               |  |            | (7,346   | )           |  | 1981/1993-1997   |  | 12/20/90 |  |  | 40 | 
|53 |  |                         |        |              |              |  | 59,652    |          |             |  | 59,652       |               |  |            | (10,363  | )           |  | 1984             |  | 04/21/98 |  |  | 40 | 
|54 |  |                         | 5,990   |              |              |  | 60,731    |          |             |  | 66,721       |               |  |            | (10,528  | )           |  | 1983             |  | 05/14/98 |  |  | 40 | 
|55 |  |                         | 4,375   |              |              |  | 43,566    |          |             |  | 47,941       |               |  |            | (6,385   | )           |  | 1987             |  | 07/15/98 |  |  | 40 | 
|56 |  |                         | 1,777   |              |              |  | 21,067    |          |             |  | 22,844       |               |  |            | (3,854   | )           |  | 1999             |  | 04/10/00 |  |  | 40 | 
|57 |  |                         | 6,301   |              |              |  | 65,884    |          |             |  | 72,185       |               |  |            | (1,283   | )           |  | 1974/2001        |  | 08/12/03 |  |  | 35 | 
|58 |  |                         | 12,948  |              |              |  | 153,178   |          |             |  | 166,126      |               |  |            | (20,120  | )           |  | 1985             |  | 04/30/98 |  |  | 40 | 
|59 |  |                         | 1,898   |              |              |  | 19,826    |          |             |  | 21,724       |               |  |            | (3,426   | )           |  | 1983             |  | 04/30/98 |  |  | 40 | 
|60 |  |                         | 4,257   |              |              |  | 38,705    |          |             |  | 42,962       |               |  |            | (5,449   | )           |  | 1982             |  | 05/19/98 |  |  | 40 | 
|61 |  |                         | 1,576   |              |              |  | 14,807    |          |             |  | 16,383       |               |  |            | (2,348   | )           |  | 1982             |  | 07/15/98 |  |  | 40 | 
|62 |  |                         | 4,357   |              |              |  | 43,260    |          |             |  | 47,617       |               |  |            | (7,894   | )           |  | 1985             |  | 12/01/92 |  |  | 40 | 
|63 |  |                         | 1,951   |              |              |  | 19,859    |          |             |  | 21,810       |               |  |            | (3,160   | )           |  | 1982             |  | 07/15/98 |  |  | 40 | 
|64 |  |                         | 39,045  |              |              |  | 221,867   |          |             |  | 260,912      |               |  |            | (19,677  | )           |  | 1988             |  | 06/19/00 |  |  | 40 | 
|65 |  |                         | 9,681   |              |              |  | 91,707    |          |             |  | 101,388      |               |  |            | (14,915  | )           |  | 1991             |  | 11/25/97 |  |  | 40 | 
|66 |  |                         | 4,705   |              |              |  | 46,286    |          |             |  | 50,991       |               |  |            | (7,080   | )           |  | 1985             |  | 07/02/98 |  |  | 40 | 
|67 |  |                         | 65      |              |              |  | 629       |          |             |  | 694          |               |  |            | (111     | )           |  | 1974/1993        |  | 12/11/96 |  |  | 40 | 
|68 |  |                         | 6,192   |              |              |  | 55,727    |          |             |  | 61,919       |               |  |            | (8,995   | )           |  | 1989             |  | 12/04/96 |  |  | 40 | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|   |  |                         | 114,500 |              |              |  | 1,053,985 |          |             |  | 1,168,485    |               |  |            | (141,971 | )           |  |                  |  |          |  |  |    | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|69 |  |                         |        |              |              |  | 81,405    |          |             |  | 81,405       |               |  |            | (14,168  | )           |  | 1984             |  | 11/01/95 |  |  | 40 | 
|70 |  |                         | 6,502   |              |              |  | 62,576    |          |             |  | 69,079       |               |  |            | (11,605  | )           |  | 1987             |  | 11/12/93 |  |  | 40 | 
|71 |  |                         | 5,075   |              |              |  | 51,787    |          |             |  | 56,861       |               |  |            | (9,197   | )           |  | 1987             |  | 12/13/91 |  |  | 40 | 
|72 |  |                         | 3,570   |              |              |  | 38,044    |          |             |  | 41,614       |               |  |            | (7,970   | )           |  | 1981/1995        |  | 06/24/94 |  |  | 40 | 
|73 |  |                         | 9,044   |              |              |  | 88,576    |          |             |  | 97,620       |               |  |            | (13,779  | )           |  | 1983-1985        |  | 09/30/98 |  |  | 40 | 
|74 |  |                         | 6,152   |              |              |  | 62,190    |          |             |  | 68,342       |               |  |            | (9,414   | )           |  | 1998             |  | 09/30/98 |  |  | 40 | 
|75 |  |                         | 3,760   |              |              |  | 38,324    |          |             |  | 42,083       |               |  |            | (6,681   | )           |  | 1984             |  | 10/01/97 |  |  | 40 | 
|76 |  |                         | 4,768   |              |              |  | 49,754    |          |             |  | 54,522       |               |  |            | (8,870   | )           |  | 1985             |  | 06/29/89 |  |  | 40 | 
|77 |  |                         | 5,286   |              |              |  | 53,091    |          |             |  | 58,378       |               |  |            | (8,964   | )           |  | 1987             |  | 11/24/97 |  |  | 40 | 
|78 |  |                         | 3,612   |              |              |  | 37,827    |          |             |  | 41,439       |               |  |            | (6,749   | )           |  | 1986/1994        |  | 04/21/92 |  |  | 40 | 
|79 |  |                         | 8,089   |              |              |  | 76,782    |          |             |  | 84,871       |               |  |            | (12,779  | )           |  | 1983             |  | 10/01/97 |  |  | 40 | 
|80 |  |                         | 7,226   |              |              |  | 74,044    |          |             |  | 81,271       |               |  |            | (13,249  | )           |  | 1979, 1981, 1995 |  | 10/01/97 |  |  | 40 | 
|81 |  |                         | 1,672   |              |              |  | 16,849    |          |             |  | 18,521       |               |  |            | (3,241   | )           |  | 1983/1991        |  | 06/28/89 |  |  | 40 | 
|82 |  |                         | 1,392   |              |              |  | 17,856    |          |             |  | 19,249       |               |  |            | (2,850   | )           |  | 1983/1990        |  | 08/03/89 |  |  | 40 | 
|83 |  |                         | 13,491  |              |              |  | 129,518   |          |             |  | 143,009      |               |  |            | (23,881  | )           |  | 1984             |  | 09/29/87 |  |  | 40 | 
|84 |  |                         | 5,142   |              |              |  | 49,037    |          |             |  | 54,180       |               |  |            | (6,006   | )           |  | 1988             |  | 01/07/99 |  |  | 40 | 
|85 |  |                         | 5,525   |              |              |  | 51,981    |          |             |  | 57,507       |               |  |            | (6,700   | )           |  | 1985             |  | 01/07/99 |  |  | 40 | 
|86 |  |                         | 2,804   |              |              |  | 29,391    |          |             |  | 32,195       |               |  |            | (5,895   | )           |  | 1981/1996        |  | 11/12/93 |  |  | 40 | 
|87 |  |                         | 4,754   |              |              |  | 47,714    |          |             |  | 52,469       |               |  |            | (8,301   | )           |  | 1987/1996        |  | 11/12/93 |  |  | 40 | 
|88 |  |                         | 4,693   |              |              |  | 46,074    |          |             |  | 50,767       |               |  |            | (8,614   | )           |  | 1984/1996        |  | 11/12/93 |  |  | 40 | 
|89 |  |                         | 1,180   |              |              |  | 10,917    |          |             |  | 12,097       |               |  |            | (1,764   | )           |  | 1982             |  | 09/03/97 |  |  | 40 | 
|90 |  |                         | 6,232   |              |              |  | 63,648    |          |             |  | 69,880       |               |  |            | (11,634  | )           |  | 1987             |  | 09/03/97 |  |  | 40 | 
|91 |  |                         | 6,696   |              |              |  | 65,253    |          |             |  | 71,949       |               |  |            | (11,502  | )           |  | 1984             |  | 09/03/97 |  |  | 40 | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|   |  |                         | 116,666 |              |              |  | 1,242,640 |          |             |  | 1,359,306    |               |  |            | (213,814 | )           |  |                  |  |          |  |  |    | 
|   |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|92 |  |                         | 6,683   |              |              |  | 39,229    |          |             |  | 45,912       |               |  |            | (2,579   | )           |  | 1988             |  | 07/02/01 |  |  | 40 | 
|93 |  |                         |        |              |              |  | 36,335    |          |             |  | 36,335       |               |  |            | (2,359   | )           |  | 1987             |  | 07/02/01 |  |  | 40 | 
|94 |  |                         | 1,902   |              |              |  | 11,524    |          |             |  | 13,426       |               |  |            | (875     | )           |  | 1982             |  | 07/02/01 |  |  | 40 | 
|95 |  |                         | 2,640   |              |              |  | 15,182    |          |             |  | 17,822       |               |  |            | (1,009   | )           |  | 1982/1989        |  | 07/02/01 |  |  | 40 | 
|96 |  |                         | 2,682   |              |              |  | 17,024    |          |             |  | 19,706       |               |  |            | (1,305   | )           |  | 1979-1982,1990   |  | 07/02/01 |  |  | 40 | 



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##### Table of Contents



|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |         |              |         |  |         |              |  |  |     |  |  |  |        | 
|--- |  | --------------------------------- |  | ----- | -------- | - | -------- | ------------- | ------- | ------------ | -- | --------------- | --------- | ----------------- | ------------- | - | -- | ------------ | ------- | ------------ | ------- |  | ------- | ------------ |  |  | --- |  |  |  | ------ | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |  
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           | Costs Capitalized |              
|    |  |                                   |  |       |          |   |          |               |         |              |    | Initial Cost to |           |                   | Subsequent to |  
|    |  |                                   |  |       |          |   |          |               |         |              |    | EOP Partnership |           |                   | Acquisition   |  
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |  
|    |  |                                   |  |       |          |   |          |               |         | Encumbrances |    |                 |           |                   | Building and  |   |    |              |         | Building and |        
|    |  | Description                       |  | Notes |          |   | Location |               | State   |              |    | at 12/31/03     |           |                   | Land          |   |    | Improvements |         |              | Land    |  |         | Improvements | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |         |              |         |  |         |              | 
|97  |  | Cerritos Towne Center             |  |       |          |   |          | Cerritos      |         |              | CA |                 |           |                   |              |   |    |              |        |              |         |  | 60,368  |              |  |  |    |  |  |  | 2,366  | 
|98  |  | 700 North Brand                   |  |       |          |   |          | Glendale      |         |              | CA |                 |           |                   | (24,180       | ) |    |              | 5,970   |              |         |  | 33,828  |              |  |  |    |  |  |  | 2,437  | 
|99  |  | 18301 Von Karman (Apple Building) |  |       |          |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 6,027   |              |         |  | 34,152  |              |  |  |    |  |  |  | 1,630  | 
|100 |  | 18581 Teller                      |  |       |          |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 1,485   |              |         |  | 8,415   |              |  |  |    |  |  |  | 1,632  | 
|101 |  | 2600 Michelson                    |  |       |          |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 11,291  |              |         |  | 63,984  |              |  |  |    |  |  |  | 1,957  | 
|102 |  | Fairchild Corporate Center        |  |       |          |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 2,363   |              |         |  | 13,388  |              |  |  |    |  |  |  | 655    | 
|103 |  | Inwood Park                       |  |       |          |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 3,543   |              |         |  | 20,079  |              |  |  |    |  |  |  | 714    | 
|104 |  | Tower 17                          |  |       |          |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 7,562   |              |         |  | 42,849  |              |  |  |    |  |  |  | 1,444  | 
|105 |  | 1920 Main Plaza                   |  |       | (3)      |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 5,281   |              |         |  | 47,526  |              |  |  |    |  |  |  | 4,018  | 
|106 |  | 2010 Main Plaza                   |  |       | (3)      |   |          | Irvine        |         |              | CA |                 |           |                   |              |   |    |              | 5,197   |              |         |  | 46,774  |              |  |  |    |  |  |  | 4,397  | 
|107 |  | The Tower in Westwood             |  |       |          |   |          | Los Angeles   |         |              | CA |                 |           |                   |              |   |    |              | 10,041  |              |         |  | 56,899  |              |  |  |    |  |  |  | 1,058  | 
|108 |  | 10880 Wilshire Boulevard          |  |       |          |   |          | Los Angeles   |         |              | CA |                 |           |                   |              |   |    |              | 28,009  |              |         |  | 149,841 |              |  |  |    |  |  |  | 9,153  | 
|109 |  | 10960 Wilshire Boulevard          |  |       |          |   |          | Los Angeles   |         |              | CA |                 |           |                   |              |   |    |              | 16,841  |              |         |  | 151,574 |              |  |  |    |  |  |  | 8,265  | 
|110 |  | 550 S. Hope                       |  |       |          |   |          | Los Angeles   |         |              | CA |                 |           |                   |              |   |    |              | 10,016  |              |         |  | 90,146  |              |  |  |    |  |  |  | 10,025 | 
|111 |  | Two California Plaza              |  |       | (3)      |   |          | Los Angeles   |         |              | CA |                 |           |                   |              |   |    |              |        |              |         |  | 156,197 |              |  |  |    |  |  |  | 51,634 | 
|112 |  | Waters Edge Phase I               |  |       | (6)      |   |          | Los Angeles   |         |              | CA |                 |           |                   |              |   |    |              | 16,697  |              |         |  |        |              |  |  |    |  |  |  | 44,000 | 
|113 |  | 1201 Dove Street                  |  |       |          |   |          | Newport Beach |         |              | CA |                 |           |                   |              |   |    |              | 1,998   |              |         |  | 11,320  |              |  |  |    |  |  |  | 419    | 
|114 |  | The City  3800 Chapman           |  |       |          |   |          | Orange        |         |              | CA |                 |           |                   |              |   |    |              | 3,019   |              |         |  | 17,107  |              |  |  |    |  |  |  | 239    | 
|115 |  | 500 Orange Tower                  |  |       |          |   |          | Orange        |         |              | CA |                 |           |                   |              |   |    |              | 2,944   |              |         |  | 32,561  |              |  |  |    |  |  |  | 3,509  | 
|116 |  | 500-600 City Parkway              |  |       |          |   |          | Orange        |         |              | CA |                 |           |                   |              |   |    |              | 7,296   |              |         |  | 41,342  |              |  |  |    |  |  |  | 15,871 | 
|117 |  | City Plaza                        |  |       |          |   |          | Orange        |         |              | CA |                 |           |                   |              |   |    |              | 6,809   |              |         |  | 38,584  |              |  |  |    |  |  |  | 3,780  | 
|118 |  | City Tower                        |  |       |          |   |          | Orange        |         |              | CA |                 |           |                   |              |   |    |              | 10,440  |              |         |  | 59,160  |              |  |  |    |  |  |  | 1,573  | 
|119 |  | 1100 Executive Tower              |  |       | (3)      |   |          | Orange        |         |              | CA |                 |           |                   |              |   |    |              | 4,622   |              |         |  | 41,599  |              |  |  |    |  |  |  | 1,866  | 
|120 |  | 3280 E. Foothill Boulevard        |  |       |          |   |          | Pasadena      |         |              | CA |                 |           |                   |              |   |    |              | 3,396   |              |         |  | 19,246  |              |  |  |    |  |  |  | 1,437  | 
|121 |  | 790 Colorado                      |  |       |          |   |          | Pasadena      |         |              | CA |                 |           |                   |              |   |    |              | 2,355   |              |         |  | 13,343  |              |  |  |    |  |  |  | 2,437  | 
|122 |  | Century Square                    |  |       |          |   |          | Pasadena      |         |              | CA |                 |           |                   |              |   |    |              | 6,787   |              |         |  | 38,457  |              |  |  |    |  |  |  | 23     | 
|123 |  | Pasadena Financial Center         |  |       |          |   |          | Pasadena      |         |              | CA |                 |           |                   |              |   |    |              | 4,779   |              |         |  | 27,084  |              |  |  |    |  |  |  | 346    | 
|124 |  | Centerside II                     |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   | (21,986       | ) |    |              | 5,777   |              |         |  | 32,737  |              |  |  |    |  |  |  | 1,467  | 
|125 |  | La Jolla Centre I & II            |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 12,904  |              |         |  | 73,122  |              |  |  |    |  |  |  | 2,483  | 
|126 |  | Nobel Corporate Plaza             |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 3,697   |              |         |  | 20,948  |              |  |  |    |  |  |  | 703    | 
|127 |  | One Pacific Heights               |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 3,072   |              |         |  | 17,408  |              |  |  |    |  |  |  | 746    | 
|128 |  | Pacific Corporate Plaza           |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 2,100   |              |         |  | 11,900  |              |  |  |    |  |  |  | 150    | 
|129 |  | Park Plaza                        |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 2,203   |              |         |  | 12,484  |              |  |  |    |  |  |  | 253    | 
|130 |  | Westridge                         |  |       |          |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 1,500   |              |         |  | 8,500   |              |  |  |    |  |  |  |       | 
|131 |  | Smith Barney Tower                |  |       | (3)      |   |          | San Diego     |         |              | CA |                 |           |                   |              |   |    |              | 2,658   |              |         |  | 23,919  |              |  |  |    |  |  |  | 4,614  | 
|132 |  | The Plaza at LaJolla Village      |  |       | (3)      |   |          | San Diego     |         |              | CA |                 |           |                   | (77,629       | ) |    |              | 10,916  |              |         |  | 98,243  |              |  |  | 19  |  |  |  | 4,239  | 
|133 |  | Griffin Towers                    |  |       |          |   |          | Santa Ana     |         |              | CA |                 |           |                   |              |   |    |              | 14,317  |              |         |  | 81,127  |              |  |  |    |  |  |  | 3,323  | 
|134 |  | Lincoln Town Center               |  |       |          |   |          | Santa Ana     |         |              | CA |                 |           |                   |              |   |    |              | 4,403   |              |         |  | 24,950  |              |  |  |    |  |  |  | 1,324  | 
|135 |  | 2951 28th Street                  |  |       |          |   |          | Santa Monica  |         |              | CA |                 |           |                   |              |   |    |              | 3,612   |              |         |  | 20,465  |              |  |  |    |  |  |  | 1,939  | 
|136 |  | 429 Santa Monica                  |  |       |          |   |          | Santa Monica  |         |              | CA |                 |           |                   |              |   |    |              | 2,523   |              |         |  | 14,298  |              |  |  |    |  |  |  | 975    | 
|137 |  | Arboretum Courtyard               |  |       |          |   |          | Santa Monica  |         |              | CA |                 |           |                   |              |   |    |              | 6,573   |              |         |  | 37,245  |              |  |  |    |  |  |  | 1,346  | 
|138 |  | Santa Monica Business Park        |  |       |          |   |          | Santa Monica  |         |              | CA |                 |           |                   | (7,947        | ) |    |              |        |              |         |  | 242,155 |              |  |  |    |  |  |  | 6,438  | 
|139 |  | Searise Office Tower              |  |       |          |   |          | Santa Monica  |         |              | CA |                 |           |                   |              |   |    |              | 4,380   |              |         |  | 24,818  |              |  |  |    |  |  |  | 1,341  | 
|140 |  | Wilshire Palisades                |  |       |          |   |          | Santa Monica  |         |              | CA |                 |           |                   | (39,392       | ) |    |              | 9,763   |              |         |  | 55,323  |              |  |  |    |  |  |  | 2,086  | 
|141 |  | Bixby Ranch                       |  |       |          |   |          | Seal Beach    |         |              | CA |                 |           |                   | (26,015       | ) |    |              | 6,450   |              |         |  | 36,550  |              |  |  |    |  |  |  | 1,810  | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |         |              |         |  |         |              | 
|    |  | Los Angeles Region Totals         |  |       | (197,149 | ) |          |               | 295,519 |              |    |                 | 2,265,947 |                   |               |   | 19 |              |         |              | 217,488 | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |   
|    |  | New York Region                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |         |              |         |  |         |              |  |  |     |  |  |  |        | 
|142 |  | 527 Madison Avenue                |  |       |          |   |          | New York      |         |              | NY |                 |           |                   |              |   |    |              | 9,155   |              |         |  | 51,877  |              |  |  |    |  |  |  | 4,303  | 
|143 |  | 850 Third Avenue                  |  |       | (3)(5)   |   |          | New York      |         |              | NY |                 |           |                   | (4,515        | ) |    |              | 9,606   |              |         |  | 86,453  |              |  |  | 30  |  |  |  | 5,894  | 
|144 |  | Park Avenue Tower                 |  |       | (5)      |   |          | New York      |         |              | NY |                 |           |                   | (180,000      | ) |    |              | 48,976  |              |         |  | 196,566 |              |  |  | 719 |  |  |  | 11,057 | 
|145 |  | Tower 56                          |  |       |          |   |          | New York      |         |              | NY |                 |           |                   | (22,428       | ) |    |              | 6,853   |              |         |  | 38,832  |              |  |  |    |  |  |  | 1,689  | 
|146 |  | Worldwide Plaza                   |  |       |          |   |          | New York      |         |              | NY |                 |           |                   | (214,856      | ) |    |              | 124,919 |              |         |  | 496,665 |              |  |  |    |  |  |  | 8,477  | 
|147 |  | Shelton Pointe                    |  |       | (3)      |   |          | Shelton       |         |              | CT |                 |           |                   |              |   |    |              | 1,514   |              |         |  | 13,625  |              |  |  |    |  |  |  | 1,430  | 
|148 |  | 177 Broad Street                  |  |       | (3)      |   |          | Stamford      |         |              | CT |                 |           |                   |              |   |    |              | 2,562   |              |         |  | 23,056  |              |  |  |    |  |  |  | 1,052  | 
|149 |  | 300 Atlantic Street               |  |       | (3)      |   |          | Stamford      |         |              | CT |                 |           |                   |              |   |    |              | 4,632   |              |         |  | 41,691  |              |  |  |    |  |  |  | 3,500  | 
|150 |  | Canterbury Green                  |  |       | (3)(4)   |   |          | Stamford      |         |              | CT |                 |           |                   |              |   |    |              | (0.0    | )            |         |  | 41,987  |              |  |  | 92  |  |  |  | 1,801  | 
|151 |  | Four Stamford Plaza               |  |       | (3)      |   |          | Stamford      |         |              | CT |                 |           |                   |              |   |    |              | 4,471   |              |         |  | 40,238  |              |  |  | 24  |  |  |  | 1,209  | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  |  |          |  |  |    | 
|--- |  | ----------------------- | ------- | ------------ | ------------ |  | --------- | -------- | ----------- |  | ------------ | ------------- |  | ---------- | -------- | ----------- |  | ---------------- |  | -------- |  |  | -- | 
|    |  |                         |         |              |              |  |           |          |             |  |              |              
|    |  | Gross Amount Carried at |         |              |              |  |           |          |             |  |              |               | 
|    |  | Close of Period         |         |              |              |  |           |          |             |  |              |               | 
|    |  | 12/31/2003              |         |              |              |  |           |          |             |  |              |               | 
|    |  |                         |         |              |              |  |           |          | Date of     |  |              |               | 
|    |  |                         |         | Building and |              |  |           |          | Accumulated |  |              | Construction/ |  | Date       |          | Depreciable | 
|    |  | Land                    |         |              | Improvements |  |           | Total(1) |             |  | Depreciation |               |  | Renovation |          | Acquired    |  | Lives(2)         | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|97  |  |                         |        |              |              |  | 62,734    |          |             |  | 62,734       |               |  |            | (3,977   | )           |  | 1989/1998        |  | 07/02/01 |  |  | 40 | 
|98  |  |                         | 5,970   |              |              |  | 36,265    |          |             |  | 42,235       |               |  |            | (3,687   | )           |  | 1981             |  | 06/19/00 |  |  | 40 | 
|99  |  |                         | 6,027   |              |              |  | 35,782    |          |             |  | 41,809       |               |  |            | (3,580   | )           |  | 1991             |  | 06/19/00 |  |  | 40 | 
|100 |  |                         | 1,485   |              |              |  | 10,047    |          |             |  | 11,532       |               |  |            | (725     | )           |  | 1983             |  | 07/02/01 |  |  | 40 | 
|101 |  |                         | 11,291  |              |              |  | 65,941    |          |             |  | 77,232       |               |  |            | (4,310   | )           |  | 1986             |  | 07/02/01 |  |  | 40 | 
|102 |  |                         | 2,363   |              |              |  | 14,043    |          |             |  | 16,405       |               |  |            | (962     | )           |  | 1979             |  | 07/02/01 |  |  | 40 | 
|103 |  |                         | 3,543   |              |              |  | 20,793    |          |             |  | 24,336       |               |  |            | (1,322   | )           |  | 1985/1996        |  | 07/02/01 |  |  | 40 | 
|104 |  |                         | 7,562   |              |              |  | 44,292    |          |             |  | 51,854       |               |  |            | (2,847   | )           |  | 1987             |  | 07/02/01 |  |  | 40 | 
|105 |  |                         | 5,281   |              |              |  | 51,544    |          |             |  | 56,825       |               |  |            | (10,158  | )           |  | 1988             |  | 09/29/94 |  |  | 40 | 
|106 |  |                         | 5,197   |              |              |  | 51,171    |          |             |  | 56,368       |               |  |            | (8,507   | )           |  | 1988             |  | 12/13/94 |  |  | 40 | 
|107 |  |                         | 10,041  |              |              |  | 57,956    |          |             |  | 67,997       |               |  |            | (3,662   | )           |  | 1989             |  | 07/02/01 |  |  | 40 | 
|108 |  |                         | 28,009  |              |              |  | 158,995   |          |             |  | 187,004      |               |  |            | (25,491  | )           |  | 1970/1992        |  | 12/19/97 |  |  | 40 | 
|109 |  |                         | 16,841  |              |              |  | 159,839   |          |             |  | 176,680      |               |  |            | (28,561  | )           |  | 1971/1992        |  | 12/19/97 |  |  | 40 | 
|110 |  |                         | 10,016  |              |              |  | 100,171   |          |             |  | 110,187      |               |  |            | (16,399  | )           |  | 1991             |  | 10/06/97 |  |  | 40 | 
|111 |  |                         |        |              |              |  | 207,831   |          |             |  | 207,831      |               |  |            | (46,188  | )           |  | 1992             |  | 08/23/96 |  |  | 40 | 
|112 |  |                         | 16,697  |              |              |  | 44,000    |          |             |  | 60,697       |               |  |            | (1,108   | )           |  | 2002             |  | 06/27/01 |  |  | 40 | 
|113 |  |                         | 1,998   |              |              |  | 11,739    |          |             |  | 13,737       |               |  |            | (736     | )           |  | 1975/1989        |  | 07/02/01 |  |  | 40 | 
|114 |  |                         | 3,019   |              |              |  | 17,346    |          |             |  | 20,365       |               |  |            | (1,073   | )           |  | 1984             |  | 07/02/01 |  |  | 40 | 
|115 |  |                         | 2,944   |              |              |  | 36,070    |          |             |  | 39,013       |               |  |            | (6,111   | )           |  | 1988             |  | 01/01/01 |  |  | 40 | 
|116 |  |                         | 7,296   |              |              |  | 57,213    |          |             |  | 64,508       |               |  |            | (4,282   | )           |  | 1974, 1978, 1998 |  | 07/02/01 |  |  | 40 | 
|117 |  |                         | 6,809   |              |              |  | 42,364    |          |             |  | 49,173       |               |  |            | (2,938   | )           |  | 1970             |  | 07/02/01 |  |  | 40 | 
|118 |  |                         | 10,440  |              |              |  | 60,733    |          |             |  | 71,173       |               |  |            | (3,935   | )           |  | 1988             |  | 07/02/01 |  |  | 40 | 
|119 |  |                         | 4,622   |              |              |  | 43,465    |          |             |  | 48,087       |               |  |            | (7,728   | )           |  | 1987             |  | 12/15/94 |  |  | 40 | 
|120 |  |                         | 3,396   |              |              |  | 20,683    |          |             |  | 24,080       |               |  |            | (1,327   | )           |  | 1982             |  | 07/02/01 |  |  | 40 | 
|121 |  |                         | 2,355   |              |              |  | 15,780    |          |             |  | 18,134       |               |  |            | (1,085   | )           |  | 1981             |  | 07/02/01 |  |  | 40 | 
|122 |  |                         | 6,787   |              |              |  | 38,481    |          |             |  | 45,267       |               |  |            | (2,367   | )           |  | 1984             |  | 07/02/01 |  |  | 40 | 
|123 |  |                         | 4,779   |              |              |  | 27,430    |          |             |  | 32,209       |               |  |            | (1,802   | )           |  | 1984/1996        |  | 07/02/01 |  |  | 40 | 
|124 |  |                         | 5,777   |              |              |  | 34,204    |          |             |  | 39,981       |               |  |            | (3,293   | )           |  | 1987             |  | 06/19/00 |  |  | 40 | 
|125 |  |                         | 12,904  |              |              |  | 75,605    |          |             |  | 88,509       |               |  |            | (4,818   | )           |  | 1986-1989        |  | 07/02/01 |  |  | 40 | 
|126 |  |                         | 3,697   |              |              |  | 21,651    |          |             |  | 25,348       |               |  |            | (1,383   | )           |  | 1985             |  | 07/02/01 |  |  | 40 | 
|127 |  |                         | 3,072   |              |              |  | 18,154    |          |             |  | 21,226       |               |  |            | (1,166   | )           |  | 1989             |  | 07/02/01 |  |  | 40 | 
|128 |  |                         | 2,100   |              |              |  | 12,050    |          |             |  | 14,150       |               |  |            | (737     | )           |  | 1988             |  | 07/02/01 |  |  | 40 | 
|129 |  |                         | 2,203   |              |              |  | 12,737    |          |             |  | 14,940       |               |  |            | (778     | )           |  | 1982             |  | 07/02/01 |  |  | 40 | 
|130 |  |                         | 1,500   |              |              |  | 8,500     |          |             |  | 10,000       |               |  |            | (522     | )           |  | 1980             |  | 07/02/01 |  |  | 40 | 
|131 |  |                         | 2,658   |              |              |  | 28,534    |          |             |  | 31,192       |               |  |            | (6,223   | )           |  | 1987             |  | 04/28/97 |  |  | 40 | 
|132 |  |                         | 10,935  |              |              |  | 102,482   |          |             |  | 113,418      |               |  |            | (18,103  | )           |  | 1987-1990        |  | 03/10/94 |  |  | 40 | 
|133 |  |                         | 14,317  |              |              |  | 84,450    |          |             |  | 98,767       |               |  |            | (3,854   | )           |  | 1987             |  | 07/02/01 |  |  | 40 | 
|134 |  |                         | 4,403   |              |              |  | 26,274    |          |             |  | 30,677       |               |  |            | (2,489   | )           |  | 1987             |  | 06/19/00 |  |  | 40 | 
|135 |  |                         | 3,612   |              |              |  | 22,405    |          |             |  | 26,016       |               |  |            | (1,337   | )           |  | 1971             |  | 07/02/01 |  |  | 40 | 
|136 |  |                         | 2,523   |              |              |  | 15,274    |          |             |  | 17,797       |               |  |            | (1,328   | )           |  | 1982             |  | 06/19/00 |  |  | 40 | 
|137 |  |                         | 6,573   |              |              |  | 38,591    |          |             |  | 45,164       |               |  |            | (2,382   | )           |  | 1999             |  | 07/02/01 |  |  | 40 | 
|138 |  |                         |        |              |              |  | 248,593   |          |             |  | 248,593      |               |  |            | (15,399  | )           |  | 1979-1981        |  | 07/02/01 |  |  | 40 | 
|139 |  |                         | 4,380   |              |              |  | 26,159    |          |             |  | 30,539       |               |  |            | (2,359   | )           |  | 1975             |  | 06/19/00 |  |  | 40 | 
|140 |  |                         | 9,763   |              |              |  | 57,410    |          |             |  | 67,173       |               |  |            | (5,170   | )           |  | 1981             |  | 06/19/00 |  |  | 40 | 
|141 |  |                         | 6,450   |              |              |  | 38,360    |          |             |  | 44,810       |               |  |            | (3,703   | )           |  | 1987             |  | 06/19/00 |  |  | 40 | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|    |  |                         | 295,538 |              |              |  | 2,483,435 |          |             |  | 2,778,973    |               |  |            | (278,040 | )           |  |                  |  |          |  |  |    | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                  | 
|142 |  |                         | 9,155   |              |              |  | 56,179    |          |             |  | 65,334       |               |  |            | (5,034   | )           |  | 1986             |  | 06/19/00 |  |  | 40 | 
|143 |  |                         | 9,636   |              |              |  | 92,348    |          |             |  | 101,983      |               |  |            | (16,395  | )           |  | 1960/1996        |  | 03/20/95 |  |  | 40 | 
|144 |  |                         | 49,695  |              |              |  | 207,623   |          |             |  | 257,317      |               |  |            | (28,891  | )           |  | 1986             |  | 07/15/98 |  |  | 40 | 
|145 |  |                         | 6,853   |              |              |  | 40,521    |          |             |  | 47,373       |               |  |            | (3,794   | )           |  | 1983             |  | 06/19/00 |  |  | 40 | 
|146 |  |                         | 124,919 |              |              |  | 505,143   |          |             |  | 630,062      |               |  |            | (65,221  | )           |  | 1989             |  | 10/01/98 |  |  | 40 | 
|147 |  |                         | 1,514   |              |              |  | 15,055    |          |             |  | 16,569       |               |  |            | (2,705   | )           |  | 1985/1993        |  | 11/26/91 |  |  | 40 | 
|148 |  |                         | 2,562   |              |              |  | 24,108    |          |             |  | 26,670       |               |  |            | (4,045   | )           |  | 1989             |  | 01/29/97 |  |  | 40 | 
|149 |  |                         | 4,632   |              |              |  | 45,191    |          |             |  | 49,823       |               |  |            | (7,859   | )           |  | 1987/1996        |  | 03/30/93 |  |  | 40 | 
|150 |  |                         | 92      |              |              |  | 43,789    |          |             |  | 43,880       |               |  |            | (7,684   | )           |  | 1987             |  | 12/15/92 |  |  | 40 | 
|151 |  |                         | 4,495   |              |              |  | 41,447    |          |             |  | 45,942       |               |  |            | (6,959   | )           |  | 1979/1994        |  | 08/31/94 |  |  | 40 | 



---



##### Table of Contents



|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           |                   |               |   |     |              |        |              |        |  |         |              |  |  |   |  |  |  |        |  
|--- |  | ---------------------------------------- |  | ----- | -------- | - | -------- | -------------- | ------- | ------------ | -- | --------------- | --------- | ----------------- | ------------- | - | --- | ------------ | ------ | ------------ | ------ |  | ------- | ------------ |  |  | - |  |  |  | ------ | -
|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           |                   |               |  
|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           | Costs Capitalized |              
|    |  |                                          |  |       |          |   |          |                |         |              |    | Initial Cost to |           |                   | Subsequent to |  
|    |  |                                          |  |       |          |   |          |                |         |              |    | EOP Partnership |           |                   | Acquisition   |  
|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           |                   |               |  
|    |  |                                          |  |       |          |   |          |                |         | Encumbrances |    |                 |           |                   | Building and  |   |     |              |        | Building and |       
|    |  | Description                              |  | Notes |          |   | Location |                | State   |              |    | at 12/31/03     |           |                   | Land          |   |     | Improvements |        |              | Land   |  |         | Improvements | 
|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           |                   |               |   |     |              |        |              |        |  |         |              | 
|152 |  | One and Two Stamford Plaza               |  |       | (3)      |   |          | Stamford       |         |              | CT |                 |           |                   |              |   |     |              | 8,268  |              |        |  | 74,409  |              |  |  |  |  |  |  | 6,597  |  
|153 |  | Three Stamford Plaza                     |  |       | (3)      |   |          | Stamford       |         |              | CT |                 |           |                   |              |   |     |              | 3,957  |              |        |  | 35,610  |              |  |  |  |  |  |  | 865    |  
|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           |                   |               |   |     |              |        |              |        |  |         |              | 
|    |  | New York Region Totals                   |  |       | (421,800 | ) |          |                | 224,911 |              |    |                 | 1,141,009 |                   |               |   | 865 |              |        |              | 47,873 | 
|    |  |                                          |  |       |          |   |          |                |         |              |    |                 |           |                   |               |   |    
|    |  | San Francisco Region                     |  |       |          |   |          |                |         |              |    |                 |           |                   |               |   |     |              |        |              |        |  |         |              |  |  |   |  |  |  |        |  
|154 |  | Golden Bear Center                       |  |       |          |   |          | Berkeley       |         |              | CA |                 |           |                   | (18,562       | ) |     |              | 4,500  |              |        |  | 25,500  |              |  |  |  |  |  |  | 1,362  |  
|155 |  | Sierra Point                             |  |       |          |   |          | Brisbane       |         |              | CA |                 |           |                   |              |   |     |              | 3,198  |              |        |  | 18,120  |              |  |  |  |  |  |  | 320    |  
|156 |  | Bay Park Plaza I & II                    |  |       |          |   |          | Burlingame     |         |              | CA |                 |           |                   |              |   |     |              | 12,906 |              |        |  | 73,133  |              |  |  |  |  |  |  | 1,298  |  
|157 |  | One Bay Plaza                            |  |       |          |   |          | Burlingame     |         |              | CA |                 |           |                   |              |   |     |              | 8,642  |              |        |  | 48,973  |              |  |  |  |  |  |  | 1,433  |  
|158 |  | One & Two Corporate Center               |  |       |          |   |          | Concord        |         |              | CA |                 |           |                   |              |   |     |              | 6,379  |              |        |  | 36,146  |              |  |  |  |  |  |  | 2,215  |  
|159 |  | 5813 Shellmound Street/5855 Christie Ave |  |       |          |   |          | Emeryville     |         |              | CA |                 |           |                   |              |   |     |              | 870    |              |        |  | 4,930   |              |  |  |  |  |  |  | 8      |  
|160 |  | Watergate Office Towers                  |  |       |          |   |          | Emeryville     |         |              | CA |                 |           |                   |              |   |     |              | 46,568 |              |        |  | 263,885 |              |  |  |  |  |  |  | (1,122 | )
|161 |  | Bayside Corporate Center                 |  |       |          |   |          | Foster City    |         |              | CA |                 |           |                   |              |   |     |              | 2,836  |              |        |  | 16,069  |              |  |  |  |  |  |  | 854    |  
|162 |  | Metro Center                             |  |       |          |   |          | Foster City    |         |              | CA |                 |           |                   |              |   |     |              |       |              |        |  | 282,329 |              |  |  |  |  |  |  | 3,806  |  
|163 |  | Parkside Towers                          |  |       |          |   |          | Foster City    |         |              | CA |                 |           |                   |              |   |     |              | 36,000 |              |        |  | 63,965  |              |  |  |  |  |  |  | 10,033 |  
|164 |  | Vintage Industrial Park                  |  |       |          |   |          | Foster City    |         |              | CA |                 |           |                   |              |   |     |              | 5,102  |              |        |  | 28,914  |              |  |  |  |  |  |  | 208    |  
|165 |  | Vintage Park Office                      |  |       |          |   |          | Foster City    |         |              | CA |                 |           |                   |              |   |     |              | 1,608  |              |        |  | 9,111   |              |  |  |  |  |  |  | 92     |  
|166 |  | Drakes Landing                          |  |       |          |   |          | Larkspur       |         |              | CA |                 |           |                   |              |   |     |              | 5,735  |              |        |  | 32,499  |              |  |  |  |  |  |  | 1,275  |  
|167 |  | Larkspur Landing Office Park             |  |       |          |   |          | Larkspur       |         |              | CA |                 |           |                   |              |   |     |              | 8,316  |              |        |  | 47,126  |              |  |  |  |  |  |  | 2,492  |  
|168 |  | Wood Island Office Complex               |  |       |          |   |          | Larkspur       |         |              | CA |                 |           |                   |              |   |     |              | 3,735  |              |        |  | 21,163  |              |  |  |  |  |  |  | 243    |  
|169 |  | PeopleSoft Plaza                         |  |       |          |   |          | Pleasanton     |         |              | CA |                 |           |                   |              |   |     |              | 7,039  |              |        |  | 39,887  |              |  |  |  |  |  |  | 3,372  |  
|170 |  | Redwood Shores                           |  |       |          |   |          | Redwood City   |         |              | CA |                 |           |                   |              |   |     |              | 4,166  |              |        |  | 23,608  |              |  |  |  |  |  |  | 74     |  
|171 |  | Seaport Centre                           |  |       |          |   |          | Redwood City   |         |              | CA |                 |           |                   |              |   |     |              | 24,000 |              |        |  | 136,000 |              |  |  |  |  |  |  | 1,762  |  
|172 |  | Seaport Plaza                            |  |       |          |   |          | Redwood City   |         |              | CA |                 |           |                   |              |   |     |              | 10,132 |              |        |  | 26,108  |              |  |  |  |  |  |  | 2,850  |  
|173 |  | Towers@Shore Center                      |  |       |          |   |          | Redwood City   |         |              | CA |                 |           |                   |              |   |     |              | 35,578 |              |        |  | 69,054  |              |  |  |  |  |  |  | 6,450  |  
|174 |  | 555 Twin Dolphin Plaza                   |  |       |          |   |          | Redwood Shores |         |              | CA |                 |           |                   |              |   |     |              | 11,790 |              |        |  | 66,810  |              |  |  |  |  |  |  | 3,035  |  
|175 |  | Douglas Corporate Center                 |  |       |          |   |          | Roseville      |         |              | CA |                 |           |                   |              |   |     |              | 2,391  |              |        |  | 13,550  |              |  |  |  |  |  |  | 129    |  
|176 |  | Johnson Ranch Corp Centre I & II         |  |       |          |   |          | Roseville      |         |              | CA |                 |           |                   |              |   |     |              | 4,380  |              |        |  | 24,819  |              |  |  |  |  |  |  | 157    |  
|177 |  | Roseville Corporate Center               |  |       |          |   |          | Roseville      |         |              | CA |                 |           |                   |              |   |     |              | 3,008  |              |        |  | 17,046  |              |  |  |  |  |  |  |       |  
|178 |  | 3600-3620 American River Drive           |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 2,209  |              |        |  | 12,518  |              |  |  |  |  |  |  | 955    |  
|179 |  | 455 University Avenue                    |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 465    |              |        |  | 2,634   |              |  |  |  |  |  |  | 170    |  
|180 |  | 555 University Avenue                    |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 939    |              |        |  | 5,323   |              |  |  |  |  |  |  | 275    |  
|181 |  | 575 & 601 University Avenue              |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,159  |              |        |  | 6,569   |              |  |  |  |  |  |  | 472    |  
|182 |  | 655 University Avenue                    |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 672    |              |        |  | 3,806   |              |  |  |  |  |  |  | 305    |  
|183 |  | 701 University Avenue                    |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 934    |              |        |  | 5,294   |              |  |  |  |  |  |  | 206    |  
|184 |  | 740 University Avenue                    |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 212    |              |        |  | 1,199   |              |  |  |  |  |  |  | 47     |  
|185 |  | Cal Center                               |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 2,393  |              |        |  | 13,560  |              |  |  |  |  |  |  | 662    |  
|186 |  | Exposition Centre                        |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,200  |              |        |  | 7,800   |              |  |  |  |  |  |  | 384    |  
|187 |  | Fidelity Plaza                           |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,149  |              |        |  | 6,513   |              |  |  |  |  |  |  | 96     |  
|188 |  | Gateway Oaks I                           |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 2,391  |              |        |  | 13,546  |              |  |  |  |  |  |  | 251    |  
|189 |  | Gateway Oaks II                          |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,341  |              |        |  | 7,600   |              |  |  |  |  |  |  | 310    |  
|190 |  | Gateway Oaks III                         |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 936    |              |        |  | 5,305   |              |  |  |  |  |  |  | 140    |  
|191 |  | Gateway Oaks IV                          |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,658  |              |        |  | 9,395   |              |  |  |  |  |  |  | 103    |  
|192 |  | Point West Commercentre                  |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 2,321  |              |        |  | 13,154  |              |  |  |  |  |  |  | 791    |  
|193 |  | Point West Corporate Center I & II       |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 3,653  |              |        |  | 14,779  |              |  |  |  |  |  |  | 562    |  
|194 |  | Point West I  Response Road             |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 774    |              |        |  | 4,384   |              |  |  |  |  |  |  | 399    |  
|195 |  | Point West III  River Park Dr.          |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,141  |              |        |  | 6,467   |              |  |  |  |  |  |  | 812    |  
|196 |  | The Orchard                              |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 1,226  |              |        |  | 6,948   |              |  |  |  |  |  |  | 291    |  
|197 |  | Wells Fargo Center                       |  |       |          |   |          | Sacramento     |         |              | CA |                 |           |                   |              |   |     |              | 17,819 |              |        |  | 100,975 |              |  |  |  |  |  |  | 2,470  |  
|198 |  | Bayhill Office Center                    |  |       |          |   |          | San Bruno      |         |              | CA |                 |           |                   | (89,278       | ) |     |              | 24,010 |              |        |  | 136,055 |              |  |  |  |  |  |  | 4,199  |  
|199 |  | Skyway Landing I & II                    |  |       |          |   |          | San Carlos     |         |              | CA |                 |           |                   |              |   |     |              | 15,535 |              |        |  | 35,994  |              |  |  |  |  |  |  | 17,089 |  
|200 |  | 120 Montgomery                           |  |       |          |   |          | San Francisco  |         |              | CA |                 |           |                   |              |   |     |              | 17,564 |              |        |  | 99,532  |              |  |  |  |  |  |  | 2,873  |  
|201 |  | 150 California                           |  |       |          |   |          | San Francisco  |         |              | CA |                 |           |                   |              |   |     |              | 12,567 |              |        |  | 46,184  |              |  |  |  |  |  |  | 4,448  |  
|202 |  | 201 California                           |  |       |          |   |          | San Francisco  |         |              | CA |                 |           |                   | (39,546       | ) |     |              | 10,520 |              |        |  | 59,611  |              |  |  |  |  |  |  | 3,752  |  
|203 |  | 188 Embarcadero                          |  |       |          |   |          | San Francisco  |         |              | CA |                 |           |                   | (14,233       | ) |     |              | 4,108  |              |        |  | 23,280  |              |  |  |  |  |  |  | 1,651  |  
|204 |  | 201 Mission Street                       |  |       | (3)      |   |          | San Francisco  |         |              | CA |                 |           |                   |              |   |     |              | 8,871  |              |        |  | 79,837  |              |  |  |  |  |  |  | 4,983  |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                 |  |          |  |  |    | 
|--- |  | ----------------------- | ------- | ------------ | ------------ |  | --------- | -------- | ----------- |  | ------------ | ------------- |  | ---------- | -------- | ----------- |  | --------------- |  | -------- |  |  | -- | 
|    |  |                         |         |              |              |  |           |          |             |  |              |              
|    |  | Gross Amount Carried at |         |              |              |  |           |          |             |  |              |               | 
|    |  | Close of Period         |         |              |              |  |           |          |             |  |              |               | 
|    |  | 12/31/2003              |         |              |              |  |           |          |             |  |              |               | 
|    |  |                         |         |              |              |  |           |          | Date of     |  |              |               | 
|    |  |                         |         | Building and |              |  |           |          | Accumulated |  |              | Construction/ |  | Date       |          | Depreciable | 
|    |  | Land                    |         |              | Improvements |  |           | Total(1) |             |  | Depreciation |               |  | Renovation |          | Acquired    |  | Lives(2)        | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                 | 
|152 |  |                         | 8,268   |              |              |  | 81,006    |          |             |  | 89,274       |               |  |            | (14,699  | )           |  | 1986/1994       |  | 03/30/93 |  |  | 40 | 
|153 |  |                         | 3,957   |              |              |  | 36,475    |          |             |  | 40,431       |               |  |            | (6,073   | )           |  | 1980/1994       |  | 12/15/92 |  |  | 40 | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                 | 
|    |  |                         | 225,777 |              |              |  | 1,188,882 |          |             |  | 1,414,659    |               |  |            | (169,359 | )           |  |                 |  |          |  |  |    | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                 | 
|154 |  |                         | 4,500   |              |              |  | 26,862    |          |             |  | 31,362       |               |  |            | (2,409   | )           |  | 1986            |  | 06/19/00 |  |  | 40 | 
|155 |  |                         | 3,198   |              |              |  | 18,440    |          |             |  | 21,638       |               |  |            | (1,136   | )           |  | 1979/1983       |  | 07/02/01 |  |  | 40 | 
|156 |  |                         | 12,906  |              |              |  | 74,431    |          |             |  | 87,336       |               |  |            | (6,741   | )           |  | 1985/1998       |  | 06/19/00 |  |  | 40 | 
|157 |  |                         | 8,642   |              |              |  | 50,406    |          |             |  | 59,049       |               |  |            | (4,661   | )           |  | 1979            |  | 06/19/00 |  |  | 40 | 
|158 |  |                         | 6,379   |              |              |  | 38,361    |          |             |  | 44,740       |               |  |            | (3,649   | )           |  | 1985-1987       |  | 06/19/00 |  |  | 40 | 
|159 |  |                         | 870     |              |              |  | 4,938     |          |             |  | 5,808        |               |  |            | (303     | )           |  | 1970-1971       |  | 07/02/01 |  |  | 40 | 
|160 |  |                         | 46,568  |              |              |  | 262,763   |          |             |  | 309,331      |               |  |            | (16,745  | )           |  | 1973/2001       |  | 07/02/01 |  |  | 40 | 
|161 |  |                         | 2,836   |              |              |  | 16,923    |          |             |  | 19,759       |               |  |            | (1,098   | )           |  | 1986-1987       |  | 07/02/01 |  |  | 40 | 
|162 |  |                         |        |              |              |  | 286,134   |          |             |  | 286,134      |               |  |            | (17,810  | )           |  | 1985-1988       |  | 07/02/01 |  |  | 40 | 
|163 |  |                         | 36,000  |              |              |  | 73,998    |          |             |  | 109,998      |               |  |            | (3,312   | )           |  | 2001            |  | 07/02/01 |  |  | 40 | 
|164 |  |                         | 5,102   |              |              |  | 29,122    |          |             |  | 34,225       |               |  |            | (1,792   | )           |  | 1985-1990       |  | 07/02/01 |  |  | 40 | 
|165 |  |                         | 1,608   |              |              |  | 9,203     |          |             |  | 10,810       |               |  |            | (761     | )           |  | 1985-1990       |  | 07/02/01 |  |  | 40 | 
|166 |  |                         | 5,735   |              |              |  | 33,774    |          |             |  | 39,509       |               |  |            | (2,262   | )           |  | 1986            |  | 07/02/01 |  |  | 40 | 
|167 |  |                         | 8,316   |              |              |  | 49,618    |          |             |  | 57,935       |               |  |            | (3,231   | )           |  | 1981-1982       |  | 07/02/01 |  |  | 40 | 
|168 |  |                         | 3,735   |              |              |  | 21,406    |          |             |  | 25,141       |               |  |            | (1,326   | )           |  | 1978            |  | 07/02/01 |  |  | 40 | 
|169 |  |                         | 7,039   |              |              |  | 43,259    |          |             |  | 50,298       |               |  |            | (3,868   | )           |  | 1984            |  | 06/19/00 |  |  | 40 | 
|170 |  |                         | 4,166   |              |              |  | 23,682    |          |             |  | 27,848       |               |  |            | (1,457   | )           |  | 1986            |  | 07/02/01 |  |  | 40 | 
|171 |  |                         | 24,000  |              |              |  | 137,762   |          |             |  | 161,762      |               |  |            | (12,103  | )           |  | 1988            |  | 06/19/00 |  |  | 40 | 
|172 |  |                         | 10,132  |              |              |  | 28,958    |          |             |  | 39,090       |               |  |            | (2,056   | )           |  | 2000            |  | 06/19/00 |  |  | 40 | 
|173 |  |                         | 35,578  |              |              |  | 75,504    |          |             |  | 111,082      |               |  |            | (4,015   | )           |  | 2002            |  | 07/02/01 |  |  | 40 | 
|174 |  |                         | 11,790  |              |              |  | 69,845    |          |             |  | 81,635       |               |  |            | (4,385   | )           |  | 1989            |  | 07/02/01 |  |  | 40 | 
|175 |  |                         | 2,391   |              |              |  | 13,680    |          |             |  | 16,071       |               |  |            | (849     | )           |  | 1990            |  | 07/02/01 |  |  | 40 | 
|176 |  |                         | 4,380   |              |              |  | 24,976    |          |             |  | 29,356       |               |  |            | (1,570   | )           |  | 1990-1998       |  | 07/02/01 |  |  | 40 | 
|177 |  |                         | 3,008   |              |              |  | 17,046    |          |             |  | 20,054       |               |  |            | (1,048   | )           |  | 1999            |  | 07/02/01 |  |  | 40 | 
|178 |  |                         | 2,209   |              |              |  | 13,473    |          |             |  | 15,682       |               |  |            | (832     | )           |  | 1977-1979/ 1997 |  | 07/02/01 |  |  | 40 | 
|179 |  |                         | 465     |              |              |  | 2,803     |          |             |  | 3,268        |               |  |            | (190     | )           |  | 1973            |  | 07/02/01 |  |  | 40 | 
|180 |  |                         | 939     |              |              |  | 5,598     |          |             |  | 6,538        |               |  |            | (382     | )           |  | 1974            |  | 07/02/01 |  |  | 40 | 
|181 |  |                         | 1,159   |              |              |  | 7,040     |          |             |  | 8,199        |               |  |            | (445     | )           |  | 1977            |  | 07/02/01 |  |  | 40 | 
|182 |  |                         | 672     |              |              |  | 4,111     |          |             |  | 4,783        |               |  |            | (252     | )           |  | 1979            |  | 07/02/01 |  |  | 40 | 
|183 |  |                         | 934     |              |              |  | 5,499     |          |             |  | 6,434        |               |  |            | (351     | )           |  | 1990            |  | 07/02/01 |  |  | 40 | 
|184 |  |                         | 212     |              |              |  | 1,246     |          |             |  | 1,458        |               |  |            | (78      | )           |  | 1973            |  | 07/02/01 |  |  | 40 | 
|185 |  |                         | 2,393   |              |              |  | 14,222    |          |             |  | 16,615       |               |  |            | (908     | )           |  | 1989            |  | 07/02/01 |  |  | 40 | 
|186 |  |                         | 1,200   |              |              |  | 8,184     |          |             |  | 9,384        |               |  |            | (790     | )           |  | 1984            |  | 06/19/00 |  |  | 40 | 
|187 |  |                         | 1,149   |              |              |  | 6,609     |          |             |  | 7,759        |               |  |            | (432     | )           |  | 1980            |  | 07/02/01 |  |  | 40 | 
|188 |  |                         | 2,391   |              |              |  | 13,797    |          |             |  | 16,187       |               |  |            | (874     | )           |  | 1990            |  | 07/02/01 |  |  | 40 | 
|189 |  |                         | 1,341   |              |              |  | 7,910     |          |             |  | 9,251        |               |  |            | (544     | )           |  | 1992            |  | 07/02/01 |  |  | 40 | 
|190 |  |                         | 936     |              |              |  | 5,445     |          |             |  | 6,381        |               |  |            | (369     | )           |  | 1996            |  | 07/02/01 |  |  | 40 | 
|191 |  |                         | 1,658   |              |              |  | 9,498     |          |             |  | 11,156       |               |  |            | (582     | )           |  | 1998            |  | 07/02/01 |  |  | 40 | 
|192 |  |                         | 2,321   |              |              |  | 13,946    |          |             |  | 16,267       |               |  |            | (950     | )           |  | 1983            |  | 07/02/01 |  |  | 40 | 
|193 |  |                         | 3,653   |              |              |  | 15,340    |          |             |  | 18,994       |               |  |            | (1,016   | )           |  | 1984            |  | 07/02/01 |  |  | 40 | 
|194 |  |                         | 774     |              |              |  | 4,783     |          |             |  | 5,556        |               |  |            | (283     | )           |  | 1976            |  | 07/02/01 |  |  | 40 | 
|195 |  |                         | 1,141   |              |              |  | 7,279     |          |             |  | 8,421        |               |  |            | (497     | )           |  | 1978            |  | 07/02/01 |  |  | 40 | 
|196 |  |                         | 1,226   |              |              |  | 7,239     |          |             |  | 8,465        |               |  |            | (465     | )           |  | 1987            |  | 07/02/01 |  |  | 40 | 
|197 |  |                         | 17,819  |              |              |  | 103,445   |          |             |  | 121,264      |               |  |            | (9,260   | )           |  | 1987            |  | 06/19/00 |  |  | 40 | 
|198 |  |                         | 24,010  |              |              |  | 140,254   |          |             |  | 164,263      |               |  |            | (12,331  | )           |  | 1982/1987       |  | 06/19/00 |  |  | 40 | 
|199 |  |                         | 15,535  |              |              |  | 53,083    |          |             |  | 68,617       |               |  |            | (3,188   | )           |  | 2000            |  | 07/02/01 |  |  | 40 | 
|200 |  |                         | 17,564  |              |              |  | 102,405   |          |             |  | 119,969      |               |  |            | (9,204   | )           |  | 1956            |  | 06/19/00 |  |  | 40 | 
|201 |  |                         | 12,567  |              |              |  | 50,631    |          |             |  | 63,198       |               |  |            | (5,628   | )           |  | 2000            |  | 12/19/97 |  |  | 40 | 
|202 |  |                         | 10,520  |              |              |  | 63,363    |          |             |  | 73,883       |               |  |            | (5,616   | )           |  | 1980            |  | 06/19/00 |  |  | 40 | 
|203 |  |                         | 4,108   |              |              |  | 24,931    |          |             |  | 29,039       |               |  |            | (2,199   | )           |  | 1985            |  | 06/19/00 |  |  | 40 | 
|204 |  |                         | 8,871   |              |              |  | 84,820    |          |             |  | 93,691       |               |  |            | (14,345  | )           |  | 1981            |  | 04/30/97 |  |  | 40 | 



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##### Table of Contents



|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |        |              |         |  |         |              |  |  |     |   |  |  |         | 
|--- |  | ---------------------------- |  | ----- | -------- | - | -------- | ------------- | ------- | ------------ | -- | --------------- | --------- | ----------------- | ------------- | - | -- | ------------ | ------ | ------------ | ------- |  | ------- | ------------ |  |  | --- | - |  |  | ------- | 
|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |  
|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           | Costs Capitalized |              
|    |  |                              |  |       |          |   |          |               |         |              |    | Initial Cost to |           |                   | Subsequent to |  
|    |  |                              |  |       |          |   |          |               |         |              |    | EOP Partnership |           |                   | Acquisition   |  
|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |  
|    |  |                              |  |       |          |   |          |               |         | Encumbrances |    |                 |           |                   | Building and  |   |    |              |        | Building and |        
|    |  | Description                  |  | Notes |          |   | Location |               | State   |              |    | at 12/31/03     |           |                   | Land          |   |    | Improvements |        |              | Land    |  |         | Improvements | 
|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |        |              |         |  |         |              | 
|205 |  | 301 Howard Street            |  |       |          |   |          | San Francisco |         |              | CA |                 |           |                   |              |   |    |              | 6,547  |              |         |  | 58,920  |              |  |  |    |   |  |  | 5,350   | 
|206 |  | 580 California               |  |       | (3)      |   |          | San Francisco |         |              | CA |                 |           |                   | (56,237       | ) |    |              | 7,491  |              |         |  | 67,421  |              |  |  | 8   |   |  |  | 4,196   | 
|207 |  | 60 Spear Street              |  |       | (3)      |   |          | San Francisco |         |              | CA |                 |           |                   |              |   |    |              | 2,125  |              |         |  | 19,126  |              |  |  | 15  |   |  |  | 3,272   | 
|208 |  | Maritime Plaza               |  |       | (3)      |   |          | San Francisco |         |              | CA |                 |           |                   |              |   |    |              | 11,531 |              |         |  | 103,776 |              |  |  |    |   |  |  | 15,599  | 
|209 |  | One Market                   |  |       | (3)      |   |          | San Francisco |         |              | CA |                 |           |                   | (176,828      | ) |    |              | 34,814 |              |         |  | 313,330 |              |  |  |    |   |  |  | 38,285  | 
|210 |  | Ferry Building               |  |       | (6)      |   |          | San Francisco |         |              | CA |                 |           |                   |              |   |    |              |       |              |         |  |        |              |  |  |    |   |  |  | 104,245 | 
|211 |  | Foundry Square II            |  |       | (6)      |   |          | San Francisco |         |              | CA |                 |           |                   |              |   |    |              | 14,391 |              |         |  |        |              |  |  |    |   |  |  | 128,538 | 
|212 |  | Peninsula Office Park        |  |       |          |   |          | San Mateo     |         |              | CA |                 |           |                   | (79,453       | ) |    |              | 27,275 |              |         |  | 154,561 |              |  |  |    |   |  |  |        | 
|213 |  | San Mateo BayCenter I        |  |       |          |   |          | San Mateo     |         |              | CA |                 |           |                   |              |   |    |              | 5,382  |              |         |  | 30,498  |              |  |  |    |   |  |  | 799     | 
|214 |  | San Mateo BayCenter II       |  |       |          |   |          | San Mateo     |         |              | CA |                 |           |                   | (10,098       | ) |    |              | 6,245  |              |         |  | 35,389  |              |  |  |    |   |  |  | 1,233   | 
|215 |  | San Mateo BayCenter III      |  |       |          |   |          | San Mateo     |         |              | CA |                 |           |                   |              |   |    |              | 3,357  |              |         |  | 19,023  |              |  |  |    |   |  |  | 291     | 
|216 |  | San Rafael Corporate Center  |  |       |          |   |          | San Rafael    |         |              | CA |                 |           |                   |              |   |    |              | 18,002 |              |         |  |        |              |  |  |    |   |  |  | 28,953  | 
|217 |  | Norris Tech Center           |  |       |          |   |          | San Ramon     |         |              | CA |                 |           |                   |              |   |    |              | 5,700  |              |         |  | 32,300  |              |  |  |    |   |  |  | 1,899   | 
|218 |  | One & Two ADP Plaza          |  |       |          |   |          | San Ramon     |         |              | CA |                 |           |                   |              |   |    |              | 7,460  |              |         |  | 42,273  |              |  |  |    |   |  |  | 4,083   | 
|219 |  | Fountaingrove Center         |  |       |          |   |          | Santa Rosa    |         |              | CA |                 |           |                   |              |   |    |              | 2,898  |              |         |  | 16,424  |              |  |  |    |   |  |  | 1,722   | 
|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |        |              |         |  |         |              | 
|    |  | San Francisco Region Totals  |  |       | (484,235 | ) |          |               | 539,865 |              |    |                 | 3,010,049 |                   |               |   | 23 |              |        |              | 432,305 | 
|    |  |                              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |   
|    |  | San Jose Region              |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    |              |        |              |         |  |         |              |  |  |     |   |  |  |         | 
|220 |  | Pruneyard Office Towers      |  |       |          |   |          | Campbell      |         |              | CA |                 |           |                   |              |   |    |              | 16,502 |              |         |  | 154,783 |              |  |  |    |   |  |  | 5,174   | 
|221 |  | Cupertino Business Center    |  |       |          |   |          | Cupertino     |         |              | CA |                 |           |                   |              |   |    |              | 2,910  |              |         |  | 16,490  |              |  |  | (28 | ) |  |  | 1,799   | 
|222 |  | 1900 McCarthy                |  |       |          |   |          | Milpitas      |         |              | CA |                 |           |                   |              |   |    |              | 1,998  |              |         |  | 11,319  |              |  |  |    |   |  |  | 416     | 
|223 |  | California Circle II         |  |       |          |   |          | Milpitas      |         |              | CA |                 |           |                   |              |   |    |              | 1,764  |              |         |  | 9,997   |              |  |  |    |   |  |  | 454     | 
|224 |  | Oak Creek I & II             |  |       |          |   |          | Milpitas      |         |              | CA |                 |           |                   |              |   |    |              | 1,309  |              |         |  | 7,417   |              |  |  |    |   |  |  |        | 
|225 |  | Shoreline Technology Park    |  |       |          |   |          | Mountain View |         |              | CA |                 |           |                   |              |   |    |              | 31,575 |              |         |  | 190,894 |              |  |  | 69  |   |  |  | 11,554  | 
|226 |  | Meier Mountain View          |  |       |          |   |          | Mountain View |         |              | CA |                 |           |                   |              |   |    |              | 13,950 |              |         |  | 79,050  |              |  |  |    |   |  |  | 795     | 
|227 |  | Ravendale at Central         |  |       |          |   |          | Mountain View |         |              | CA |                 |           |                   |              |   |    |              | 2,550  |              |         |  | 14,450  |              |  |  |    |   |  |  | 83      | 
|228 |  | 2180 Sand Hill Road          |  |       |          |   |          | Menlo Park    |         |              | CA |                 |           |                   |              |   |    |              | 3,408  |              |         |  | 19,314  |              |  |  |    |   |  |  | 1,506   | 
|229 |  | Embarcadero Place            |  |       |          |   |          | Palo Alto     |         |              | CA |                 |           |                   | (34,400       | ) |    |              | 10,500 |              |         |  | 59,500  |              |  |  |    |   |  |  | 733     | 
|230 |  | Palo Alto Square             |  |       |          |   |          | Palo Alto     |         |              | CA |                 |           |                   |              |   |    |              |       |              |         |  | 78,143  |              |  |  | 161 |   |  |  | 2,351   | 
|231 |  | Xerox Campus                 |  |       |          |   |          | Palo Alto     |         |              | CA |                 |           |                   |              |   |    |              |       |              |         |  | 132,810 |              |  |  |    |   |  |  |        | 
|232 |  | Foothill Research Center     |  |       |          |   |          | Palo Alto     |         |              | CA |                 |           |                   |              |   |    |              |       |              |         |  | 104,894 |              |  |  |    |   |  |  |        | 
|233 |  | Lockheed                     |  |       |          |   |          | Palo Alto     |         |              | CA |                 |           |                   |              |   |    |              |       |              |         |  | 27,712  |              |  |  |    |   |  |  | 70      | 
|234 |  | 10 Almaden                   |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 12,583 |              |         |  | 71,303  |              |  |  |    |   |  |  | 524     | 
|235 |  | 1740 Technology              |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   | (17,118       | ) |    |              | 8,766  |              |         |  | 49,673  |              |  |  |    |   |  |  | 1,125   | 
|236 |  | 2290 North First Street      |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 2,431  |              |         |  | 13,776  |              |  |  |    |   |  |  | 707     | 
|237 |  | Aspect Telecommunications    |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 2,925  |              |         |  | 16,575  |              |  |  |    |   |  |  |        | 
|238 |  | Central Park Plaza           |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 11,181 |              |         |  | 63,358  |              |  |  | 23  |   |  |  | 2,012   | 
|239 |  | Metro Plaza                  |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 18,029 |              |         |  | 102,164 |              |  |  |    |   |  |  | 2,021   | 
|240 |  | Ridder Park                  |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 2,012  |              |         |  | 11,402  |              |  |  |    |   |  |  |        | 
|241 |  | Skyport East and West        |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 6,779  |              |         |  | 87,193  |              |  |  |    |   |  |  | 25,538  | 
|242 |  | Concourse                    |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 49,279 |              |         |  | 279,248 |              |  |  | (51 | ) |  |  | 2,837   | 
|243 |  | Creekside                    |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 9,631  |              |         |  | 54,576  |              |  |  |    |   |  |  | 311     | 
|244 |  | San Jose Gateway Office II   |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 16,286 |              |         |  | 92,288  |              |  |  |    |   |  |  | 1,545   | 
|245 |  | San Jose Gateway Office III  |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 6,409  |              |         |  | 36,315  |              |  |  |    |   |  |  | 99      | 
|246 |  | North First Office Center    |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 6,395  |              |         |  | 36,239  |              |  |  |    |   |  |  | 68      | 
|247 |  | San Jose Gateway             |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 7,873  |              |         |  | 44,616  |              |  |  |    |   |  |  | 2,983   | 
|248 |  | 225 West Santa Clara Street  |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 8,600  |              |         |  | 78,891  |              |  |  |    |   |  |  |        | 
|249 |  | 1871 The Alameda             |  |       |          |   |          | San Jose      |         |              | CA |                 |           |                   |              |   |    |              | 1,129  |              |         |  | 6,399   |              |  |  |    |   |  |  | 255     | 
|250 |  | 2727 Augustine               |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 3,000  |              |         |  | 17,000  |              |  |  |    |   |  |  |        | 
|251 |  | 3001 Stender Way             |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 2,263  |              |         |  | 12,823  |              |  |  |    |   |  |  |        | 
|252 |  | 3045 Stender Way             |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 1,050  |              |         |  | 5,950   |              |  |  |    |   |  |  |        | 
|253 |  | 3281-3285 Scott Boulevard    |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 1,275  |              |         |  | 7,225   |              |  |  |    |   |  |  | 611     | 
|254 |  | Applied Materials I & II     |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 5,100  |              |         |  | 28,900  |              |  |  |    |   |  |  |        | 
|255 |  | Meier Central North          |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 2,880  |              |         |  | 16,320  |              |  |  |    |   |  |  | 25      | 
|256 |  | Meier Central South          |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 5,265  |              |         |  | 29,835  |              |  |  |    |   |  |  | 356     | 
|257 |  | Patrick Henry Drive          |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 2,475  |              |         |  | 14,025  |              |  |  |    |   |  |  | 4       | 
|258 |  | Santa Clara Office Center I  |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 2,010  |              |         |  | 11,391  |              |  |  |    |   |  |  | 230     | 
|259 |  | Santa Clara Office Center II |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |    |              | 2,870  |              |         |  | 16,261  |              |  |  |    |   |  |  | 216     | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |           |  |          |  |  |    | 
|--- |  | ----------------------- | ------- | ------------ | ------------ |  | --------- | -------- | ----------- |  | ------------ | ------------- |  | ---------- | -------- | ----------- |  | --------- |  | -------- |  |  | -- | 
|    |  |                         |         |              |              |  |           |          |             |  |              |              
|    |  | Gross Amount Carried at |         |              |              |  |           |          |             |  |              |               | 
|    |  | Close of Period         |         |              |              |  |           |          |             |  |              |               | 
|    |  | 12/31/2003              |         |              |              |  |           |          |             |  |              |               | 
|    |  |                         |         |              |              |  |           |          | Date of     |  |              |               | 
|    |  |                         |         | Building and |              |  |           |          | Accumulated |  |              | Construction/ |  | Date       |          | Depreciable | 
|    |  | Land                    |         |              | Improvements |  |           | Total(1) |             |  | Depreciation |               |  | Renovation |          | Acquired    |  | Lives(2)  | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |           | 
|205 |  |                         | 6,547   |              |              |  | 64,270    |          |             |  | 70,817       |               |  |            | (10,512  | )           |  | 1988      |  | 04/29/98 |  |  | 40 | 
|206 |  |                         | 7,500   |              |              |  | 71,617    |          |             |  | 79,117       |               |  |            | (13,365  | )           |  | 1984      |  | 12/21/95 |  |  | 40 | 
|207 |  |                         | 2,140   |              |              |  | 22,398    |          |             |  | 24,538       |               |  |            | (3,655   | )           |  | 1967/1987 |  | 09/29/87 |  |  | 40 | 
|208 |  |                         | 11,531  |              |              |  | 119,375   |          |             |  | 130,906      |               |  |            | (20,490  | )           |  | 1967/1990 |  | 04/21/97 |  |  | 40 | 
|209 |  |                         | 34,814  |              |              |  | 351,615   |          |             |  | 386,429      |               |  |            | (66,954  | )           |  | 1976/1995 |  | 11/22/94 |  |  | 40 | 
|210 |  |                         |        |              |              |  | 104,245   |          |             |  | 104,245      |               |  |            |         |             |  | 1898/2002 |  | 06/19/00 |  |  | 40 | 
|211 |  |                         | 14,391  |              |              |  | 128,538   |          |             |  | 142,929      |               |  |            | (2,176   | )           |  | 2002      |  | 06/19/00 |  |  | 40 | 
|212 |  |                         | 2,798   |              |              |  | 157,359   |          |             |  | 184,635      |               |  |            | (14,142  | )           |  | 1971/1998 |  | 06/19/00 |  |  | 40 | 
|213 |  |                         | 5,382   |              |              |  | 31,298    |          |             |  | 36,680       |               |  |            | (2,004   | )           |  | 1984      |  | 07/02/01 |  |  | 40 | 
|214 |  |                         | 6,245   |              |              |  | 36,622    |          |             |  | 42,867       |               |  |            | (2,230   | )           |  | 1984      |  | 07/02/01 |  |  | 40 | 
|215 |  |                         | 3,357   |              |              |  | 19,315    |          |             |  | 22,672       |               |  |            | (1,199   | )           |  | 1987      |  | 07/02/01 |  |  | 40 | 
|216 |  |                         | 18,002  |              |              |  | 28,953    |          |             |  | 46,955       |               |  |            | (785     | )           |  | 2002      |  | 07/02/01 |  |  | 40 | 
|217 |  |                         | 5,700   |              |              |  | 34,199    |          |             |  | 39,899       |               |  |            | (3,391   | )           |  | 1984/1990 |  | 06/19/00 |  |  | 40 | 
|218 |  |                         | 7,460   |              |              |  | 46,355    |          |             |  | 53,815       |               |  |            | (4,110   | )           |  | 1987-1989 |  | 06/19/00 |  |  | 40 | 
|219 |  |                         | 2,898   |              |              |  | 18,146    |          |             |  | 21,045       |               |  |            | (1,097   | )           |  | 1986/1991 |  | 07/02/01 |  |  | 40 | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |           | 
|    |  |                         | 539,887 |              |              |  | 3,442,353 |          |             |  | 3,982,241    |               |  |            | (316,708 | )           |  |           |  |          |  |  |    | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |           | 
|220 |  |                         | 16,502  |              |              |  | 159,958   |          |             |  | 176,460      |               |  |            | (14,452  | )           |  | 1971/1999 |  | 06/19/00 |  |  | 40 | 
|221 |  |                         | 2,882   |              |              |  | 18,289    |          |             |  | 21,171       |               |  |            | (1,017   | )           |  | 1974-1975 |  | 07/02/01 |  |  | 40 | 
|222 |  |                         | 1,998   |              |              |  | 11,735    |          |             |  | 13,732       |               |  |            | (757     | )           |  | 1984      |  | 07/02/01 |  |  | 40 | 
|223 |  |                         | 1,764   |              |              |  | 10,451    |          |             |  | 12,215       |               |  |            | (697     | )           |  | 1984      |  | 07/02/01 |  |  | 40 | 
|224 |  |                         | 1,309   |              |              |  | 7,417     |          |             |  | 8,726        |               |  |            | (456     | )           |  | 1982      |  | 07/02/01 |  |  | 40 | 
|225 |  |                         | 31,644  |              |              |  | 202,449   |          |             |  | 234,093      |               |  |            | (28,703  | )           |  | 1985/1991 |  | 12/19/97 |  |  | 40 | 
|226 |  |                         | 13,950  |              |              |  | 79,845    |          |             |  | 93,795       |               |  |            | (4,860   | )           |  | 1972/1980 |  | 07/02/01 |  |  | 40 | 
|227 |  |                         | 2,550   |              |              |  | 14,533    |          |             |  | 17,083       |               |  |            | (888     | )           |  | 1980      |  | 07/02/01 |  |  | 40 | 
|228 |  |                         | 3,408   |              |              |  | 20,819    |          |             |  | 24,228       |               |  |            | (1,303   | )           |  | 1976      |  | 07/02/01 |  |  | 40 | 
|229 |  |                         | 10,500  |              |              |  | 60,233    |          |             |  | 70,733       |               |  |            | (5,293   | )           |  | 1984      |  | 06/19/00 |  |  | 40 | 
|230 |  |                         | 161     |              |              |  | 80,494    |          |             |  | 80,655       |               |  |            | (12,763  | )           |  | 1971/1985 |  | 10/01/99 |  |  | 23 | 
|231 |  |                         |        |              |              |  | 132,810   |          |             |  | 132,810      |               |  |            | (8,372   | )           |  | 1991      |  | 07/02/01 |  |  | 40 | 
|232 |  |                         |        |              |              |  | 104,894   |          |             |  | 104,894      |               |  |            | (6,786   | )           |  | 1991      |  | 07/02/01 |  |  | 40 | 
|233 |  |                         |        |              |              |  | 27,782    |          |             |  | 27,782       |               |  |            | (1,753   | )           |  | 1991      |  | 07/02/01 |  |  | 40 | 
|234 |  |                         | 12,583  |              |              |  | 71,826    |          |             |  | 84,409       |               |  |            | (6,418   | )           |  | 1989      |  | 06/19/00 |  |  | 40 | 
|235 |  |                         | 8,766   |              |              |  | 50,799    |          |             |  | 59,565       |               |  |            | (3,270   | )           |  | 1986/1994 |  | 07/02/01 |  |  | 40 | 
|236 |  |                         | 2,431   |              |              |  | 14,483    |          |             |  | 16,914       |               |  |            | (943     | )           |  | 1984      |  | 07/02/01 |  |  | 40 | 
|237 |  |                         | 2,925   |              |              |  | 16,575    |          |             |  | 19,500       |               |  |            | (1,019   | )           |  | 1989      |  | 07/02/01 |  |  | 40 | 
|238 |  |                         | 11,204  |              |              |  | 65,370    |          |             |  | 76,574       |               |  |            | (4,389   | )           |  | 1984-1985 |  | 07/02/01 |  |  | 40 | 
|239 |  |                         | 18,029  |              |              |  | 104,185   |          |             |  | 122,214      |               |  |            | (6,431   | )           |  | 1986-1987 |  | 07/02/01 |  |  | 40 | 
|240 |  |                         | 2,012   |              |              |  | 11,402    |          |             |  | 13,415       |               |  |            | (701     | )           |  | 1966      |  | 07/02/01 |  |  | 40 | 
|241 |  |                         | 6,779   |              |              |  | 112,732   |          |             |  | 119,511      |               |  |            | (8,528   | )           |  | 2001      |  | 07/02/01 |  |  | 40 | 
|242 |  |                         | 49,229  |              |              |  | 282,086   |          |             |  | 331,314      |               |  |            | (17,740  | )           |  | 1980/2000 |  | 07/02/01 |  |  | 40 | 
|243 |  |                         | 9,631   |              |              |  | 54,888    |          |             |  | 64,519       |               |  |            | (3,438   | )           |  | 1986      |  | 07/02/01 |  |  | 40 | 
|244 |  |                         | 16,286  |              |              |  | 93,833    |          |             |  | 110,119      |               |  |            | (5,816   | )           |  | 1983-1984 |  | 07/02/01 |  |  | 40 | 
|245 |  |                         | 6,409   |              |              |  | 36,414    |          |             |  | 42,823       |               |  |            | (2,245   | )           |  | 1998      |  | 07/02/01 |  |  | 40 | 
|246 |  |                         | 6,395   |              |              |  | 36,307    |          |             |  | 42,702       |               |  |            | (2,237   | )           |  | 1985-1986 |  | 07/02/01 |  |  | 40 | 
|247 |  |                         | 7,873   |              |              |  | 47,599    |          |             |  | 55,472       |               |  |            | (2,972   | )           |  | 1981      |  | 07/02/01 |  |  | 40 | 
|248 |  |                         | 8,600   |              |              |  | 78,891    |          |             |  | 87,491       |               |  |            | (112     | )           |  | 2001      |  | 12/31/03 |  |  | 35 | 
|249 |  |                         | 1,129   |              |              |  | 6,654     |          |             |  | 7,784        |               |  |            | (407     | )           |  | 1972      |  | 07/02/01 |  |  | 40 | 
|250 |  |                         | 3,000   |              |              |  | 17,000    |          |             |  | 20,000       |               |  |            | (1,045   | )           |  | 1975      |  | 07/02/01 |  |  | 40 | 
|251 |  |                         | 2,263   |              |              |  | 12,823    |          |             |  | 15,086       |               |  |            | (788     | )           |  | 1978      |  | 07/02/01 |  |  | 40 | 
|252 |  |                         | 1,050   |              |              |  | 5,950     |          |             |  | 7,000        |               |  |            | (366     | )           |  | 1975      |  | 07/02/01 |  |  | 40 | 
|253 |  |                         | 1,275   |              |              |  | 7,836     |          |             |  | 9,111        |               |  |            | (445     | )           |  | 1981      |  | 07/02/01 |  |  | 40 | 
|254 |  |                         | 5,100   |              |              |  | 28,900    |          |             |  | 34,000       |               |  |            | (1,776   | )           |  | 1979      |  | 07/02/01 |  |  | 40 | 
|255 |  |                         | 2,880   |              |              |  | 16,345    |          |             |  | 19,225       |               |  |            | (1,003   | )           |  | 1972/1980 |  | 07/02/01 |  |  | 40 | 
|256 |  |                         | 5,265   |              |              |  | 30,191    |          |             |  | 35,456       |               |  |            | (2,012   | )           |  | 1972/1980 |  | 07/02/01 |  |  | 40 | 
|257 |  |                         | 2,475   |              |              |  | 14,029    |          |             |  | 16,504       |               |  |            | (862     | )           |  | 1981      |  | 07/02/01 |  |  | 40 | 
|258 |  |                         | 2,010   |              |              |  | 11,621    |          |             |  | 13,632       |               |  |            | (731     | )           |  | 1981      |  | 07/02/01 |  |  | 40 | 
|259 |  |                         | 2,870   |              |              |  | 16,477    |          |             |  | 19,347       |               |  |            | (1,036   | )           |  | 1978      |  | 07/02/01 |  |  | 40 | 



---



##### Table of Contents



|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |   |  |  |        | 
|--- |  | --------------------------------- |  | ----- | -------- | - | -------- | ------------- | ------- | ------------ | -- | --------------- | --------- | ----------------- | ------------- | - | --- | ------------ | ------ | ------------ | ------- |  | ------- | ------------ |  |  | --- | - |  |  | ------ | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |  
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           | Costs Capitalized |              
|    |  |                                   |  |       |          |   |          |               |         |              |    | Initial Cost to |           |                   | Subsequent to |  
|    |  |                                   |  |       |          |   |          |               |         |              |    | EOP Partnership |           |                   | Acquisition   |  
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |  
|    |  |                                   |  |       |          |   |          |               |         | Encumbrances |    |                 |           |                   | Building and  |   |     |              |        | Building and |        
|    |  | Description                       |  | Notes |          |   | Location |               | State   |              |    | at 12/31/03     |           |                   | Land          |   |     | Improvements |        |              | Land    |  |         | Improvements | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|260 |  | Santa Clara Office Center III     |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |     |              | 2,031  |              |         |  | 11,509  |              |  |  |    |   |  |  | 356    | 
|261 |  | Santa Clara Office Center IV      |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |     |              | 186    |              |         |  | 1,057   |              |  |  |    |   |  |  |       | 
|262 |  | Lake Marriott Business Park       |  |       |          |   |          | Santa Clara   |         |              | CA |                 |           |                   |              |   |     |              | 9,091  |              |         |  | 84,967  |              |  |  | 297 |   |  |  | 2,757  | 
|263 |  | Sunnyvale Business Center         |  |       |          |   |          | Sunnyvale     |         |              | CA |                 |           |                   |              |   |     |              | 4,890  |              |         |  | 44,010  |              |  |  |    |   |  |  | 44     | 
|264 |  | Borregas Avenue                   |  |       |          |   |          | Sunnyvale     |         |              | CA |                 |           |                   |              |   |     |              | 1,095  |              |         |  | 6,205   |              |  |  |    |   |  |  | 228    | 
|265 |  | Meier Sunnyvale                   |  |       |          |   |          | Sunnyvale     |         |              | CA |                 |           |                   |              |   |     |              | 495    |              |         |  | 2,805   |              |  |  |    |   |  |  |       | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|    |  | San Jose Region Totals            |  |       | (51,518  | ) |          |               | 302,751 |              |    |                 | 2,261,075 |                   |               |   | 472 |              |        |              | 69,788  | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    
|    |  | Seattle Region                    |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |   |  |  |        | 
|266 |  | 10700 Building                    |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              |       |              |         |  | 15,958  |              |  |  |    |   |  |  | 92     | 
|267 |  | 110 Atrium Place                  |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   | (19,868       | ) |     |              | 6,333  |              |         |  | 35,888  |              |  |  |    |   |  |  | 2,594  | 
|268 |  | Bellefield Office Park            |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 12,232 |              |         |  | 69,312  |              |  |  | (1  | ) |  |  | 2,140  | 
|269 |  | Bellevue Gateway I                |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 3,593  |              |         |  | 20,360  |              |  |  |    |   |  |  | 1,556  | 
|270 |  | Bellevue Gateway II               |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 2,016  |              |         |  | 11,423  |              |  |  |    |   |  |  | 494    | 
|271 |  | Eastgate Office Park              |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 6,468  |              |         |  | 36,650  |              |  |  | 3   |   |  |  | 2,652  | 
|272 |  | Gateway 405 Building              |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 1,011  |              |         |  | 5,727   |              |  |  |    |   |  |  | 273    | 
|273 |  | I-90 Bellevue                     |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 3,725  |              |         |  | 21,108  |              |  |  |    |   |  |  | 237    | 
|274 |  | Lincoln Executive Center          |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 3,235  |              |         |  | 18,329  |              |  |  |    |   |  |  | 1,243  | 
|275 |  | Lincoln Executive Center II & III |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 4,918  |              |         |  | 27,868  |              |  |  |    |   |  |  | 273    | 
|276 |  | Main Street Building              |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 1,398  |              |         |  | 7,922   |              |  |  |    |   |  |  | 311    | 
|277 |  | Plaza Center                      |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 16,680 |              |         |  | 94,521  |              |  |  |    |   |  |  | 1,066  | 
|278 |  | Plaza East                        |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 4,687  |              |         |  | 26,561  |              |  |  |    |   |  |  | 877    | 
|279 |  | Sunset North Corporate Campus     |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 17,031 |              |         |  | 79,249  |              |  |  |    |   |  |  | 12,869 | 
|280 |  | City Center Bellevue              |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              | 10,349 |              |         |  | 93,142  |              |  |  |    |   |  |  | 8,651  | 
|281 |  | One Bellevue Center               |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              |       |              |         |  | 56,223  |              |  |  |    |   |  |  | 2,737  | 
|282 |  | Rainier Plaza                     |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              |       |              |         |  | 79,928  |              |  |  |    |   |  |  | 4,447  | 
|283 |  | Key Center                        |  |       |          |   |          | Bellevue      |         |              | WA |                 |           |                   |              |   |     |              |       |              |         |  | 78,447  |              |  |  |    |   |  |  | 6,410  | 
|284 |  | 4000 Kruse Way Place              |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              | 4,475  |              |         |  | 25,360  |              |  |  |    |   |  |  | 1,619  | 
|285 |  | 4004 Kruse Way Place              |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              | 1,888  |              |         |  | 10,698  |              |  |  |    |   |  |  | 463    | 
|286 |  | 4800 Meadows                      |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              |       |              |         |  | 17,448  |              |  |  |    |   |  |  | 432    | 
|287 |  | 4900-5000 Meadows                 |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              |       |              |         |  | 30,528  |              |  |  |    |   |  |  | 1,181  | 
|288 |  | 4949 Meadows                      |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              |       |              |         |  | 26,941  |              |  |  |    |   |  |  | 1,086  | 
|289 |  | Kruse Oaks I                      |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              |       |              |         |  | 14,648  |              |  |  |    |   |  |  | 4,091  | 
|290 |  | Kruse Way Plaza I, II             |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              | 2,866  |              |         |  | 16,239  |              |  |  |    |   |  |  | 1,060  | 
|291 |  | Kruse Woods                       |  |       |          |   |          | Lake Oswego   |         |              | OR |                 |           |                   |              |   |     |              | 10,812 |              |         |  | 80,977  |              |  |  |    |   |  |  | 2,664  | 
|292 |  | Island Corporate Center           |  |       |          |   |          | Mercer Island |         |              | WA |                 |           |                   | (12,330       | ) |     |              | 2,700  |              |         |  | 15,300  |              |  |  |    |   |  |  | 955    | 
|293 |  | 5550 Macadam Building             |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 870    |              |         |  | 4,929   |              |  |  |    |   |  |  | 423    | 
|294 |  | Benjamin Franklin Plaza           |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 7,505  |              |         |  | 42,529  |              |  |  |    |   |  |  | 2,230  | 
|295 |  | Lincoln Center                    |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 18,760 |              |         |  | 106,307 |              |  |  |    |   |  |  | 6,372  | 
|296 |  | One Pacific Square                |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 4,451  |              |         |  | 25,221  |              |  |  |    |   |  |  | 1,254  | 
|297 |  | River Forum I & II                |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 4,038  |              |         |  | 22,881  |              |  |  |    |   |  |  | 3,140  | 
|298 |  | RiverSide Centre (Oregon)         |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 2,537  |              |         |  | 12,353  |              |  |  |    |   |  |  | 587    | 
|299 |  | Congress Center                   |  |       |          |   |          | Portland      |         |              | OR |                 |           |                   |              |   |     |              | 5,383  |              |         |  | 48,634  |              |  |  |    |   |  |  | 7,964  | 
|300 |  | Southgate Office Plaza I & II     |  |       |          |   |          | Renton        |         |              | WA |                 |           |                   |              |   |     |              | 4,794  |              |         |  | 27,163  |              |  |  |    |   |  |  | 3,779  | 
|301 |  | Washington Mutual Tower           |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   | (78,756       | ) |     |              | 51,000 |              |         |  | 289,000 |              |  |  |    |   |  |  | 741    | 
|302 |  | 1111 Third Avenue                 |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   |              |   |     |              | 9,900  |              |         |  | 89,571  |              |  |  |    |   |  |  | 3,733  | 
|303 |  | 10833-10845 NE 8th Street         |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   |              |   |     |              |       |              |         |  | 2,000   |              |  |  |    |   |  |  | 28     | 
|304 |  | Nordstrom Medical Tower           |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   |              |   |     |              | 1,700  |              |         |  | 15,450  |              |  |  |    |   |  |  | 565    | 
|305 |  | Second and Seneca                 |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   |              |   |     |              | 10,922 |              |         |  | 98,927  |              |  |  |    |   |  |  | 2,632  | 
|306 |  | Second and Spring Building        |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   |              |   |     |              | 1,968  |              |         |  | 17,716  |              |  |  |    |   |  |  | 2,848  | 
|307 |  | Wells Fargo Center                |  |       |          |   |          | Seattle       |         |              | WA |                 |           |                   |              |   |     |              | 21,361 |              |         |  | 193,529 |              |  |  |    |   |  |  | 10,384 | 
|308 |  | Nimbus Corporate Center           |  |       |          |   |          | Tigard        |         |              | OR |                 |           |                   |              |   |     |              | 12,934 |              |         |  | 73,291  |              |  |  |    |   |  |  | 7,281  | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              | 
|    |  | Seattle Region Totals             |  |       | (110,954 | ) |          |               | 274,539 |              |    |                 | 2,086,257 |                   |               |   | 2   |              |        |              | 116,433 | 
|    |  |                                   |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |    
|    |  | Washington D.C. Region            |  |       |          |   |          |               |         |              |    |                 |           |                   |               |   |     |              |        |              |         |  |         |              |  |  |     |   |  |  |        | 
|309 |  | Polk and Taylor Buildings         |  |       |          |   |          | Arlington     |         |              | VA |                 |           |                   |              |   |     |              | 16,943 |              |         |  | 152,483 |              |  |  |    |   |  |  | 23,753 | 
|310 |  | Four and Five Valley Square       |  |       |          |   |          | Blue Bell     |         |              | PA |                 |           |                   |              |   |     |              | 866    |              |         |  | 7,793   |              |  |  | (1  | ) |  |  | 1,735  | 
|311 |  | One Valley Square                 |  |       |          |   |          | Blue Bell     |         |              | PA |                 |           |                   |              |   |     |              | 717    |              |         |  | 6,457   |              |  |  |    |   |  |  | 1,308  | 
|312 |  | Three Valley Square               |  |       |          |   |          | Blue Bell     |         |              | PA |                 |           |                   |              |   |     |              | 1,012  |              |         |  | 9,111   |              |  |  |    |   |  |  | 1,423  | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                     |  |          |  |  |    | 
|--- |  | ----------------------- | ------- | ------------ | ------------ |  | --------- | -------- | ----------- |  | ------------ | ------------- |  | ---------- | -------- | ----------- |  | ------------------- |  | -------- |  |  | -- | 
|    |  |                         |         |              |              |  |           |          |             |  |              |              
|    |  | Gross Amount Carried at |         |              |              |  |           |          |             |  |              |               | 
|    |  | Close of Period         |         |              |              |  |           |          |             |  |              |               | 
|    |  | 12/31/2003              |         |              |              |  |           |          |             |  |              |               | 
|    |  |                         |         |              |              |  |           |          | Date of     |  |              |               | 
|    |  |                         |         | Building and |              |  |           |          | Accumulated |  |              | Construction/ |  | Date       |          | Depreciable | 
|    |  | Land                    |         |              | Improvements |  |           | Total(1) |             |  | Depreciation |               |  | Renovation |          | Acquired    |  | Lives(2)            | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                     | 
|260 |  |                         | 2,031   |              |              |  | 11,865    |          |             |  | 13,896       |               |  |            | (734     | )           |  | 1980                |  | 07/02/01 |  |  | 40 | 
|261 |  |                         | 186     |              |              |  | 1,057     |          |             |  | 1,243        |               |  |            | (65      | )           |  | 1979                |  | 07/02/01 |  |  | 40 | 
|262 |  |                         | 9,388   |              |              |  | 87,724    |          |             |  | 97,112       |               |  |            | (13,782  | )           |  | 1981                |  | 12/19/97 |  |  | 40 | 
|263 |  |                         | 4,890   |              |              |  | 44,054    |          |             |  | 48,944       |               |  |            | (6,652   | )           |  | 1990                |  | 12/19/97 |  |  | 40 | 
|264 |  |                         | 1,095   |              |              |  | 6,433     |          |             |  | 7,528        |               |  |            | (381     | )           |  | 1978                |  | 07/02/01 |  |  | 40 | 
|265 |  |                         | 495     |              |              |  | 2,805     |          |             |  | 3,300        |               |  |            | (172     | )           |  | 1979                |  | 07/02/01 |  |  | 40 | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                     | 
|    |  |                         | 303,223 |              |              |  | 2,330,863 |          |             |  | 2,634,086    |               |  |            | (186,617 | )           |  |                     |  |          |  |  |    | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                     | 
|266 |  |                         |        |              |              |  | 16,050    |          |             |  | 16,050       |               |  |            | (985     | )           |  | 1981                |  | 07/02/01 |  |  | 40 | 
|267 |  |                         | 6,333   |              |              |  | 38,483    |          |             |  | 44,816       |               |  |            | (3,505   | )           |  | 1981                |  | 06/19/00 |  |  | 40 | 
|268 |  |                         | 12,231  |              |              |  | 71,452    |          |             |  | 83,682       |               |  |            | (4,652   | )           |  | 1980                |  | 07/02/01 |  |  | 40 | 
|269 |  |                         | 3,593   |              |              |  | 21,916    |          |             |  | 25,509       |               |  |            | (1,581   | )           |  | 1985                |  | 07/02/01 |  |  | 40 | 
|270 |  |                         | 2,016   |              |              |  | 11,917    |          |             |  | 13,933       |               |  |            | (791     | )           |  | 1988                |  | 07/02/01 |  |  | 40 | 
|271 |  |                         | 6,471   |              |              |  | 39,302    |          |             |  | 45,772       |               |  |            | (2,505   | )           |  | 1985                |  | 07/02/01 |  |  | 40 | 
|272 |  |                         | 1,011   |              |              |  | 6,000     |          |             |  | 7,011        |               |  |            | (376     | )           |  | 1986                |  | 07/02/01 |  |  | 40 | 
|273 |  |                         | 3,725   |              |              |  | 21,346    |          |             |  | 25,071       |               |  |            | (1,305   | )           |  | 1986                |  | 07/02/01 |  |  | 40 | 
|274 |  |                         | 3,235   |              |              |  | 19,572    |          |             |  | 22,807       |               |  |            | (1,303   | )           |  | 1983-1985           |  | 07/02/01 |  |  | 40 | 
|275 |  |                         | 4,918   |              |              |  | 28,141    |          |             |  | 33,059       |               |  |            | (1,783   | )           |  | 1983-1985           |  | 07/02/01 |  |  | 40 | 
|276 |  |                         | 1,398   |              |              |  | 8,233     |          |             |  | 9,631        |               |  |            | (522     | )           |  | 1980                |  | 07/02/01 |  |  | 40 | 
|277 |  |                         | 16,680  |              |              |  | 95,587    |          |             |  | 112,267      |               |  |            | (5,970   | )           |  | 1978/1983           |  | 07/02/01 |  |  | 40 | 
|278 |  |                         | 4,687   |              |              |  | 27,438    |          |             |  | 32,125       |               |  |            | (1,770   | )           |  | 1988                |  | 07/02/01 |  |  | 40 | 
|279 |  |                         | 17,031  |              |              |  | 92,118    |          |             |  | 109,149      |               |  |            | (11,741  | )           |  | 1999                |  | 06/30/00 |  |  | 40 | 
|280 |  |                         | 10,349  |              |              |  | 101,793   |          |             |  | 112,142      |               |  |            | (12,825  | )           |  | 1987                |  | 01/28/99 |  |  | 40 | 
|281 |  |                         |        |              |              |  | 58,960    |          |             |  | 58,960       |               |  |            | (9,564   | )           |  | 1983                |  | 12/17/97 |  |  | 40 | 
|282 |  |                         |        |              |              |  | 84,375    |          |             |  | 84,375       |               |  |            | (12,941  | )           |  | 1986                |  | 12/17/97 |  |  | 40 | 
|283 |  |                         |        |              |              |  | 84,857    |          |             |  | 84,857       |               |  |            | (1,352   | )           |  | 2000                |  | 06/19/00 |  |  | 40 | 
|284 |  |                         | 4,475   |              |              |  | 26,979    |          |             |  | 31,454       |               |  |            | (1,913   | )           |  | 1981/1986           |  | 07/02/01 |  |  | 40 | 
|285 |  |                         | 1,888   |              |              |  | 11,162    |          |             |  | 13,049       |               |  |            | (820     | )           |  | 1996                |  | 07/02/01 |  |  | 40 | 
|286 |  |                         |        |              |              |  | 17,880    |          |             |  | 17,880       |               |  |            | (1,110   | )           |  | 1998                |  | 07/02/01 |  |  | 40 | 
|287 |  |                         |        |              |              |  | 31,710    |          |             |  | 31,710       |               |  |            | (2,129   | )           |  | 1990                |  | 07/02/01 |  |  | 40 | 
|288 |  |                         |        |              |              |  | 28,027    |          |             |  | 28,027       |               |  |            | (1,756   | )           |  | 1997                |  | 07/02/01 |  |  | 40 | 
|289 |  |                         |        |              |              |  | 18,739    |          |             |  | 18,739       |               |  |            | (1,456   | )           |  | 2001                |  | 07/02/01 |  |  | 40 | 
|290 |  |                         | 2,866   |              |              |  | 17,298    |          |             |  | 20,164       |               |  |            | (1,138   | )           |  | 1984-1986           |  | 07/02/01 |  |  | 40 | 
|291 |  |                         | 10,812  |              |              |  | 83,641    |          |             |  | 94,454       |               |  |            | (5,565   | )           |  | 1986-1988           |  | 07/02/01 |  |  | 40 | 
|292 |  |                         | 2,700   |              |              |  | 16,255    |          |             |  | 18,955       |               |  |            | (1,483   | )           |  | 1987                |  | 06/19/00 |  |  | 40 | 
|293 |  |                         | 870     |              |              |  | 5,351     |          |             |  | 6,221        |               |  |            | (394     | )           |  | 1980                |  | 07/02/01 |  |  | 40 | 
|294 |  |                         | 7,505   |              |              |  | 44,759    |          |             |  | 52,264       |               |  |            | (3,117   | )           |  | 1974/1994           |  | 07/02/01 |  |  | 40 | 
|295 |  |                         | 18,760  |              |              |  | 112,678   |          |             |  | 131,438      |               |  |            | (7,253   | )           |  | 1980/1989           |  | 07/02/01 |  |  | 40 | 
|296 |  |                         | 4,451   |              |              |  | 26,475    |          |             |  | 30,926       |               |  |            | (1,731   | )           |  | 1983                |  | 07/02/01 |  |  | 40 | 
|297 |  |                         | 4,038   |              |              |  | 26,021    |          |             |  | 30,059       |               |  |            | (1,937   | )           |  | 1985                |  | 07/02/01 |  |  | 40 | 
|298 |  |                         | 2,537   |              |              |  | 12,940    |          |             |  | 15,477       |               |  |            | (1,479   | )           |  | 1947/1979           |  | 07/02/01 |  |  | 40 | 
|299 |  |                         | 5,383   |              |              |  | 56,598    |          |             |  | 61,981       |               |  |            | (9,325   | )           |  | 1980                |  | 12/17/97 |  |  | 40 | 
|300 |  |                         | 4,794   |              |              |  | 30,943    |          |             |  | 35,736       |               |  |            | (2,050   | )           |  | 1987/1991           |  | 07/02/01 |  |  | 40 | 
|301 |  |                         | 51,000  |              |              |  | 289,741   |          |             |  | 340,741      |               |  |            | (27,040  | )           |  | 1988                |  | 06/19/00 |  |  | 40 | 
|302 |  |                         | 9,900   |              |              |  | 93,304    |          |             |  | 103,204      |               |  |            | (16,156  | )           |  | 1980                |  | 12/17/97 |  |  | 40 | 
|303 |  |                         |        |              |              |  | 2,028     |          |             |  | 2,028        |               |  |            | (13      | )           |  | 1962,1978,1982,1987 |  | 07/02/01 |  |  | 40 | 
|304 |  |                         | 1,700   |              |              |  | 16,015    |          |             |  | 17,715       |               |  |            | (2,580   | )           |  | 1986                |  | 12/17/97 |  |  | 40 | 
|305 |  |                         | 10,922  |              |              |  | 101,559   |          |             |  | 112,482      |               |  |            | (16,293  | )           |  | 1991                |  | 12/17/97 |  |  | 40 | 
|306 |  |                         | 1,968   |              |              |  | 20,564    |          |             |  | 22,532       |               |  |            | (3,291   | )           |  | 1906/1989           |  | 07/29/98 |  |  | 40 | 
|307 |  |                         | 21,361  |              |              |  | 203,912   |          |             |  | 225,273      |               |  |            | (32,228  | )           |  | 1983                |  | 12/17/97 |  |  | 40 | 
|308 |  |                         | 12,934  |              |              |  | 80,572    |          |             |  | 93,505       |               |  |            | (5,142   | )           |  | 1991                |  | 07/02/01 |  |  | 40 | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                     | 
|    |  |                         | 274,541 |              |              |  | 2,202,689 |          |             |  | 2,477,230    |               |  |            | (222,870 | )           |  |                     |  |          |  |  |    | 
|    |  |                         |         |              |              |  |           |          |             |  |              |               |  |            |          |             |  |                     | 
|309 |  |                         | 16,943  |              |              |  | 176,236   |          |             |  | 193,179      |               |  |            | (24,467  | )           |  | 1970                |  | 05/22/98 |  |  | 40 | 
|310 |  |                         | 865     |              |              |  | 9,528     |          |             |  | 10,393       |               |  |            | (1,717   | )           |  | 1988                |  | 10/07/97 |  |  | 40 | 
|311 |  |                         | 717     |              |              |  | 7,765     |          |             |  | 8,482        |               |  |            | (1,568   | )           |  | 1982                |  | 11/21/97 |  |  | 40 | 
|312 |  |                         | 1,012   |              |              |  | 10,534    |          |             |  | 11,546       |               |  |            | (2,167   | )           |  | 1984                |  | 11/21/97 |  |  | 40 | 



---



##### Table of Contents



|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              |  |  |     |  |  |  |        | 
|--- |  | ----------------------------------- |  | ----- | ---------- | - | -------- | --------------- | --------- | ------------ | ---- | --------------- | ---------- | ----------------- | ------------- | - | ----- | ------------ | ------ | ------------ | --------- |  | ------- | ------------ |  |  | --- |  |  |  | ------ | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |  
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            | Costs Capitalized |              
|    |  |                                     |  |       |            |   |          |                 |           |              |      | Initial Cost to |            |                   | Subsequent to |  
|    |  |                                     |  |       |            |   |          |                 |           |              |      | EOP Partnership |            |                   | Acquisition   |  
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |  
|    |  |                                     |  |       |            |   |          |                 |           | Encumbrances |      |                 |            |                   | Building and  |   |       |              |        | Building and |          
|    |  | Description                         |  | Notes |            |   | Location |                 | State     |              |      | at 12/31/03     |            |                   | Land          |   |       | Improvements |        |              | Land      |  |         | Improvements | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              | 
|313 |  | Two Valley Square                   |  |       |            |   |          | Blue Bell       |           |              | PA   |                 |            |                   |              |   |       |              | 879    |              |           |  | 7,913   |              |  |  |    |  |  |  | 647    | 
|314 |  | Four Falls                          |  |       |            |   |          | Conshohocken    |           |              | PA   |                 |            |                   |              |   |       |              | 4,939  |              |           |  | 44,458  |              |  |  | 55  |  |  |  | 3,007  | 
|315 |  | Centerpointe I & II                 |  |       |            |   |          | Fairfax         |           |              | VA   |                 |            |                   | 0             |   |       |              | 8,838  |              |           |  | 79,540  |              |  |  | 367 |  |  |  | 1,810  | 
|316 |  | Fair Oaks Plaza                     |  |       |            |   |          | Fairfax         |           |              | VA   |                 |            |                   |              |   |       |              | 2,412  |              |           |  | 21,712  |              |  |  | 35  |  |  |  | 1,513  | 
|317 |  | Northridge I                        |  |       | (8)        |   |          | Herndon         |           |              | VA   |                 |            |                   | (12,901       | ) |       |              | 3,225  |              |           |  | 29,024  |              |  |  |    |  |  |  | 1,526  | 
|318 |  | Oak Hill Plaza                      |  |       |            |   |          | King of Prussia |           |              | PA   |                 |            |                   |              |   |       |              | 2,208  |              |           |  | 19,879  |              |  |  |    |  |  |  | 2,203  | 
|319 |  | Walnut Hill Plaza                   |  |       |            |   |          | King of Prussia |           |              | PA   |                 |            |                   | (13,651       | ) |       |              | 2,045  |              |           |  | 18,410  |              |  |  |    |  |  |  | 1,086  | 
|320 |  | John Marshall III                   |  |       |            |   |          | McLean          |           |              | VA   |                 |            |                   |              |   |       |              | 9,950  |              |           |  | 29,863  |              |  |  |    |  |  |  | 3,737  | 
|321 |  | E.J. Randolph                       |  |       | (8)        |   |          | McLean          |           |              | VA   |                 |            |                   | (14,223       | ) |       |              | 3,937  |              |           |  | 35,429  |              |  |  | 7   |  |  |  | 1,079  | 
|322 |  | John Marshall I                     |  |       |            |   |          | McLean          |           |              | VA   |                 |            |                   | (17,109       | ) |       |              | 5,216  |              |           |  | 46,814  |              |  |  | 24  |  |  |  | 461    | 
|323 |  | E.J. Randolph II                    |  |       |            |   |          | McLean          |           |              | VA   |                 |            |                   |              |   |       |              | 5,770  |              |           |  | 24,587  |              |  |  |    |  |  |  | 3,853  | 
|324 |  | 1601 Market                         |  |       | (3)        |   |          | Philadelphia    |           |              | PA   |                 |            |                   |              |   |       |              | 5,781  |              |           |  | 52,027  |              |  |  |    |  |  |  | 16,852 | 
|325 |  | 1700 Market                         |  |       |            |   |          | Philadelphia    |           |              | PA   |                 |            |                   |              |   |       |              | 9,389  |              |           |  | 84,498  |              |  |  |    |  |  |  | 26,529 | 
|326 |  | Reston Town Center Garage           |  |       | (3)        |   |          | Reston          |           |              | VA   |                 |            |                   |              |   |       |              | 1,943  |              |           |  | 9,792   |              |  |  |    |  |  |  | 1,812  | 
|327 |  | Reston Town Center                  |  |       | (3)        |   |          | Reston          |           |              | VA   |                 |            |                   | (114,657      | ) |       |              | 18,175 |              |           |  | 154,576 |              |  |  | 83  |  |  |  | 14,925 | 
|328 |  | 1300 North 17th Street              |  |       |            |   |          | Rosslyn         |           |              | VA   |                 |            |                   |              |   |       |              | 9,811  |              |           |  | 88,296  |              |  |  |    |  |  |  | 3,884  | 
|329 |  | 1616 N. Fort Myer Drive             |  |       |            |   |          | Rosslyn         |           |              | VA   |                 |            |                   |              |   |       |              | 6,961  |              |           |  | 62,646  |              |  |  |    |  |  |  | 3,551  | 
|330 |  | Army and Navy Club Building         |  |       |            |   |          | Washington      |           |              | D.C. |                 |            |                   |              |   |       |              | 3,773  |              |           |  | 33,954  |              |  |  |    |  |  |  | 177    | 
|331 |  | Market Square                       |  |       |            |   |          | Washington      |           |              | D.C. |                 |            |                   |              |   |       |              | 33,077 |              |           |  | 187,437 |              |  |  |    |  |  |  | 208    | 
|332 |  | One Lafayette Centre                |  |       |            |   |          | Washington      |           |              | D.C. |                 |            |                   |              |   |       |              | 8,262  |              |           |  | 74,362  |              |  |  |    |  |  |  | 2,741  | 
|333 |  | Three Lafayette Centre              |  |       |            |   |          | Washington      |           |              | D.C. |                 |            |                   |              |   |       |              | 6,871  |              |           |  | 61,841  |              |  |  |    |  |  |  | 4,893  | 
|334 |  | Two Lafayette Centre                |  |       |            |   |          | Washington      |           |              | D.C. |                 |            |                   |              |   |       |              | 2,642  |              |           |  | 26,676  |              |  |  |    |  |  |  | 1,378  | 
|335 |  | Liberty Place                       |  |       |            |   |          | Washington      |           |              | D.C. |                 |            |                   |              |   |       |              | 5,625  |              |           |  | 50,625  |              |  |  |    |  |  |  | 876    | 
|336 |  | One Devon Square                    |  |       |            |   |          | Wayne           |           |              | PA   |                 |            |                   |              |   |       |              | 1,025  |              |           |  | 9,227   |              |  |  |    |  |  |  | 1,586  | 
|337 |  | Three Devon Square                  |  |       |            |   |          | Wayne           |           |              | PA   |                 |            |                   |              |   |       |              | 413    |              |           |  | 3,713   |              |  |  |    |  |  |  | 23     | 
|338 |  | Two Devon Square                    |  |       |            |   |          | Wayne           |           |              | PA   |                 |            |                   |              |   |       |              | 659    |              |           |  | 5,935   |              |  |  |    |  |  |  | 492    | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              | 
|    |  | Washington D.C. Region Totals       |  |       | (172,540   | ) |          |                 | 183,362   |              |      |                 | 1,439,078  |                   |               |   | 570   |              |        |              | 129,070   | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |      
|    |  | Subtotal Office Properties          |  |       | (2,308,491 | ) |          |                 | 2,664,186 |              |      |                 | 19,103,956 |                   |               |   | 3,892 |              |        |              | 1,615,163 | 
|    |  | Development Properties:             |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              |  |  |     |  |  |  |        | 
|339 |  | Kruse Woods V                       |  |       | (9)        |   |          | Lake Oswego     |           |              | OR   |                 |            |                   |              |   |       |              | 5,478  |              |           |  |        |              |  |  |    |  |  |  | 24,551 | 
|340 |  | Douglas Corporate Center II         |  |       | (9)        |   |          | Roseville       |           |              | CA   |                 |            |                   |              |   |       |              | 1,700  |              |           |  |        |              |  |  |    |  |  |  | 11,904 | 
|341 |  | Cambridge Science Center            |  |       | (9)        |   |          | Cambridge       |           |              | MA   |                 |            |                   |              |   |       |              | 1,959  |              |           |  | 17,635  |              |  |  |    |  |  |  | 12,005 | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              | 
|    |  | Subtotal Development Properties     |  |       |           |   |          |                 | 9,137     |              |      |                 | 17,635     |                   |               |   |      |              |        |              | 48,460    | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |      
|    |  | Industrial Properties:              |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              |  |  |     |  |  |  |        | 
|    |  | Los Angeles Region                  |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              |  |  |     |  |  |  |        | 
|1   |  | Airport Commerce Center             |  |       |            |   |          | Bakersfield     |           |              | CA   |                 |            |                   |              |   |       |              | 525    |              |           |  | 2,975   |              |  |  |    |  |  |  |       | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              | 
|    |  | Los Angeles Region Totals           |  |       |           |   |          |                 | 525       |              |      |                 | 2,975      |                   |               |   |      |              |        |              |          | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |      
|    |  | San Francisco Region                |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              |  |  |     |  |  |  |        | 
|2   |  | Benicia Ind II & III                |  |       |            |   |          | Benicia         |           |              | CA   |                 |            |                   |              |   |       |              | 2,250  |              |           |  | 12,750  |              |  |  |    |  |  |  | 59     | 
|3   |  | BayCenter Business Park I, II & III |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 6,240  |              |           |  | 35,360  |              |  |  |    |  |  |  | 655    | 
|4   |  | Cabot Boulevard Warehouse           |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 1,905  |              |           |  | 10,795  |              |  |  |    |  |  |  | 43     | 
|5   |  | Eden Landing Business Center        |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 945    |              |           |  | 5,355   |              |  |  |    |  |  |  | 297    | 
|6   |  | Hayward Business Park               |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 6,750  |              |           |  | 38,250  |              |  |  |    |  |  |  | 324    | 
|7   |  | Huntwood Business Center            |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 2,625  |              |           |  | 14,875  |              |  |  |    |  |  |  | 380    | 
|8   |  | Keebler Warehouse                   |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 630    |              |           |  | 3,570   |              |  |  |    |  |  |  | 762    | 
|9   |  | The Good Guys Distribution Center   |  |       |            |   |          | Hayward         |           |              | CA   |                 |            |                   |              |   |       |              | 3,525  |              |           |  | 19,975  |              |  |  |    |  |  |  |       | 
|10  |  | Independent Road Warehouse          |  |       |            |   |          | Oakland         |           |              | CA   |                 |            |                   |              |   |       |              | 900    |              |           |  | 5,100   |              |  |  |    |  |  |  | 7      | 
|11  |  | Port of Oakland                     |  |       |            |   |          | Oakland         |           |              | CA   |                 |            |                   |              |   |       |              | 2,025  |              |           |  | 11,475  |              |  |  |    |  |  |  | 256    | 
|12  |  | Doolittle Business Center           |  |       |            |   |          | San Leandro     |           |              | CA   |                 |            |                   |              |   |       |              | 1,320  |              |           |  | 7,480   |              |  |  |    |  |  |  | 78     | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              | 
|    |  | San Francisco Region Totals         |  |       |           |   |          |                 | 29,115    |              |      |                 | 164,985    |                   |               |   |      |              |        |              | 2,861     | 
|    |  |                                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |      
|    |  | San Jose Region                     |  |       |            |   |          |                 |           |              |      |                 |            |                   |               |   |       |              |        |              |           |  |         |              |  |  |     |  |  |  |        | 
|13  |  | Fremont Bayside                     |  |       | (7)        |   |          | Fremont         |           |              | CA   |                 |            |                   | (5,396        | ) |       |              | 2,025  |              |           |  | 11,475  |              |  |  |    |  |  |  | 89     | 
|14  |  | Fremont Commerce Centers            |  |       |            |   |          | Fremont         |           |              | CA   |                 |            |                   |              |   |       |              | 4,440  |              |           |  | 25,160  |              |  |  |    |  |  |  | 382    | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           |  |          |  |  |    | 
|--- |  | ----------------------- | --------- | ------------ | ------------ |  | ---------- | -------- | ----------- |  | ------------ | ------------- |  | ---------- | ---------- | ----------- |  | --------- |  | -------- |  |  | -- | 
|    |  |                         |           |              |              |  |            |          |             |  |              |              
|    |  | Gross Amount Carried at |           |              |              |  |            |          |             |  |              |               | 
|    |  | Close of Period         |           |              |              |  |            |          |             |  |              |               | 
|    |  | 12/31/2003              |           |              |              |  |            |          |             |  |              |               | 
|    |  |                         |           |              |              |  |            |          | Date of     |  |              |               | 
|    |  |                         |           | Building and |              |  |            |          | Accumulated |  |              | Construction/ |  | Date       |            | Depreciable | 
|    |  | Land                    |           |              | Improvements |  |            | Total(1) |             |  | Depreciation |               |  | Renovation |            | Acquired    |  | Lives(2)  | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|313 |  |                         | 879       |              |              |  | 8,560      |          |             |  | 9,439        |               |  |            | (1,386     | )           |  | 1990      |  | 10/07/97 |  |  | 40 | 
|314 |  |                         | 4,994     |              |              |  | 47,466     |          |             |  | 52,459       |               |  |            | (8,214     | )           |  | 1988      |  | 10/07/97 |  |  | 40 | 
|315 |  |                         | 9,205     |              |              |  | 81,350     |          |             |  | 90,555       |               |  |            | (12,803    | )           |  | 1990/1998 |  | 12/19/97 |  |  | 40 | 
|316 |  |                         | 2,447     |              |              |  | 23,225     |          |             |  | 25,672       |               |  |            | (3,941     | )           |  | 1986      |  | 11/24/97 |  |  | 40 | 
|317 |  |                         | 3,225     |              |              |  | 30,551     |          |             |  | 33,776       |               |  |            | (4,927     | )           |  | 1988      |  | 12/19/97 |  |  | 40 | 
|318 |  |                         | 2,208     |              |              |  | 22,081     |          |             |  | 24,290       |               |  |            | (3,471     | )           |  | 1982      |  | 10/07/97 |  |  | 40 | 
|319 |  |                         | 2,045     |              |              |  | 19,496     |          |             |  | 21,541       |               |  |            | (3,367     | )           |  | 1985      |  | 10/07/97 |  |  | 40 | 
|320 |  |                         | 9,950     |              |              |  | 33,599     |          |             |  | 43,549       |               |  |            | (4,204     | )           |  | 2000      |  | 12/19/97 |  |  | 40 | 
|321 |  |                         | 3,944     |              |              |  | 36,508     |          |             |  | 40,451       |               |  |            | (5,690     | )           |  | 1983      |  | 12/19/97 |  |  | 40 | 
|322 |  |                         | 5,240     |              |              |  | 47,275     |          |             |  | 52,515       |               |  |            | (7,172     | )           |  | 1981      |  | 12/19/97 |  |  | 40 | 
|323 |  |                         | 5,770     |              |              |  | 28,440     |          |             |  | 34,210       |               |  |            | (1,387     | )           |  | 2002      |  | 12/19/97 |  |  | 40 | 
|324 |  |                         | 5,781     |              |              |  | 68,880     |          |             |  | 74,661       |               |  |            | (12,276    | )           |  | 1970      |  | 01/18/96 |  |  | 40 | 
|325 |  |                         | 9,389     |              |              |  | 111,028    |          |             |  | 120,417      |               |  |            | (21,773    | )           |  | 1969/1989 |  | 10/01/97 |  |  | 40 | 
|326 |  |                         | 1,943     |              |              |  | 11,604     |          |             |  | 13,547       |               |  |            | (1,573     | )           |  | 1999      |  | 10/22/96 |  |  | 40 | 
|327 |  |                         | 18,258    |              |              |  | 169,502    |          |             |  | 187,759      |               |  |            | (26,484    | )           |  | 1990      |  | 10/22/96 |  |  | 40 | 
|328 |  |                         | 9,811     |              |              |  | 92,180     |          |             |  | 101,991      |               |  |            | (14,151    | )           |  | 1980      |  | 12/19/97 |  |  | 40 | 
|329 |  |                         | 6,961     |              |              |  | 66,197     |          |             |  | 73,158       |               |  |            | (10,150    | )           |  | 1974      |  | 12/19/97 |  |  | 40 | 
|330 |  |                         | 3,773     |              |              |  | 34,131     |          |             |  | 37,904       |               |  |            | (1,372     | )           |  | 1986      |  | 05/24/02 |  |  | 40 | 
|331 |  |                         | 33,077    |              |              |  | 187,645    |          |             |  | 220,722      |               |  |            | (15,712    | )           |  | 1990      |  | 06/19/00 |  |  | 40 | 
|332 |  |                         | 8,262     |              |              |  | 77,103     |          |             |  | 85,365       |               |  |            | (12,448    | )           |  | 1980/1993 |  | 10/17/97 |  |  | 40 | 
|333 |  |                         | 6,871     |              |              |  | 66,734     |          |             |  | 73,606       |               |  |            | (3,603     | )           |  | 1986      |  | 10/17/01 |  |  | 40 | 
|334 |  |                         | 2,642     |              |              |  | 28,053     |          |             |  | 30,695       |               |  |            | (2,507     | )           |  | 1985      |  | 07/11/00 |  |  | 40 | 
|335 |  |                         | 5,625     |              |              |  | 51,501     |          |             |  | 57,126       |               |  |            | (1,635     | )           |  | 1991      |  | 09/17/02 |  |  | 40 | 
|336 |  |                         | 1,025     |              |              |  | 10,813     |          |             |  | 11,838       |               |  |            | (2,062     | )           |  | 1984      |  | 10/07/97 |  |  | 40 | 
|337 |  |                         | 413       |              |              |  | 3,736      |          |             |  | 4,148        |               |  |            | (578       | )           |  | 1985      |  | 10/07/97 |  |  | 40 | 
|338 |  |                         | 659       |              |              |  | 6,427      |          |             |  | 7,086        |               |  |            | (1,097     | )           |  | 1985      |  | 10/07/97 |  |  | 40 | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|    |  |                         | 183,931   |              |              |  | 1,568,148  |          |             |  | 1,752,079    |               |  |            | (213,902   | )           |  |           |  |          |  |  |    | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|    |  |                         | 2,668,078 |              |              |  | 20,719,119 |          |             |  | 23,387,197   |               |  |            | (2,511,945 | )           |  |           |  |          |  |  |    | 
|339 |  |                         | 5,478     |              |              |  | 24,551     |          |             |  | 30,029       |               |  |            |           |             |  | N/A       |  | 07/02/01 |  |  |    | 
|340 |  |                         | 1,700     |              |              |  | 11,904     |          |             |  | 13,604       |               |  |            |           |             |  | N/A       |  | 07/02/01 |  |  |    | 
|341 |  |                         | 1,959     |              |              |  | 29,640     |          |             |  | 31,599       |               |  |            | (2,305     | )           |  | N/A       |  | 12/19/97 |  |  |    | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|    |  |                         | 9,137     |              |              |  | 66,095     |          |             |  | 75,232       |               |  |            | (2,305     | )           |  |           |  |          |  |  |    | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|1   |  |                         | 525       |              |              |  | 2,975      |          |             |  | 3,500        |               |  |            | (183       | )           |  | 1982      |  | 07/02/01 |  |  | 40 | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|    |  |                         | 525       |              |              |  | 2,975      |          |             |  | 3,500        |               |  |            | (183       | )           |  |           |  |          |  |  |    | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|2   |  |                         | 2,250     |              |              |  | 12,809     |          |             |  | 15,059       |               |  |            | (818       | )           |  | 1996      |  | 07/02/01 |  |  | 40 | 
|3   |  |                         | 6,240     |              |              |  | 36,015     |          |             |  | 42,255       |               |  |            | (2,264     | )           |  | 1994      |  | 07/02/01 |  |  | 40 | 
|4   |  |                         | 1,905     |              |              |  | 10,838     |          |             |  | 12,743       |               |  |            | (672       | )           |  | 1988      |  | 07/02/01 |  |  | 40 | 
|5   |  |                         | 945       |              |              |  | 5,652      |          |             |  | 6,597        |               |  |            | (386       | )           |  | 1990      |  | 07/02/01 |  |  | 40 | 
|6   |  |                         | 6,750     |              |              |  | 38,574     |          |             |  | 45,324       |               |  |            | (2,407     | )           |  | 1980-1981 |  | 07/02/01 |  |  | 40 | 
|7   |  |                         | 2,625     |              |              |  | 15,255     |          |             |  | 17,880       |               |  |            | (981       | )           |  | 1979      |  | 07/02/01 |  |  | 40 | 
|8   |  |                         | 630       |              |              |  | 4,332      |          |             |  | 4,962        |               |  |            | (240       | )           |  | 1985      |  | 07/02/01 |  |  | 40 | 
|9   |  |                         | 3,525     |              |              |  | 19,975     |          |             |  | 23,500       |               |  |            | (1,228     | )           |  | 1990      |  | 07/02/01 |  |  | 40 | 
|10  |  |                         | 900       |              |              |  | 5,107      |          |             |  | 6,007        |               |  |            | (313       | )           |  | 1972      |  | 07/02/01 |  |  | 40 | 
|11  |  |                         | 2,025     |              |              |  | 11,731     |          |             |  | 13,756       |               |  |            | (743       | )           |  | 1977      |  | 07/02/01 |  |  | 40 | 
|12  |  |                         | 1,320     |              |              |  | 7,558      |          |             |  | 8,878        |               |  |            | (474       | )           |  | 1978      |  | 07/02/01 |  |  | 40 | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|    |  |                         | 29,115    |              |              |  | 167,846    |          |             |  | 196,961      |               |  |            | (10,527    | )           |  |           |  |          |  |  |    | 
|    |  |                         |           |              |              |  |            |          |             |  |              |               |  |            |            |             |  |           | 
|13  |  |                         | 2,025     |              |              |  | 11,564     |          |             |  | 13,589       |               |  |            | (717       | )           |  | 1990      |  | 07/02/01 |  |  | 40 | 
|14  |  |                         | 4,440     |              |              |  | 25,542     |          |             |  | 29,982       |               |  |            | (1,586     | )           |  | 1988      |  | 07/02/01 |  |  | 40 | 



---



##### Table of Contents



|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |     |              |           |              |         |   |            |              |  |   |       |   |  |   |           | 
|-- |  | --------------------------------- |  | ----- | ------ | - | -------- | ----------- | ------ | ------------ | -- | --------------- | ------- | ----------------- | ------------- | - | --- | ------------ | --------- | ------------ | ------- | - | ---------- | ------------ |  | - | ----- | - |  | - | --------- | 
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |  
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         | Costs Capitalized |              
|   |  |                                   |  |       |        |   |          |             |        |              |    | Initial Cost to |         |                   | Subsequent to |  
|   |  |                                   |  |       |        |   |          |             |        |              |    | EOP Partnership |         |                   | Acquisition   |  
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |  
|   |  |                                   |  |       |        |   |          |             |        | Encumbrances |    |                 |         |                   | Building and  |   |     |              |           | Building and |        
|   |  | Description                       |  | Notes |        |   | Location |             | State  |              |    | at 12/31/03     |         |                   | Land          |   |     | Improvements |           |              | Land    |   |            | Improvements | 
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |     |              |           |              |         |   |            |              | 
|15 |  | Industrial Drive                  |  |       | (7)    |   |          | Fremont     |        |              | CA |                 |         |                   | (2,002        | ) |     |              | 2,250     |              |         |   | 12,750     |              |  |   |      |   |  |   |          | 
|16 |  | Kato R & D                        |  |       |        |   |          | Fremont     |        |              | CA |                 |         |                   |              |   |     |              | 1,095     |              |         |   | 6,205      |              |  |   |      |   |  |   |          | 
|17 |  | Milmont R & D                     |  |       |        |   |          | Fremont     |        |              | CA |                 |         |                   |              |   |     |              | 900       |              |         |   | 5,100      |              |  |   |      |   |  |   | 20        | 
|18 |  | Cadillac Court I & II             |  |       |        |   |          | Milpitas    |        |              | CA |                 |         |                   |              |   |     |              | 1,460     |              |         |   | 8,272      |              |  |   |      |   |  |   | 181       | 
|19 |  | COG Warehouse                     |  |       |        |   |          | Milpitas    |        |              | CA |                 |         |                   |              |   |     |              | 1,275     |              |         |   | 7,225      |              |  |   |      |   |  |   | 350       | 
|20 |  | Dixon Landing North I & II        |  |       |        |   |          | Milpitas    |        |              | CA |                 |         |                   |              |   |     |              | 3,922     |              |         |   | 22,222     |              |  |   |      |   |  |   | 261       | 
|21 |  | Okidata Distribution Center       |  |       |        |   |          | Milpitas    |        |              | CA |                 |         |                   |              |   |     |              | 1,613     |              |         |   | 9,138      |              |  |   |      |   |  |   | 157       | 
|22 |  | Charcot Business Center           |  |       |        |   |          | San Jose    |        |              | CA |                 |         |                   |              |   |     |              | 3,450     |              |         |   | 19,550     |              |  |   | 54    |   |  |   | 359       | 
|23 |  | Montague Industrial Center        |  |       |        |   |          | San Jose    |        |              | CA |                 |         |                   |              |   |     |              | 3,750     |              |         |   | 21,250     |              |  |   | 64    |   |  |   | 533       | 
|24 |  | North American Van Lines          |  |       |        |   |          | San Jose    |        |              | CA |                 |         |                   |              |   |     |              | 2,089     |              |         |   | 11,837     |              |  |   | (58   | ) |  |   | 58        | 
|25 |  | 2509-2909 Stender Way             |  |       |        |   |          | Santa Clara |        |              | CA |                 |         |                   |              |   |     |              | 1,275     |              |         |   | 7,225      |              |  |   |      |   |  |   |          | 
|26 |  | Walsh @ Lafayette Industrial Park |  |       |        |   |          | Santa Clara |        |              | CA |                 |         |                   |              |   |     |              | 5,250     |              |         |   | 29,750     |              |  |   |      |   |  |   | 24        | 
|27 |  | Kifer Road Industrial Park        |  |       |        |   |          | Sunnyvale   |        |              | CA |                 |         |                   |              |   |     |              | 4,869     |              |         |   | 27,220     |              |  |   | 93    |   |  |   | 231       | 
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |     |              |           |              |         |   |            |              | 
|   |  | San Jose Region Total             |  |       | (7,398 | ) |          |             | 39,662 |              |    |                 | 224,379 |                   |               |   | 154 |              |           |              | 2,643   |  
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |    
|   |  | Subtotal Industrial Properties    |  |       | (7,398 | ) |          |             | 69,302 |              |    |                 | 392,339 |                   |               |   | 154 |              |           |              | 5,504   |  
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |    
|   |  | Land Available for Development    |  |       |        |   |          | Various     |        |              |    |                 |         |                   |              |   |     |              | 251,151   |              |         |   |           |              |  |   |      |   |  |   | 2,398     | 
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |     |              |           |              |         |   |            |              | 
|   |  | Management Business               |  |       |       |   |          |             |       |              |    |                 |        |                   |               |   |    |              |           |              | 128,945 |  
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |    
|   |  | Investment in Real Estate         |  |       | (10)   |   |          |             |        |              |    |                 |         | $                 | (2,315,889    | ) |     | $            | 2,993,776 |              |         | $ | 19,513,930 |              |  | $ | 4,045 |   |  | $ | 1,800,471 | 
|   |  |                                   |  |       |        |   |          |             |        |              |    |                 |         |                   |               |   |     |              |           |              |         |   |            |              | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          |  |          |  |  |      | 
|-- |  | ----------------------- | --------- | ------------ | ------------ | - | ---------- | -------- | ----------- | - | ------------ | ------------- |  | ---------- | ---------- | ----------- |  | -------- |  | -------- |  |  | ---- | 
|   |  |                         |           |              |              |   |            |          |             |   |              |              
|   |  | Gross Amount Carried at |           |              |              |   |            |          |             |   |              |               | 
|   |  | Close of Period         |           |              |              |   |            |          |             |   |              |               | 
|   |  | 12/31/2003              |           |              |              |   |            |          |             |   |              |               | 
|   |  |                         |           |              |              |   |            |          | Date of     |   |              |               | 
|   |  |                         |           | Building and |              |   |            |          | Accumulated |   |              | Construction/ |  | Date       |            | Depreciable | 
|   |  | Land                    |           |              | Improvements |   |            | Total(1) |             |   | Depreciation |               |  | Renovation |            | Acquired    |  | Lives(2) | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 
|15 |  |                         | 2,250     |              |              |   | 12,750     |          |             |   | 15,000       |               |  |            | (784       | )           |  | 1993     |  | 07/02/01 |  |  | 40   | 
|16 |  |                         | 1,095     |              |              |   | 6,205      |          |             |   | 7,300        |               |  |            | (381       | )           |  | 1983     |  | 07/02/01 |  |  | 40   | 
|17 |  |                         | 900       |              |              |   | 5,120      |          |             |   | 6,020        |               |  |            | (314       | )           |  | 1990     |  | 07/02/01 |  |  | 40   | 
|18 |  |                         | 1,460     |              |              |   | 8,453      |          |             |   | 9,913        |               |  |            | (509       | )           |  | 1991     |  | 07/02/01 |  |  | 40   | 
|19 |  |                         | 1,275     |              |              |   | 7,575      |          |             |   | 8,850        |               |  |            | (444       | )           |  | 1992     |  | 07/02/01 |  |  | 40   | 
|20 |  |                         | 3,922     |              |              |   | 22,484     |          |             |   | 26,405       |               |  |            | (1,366     | )           |  | 1998     |  | 07/02/01 |  |  | 40   | 
|21 |  |                         | 1,613     |              |              |   | 9,294      |          |             |   | 10,907       |               |  |            | (568       | )           |  | 1993     |  | 07/02/01 |  |  | 40   | 
|22 |  |                         | 3,504     |              |              |   | 19,909     |          |             |   | 23,413       |               |  |            | (1,246     | )           |  | 1978     |  | 07/02/01 |  |  | 40   | 
|23 |  |                         | 3,814     |              |              |   | 21,783     |          |             |   | 25,597       |               |  |            | (1,465     | )           |  | 1993     |  | 07/02/01 |  |  | 40   | 
|24 |  |                         | 2,031     |              |              |   | 11,894     |          |             |   | 13,926       |               |  |            | (727       | )           |  | 1988     |  | 07/02/01 |  |  | 40   | 
|25 |  |                         | 1,275     |              |              |   | 7,225      |          |             |   | 8,500        |               |  |            | (444       | )           |  | 1995     |  | 07/02/01 |  |  | 40   | 
|26 |  |                         | 5,250     |              |              |   | 29,774     |          |             |   | 35,024       |               |  |            | (1,828     | )           |  | 1996     |  | 07/02/01 |  |  | 40   | 
|27 |  |                         | 4,962     |              |              |   | 27,451     |          |             |   | 32,413       |               |  |            | (1,682     | )           |  | 1979     |  | 07/02/01 |  |  | 40   | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 
|   |  |                         | 39,816    |              |              |   | 227,022    |          |             |   | 266,838      |               |  |            | (14,061    | )           |  |          |  |          |  |  |      | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 
|   |  |                         | 69,456    |              |              |   | 397,843    |          |             |   | 467,298      |               |  |            | (24,771    | )           |  |          |  |          |  |  |      | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 
|   |  |                         | 251,151   |              |              |   | 2,398      |          |             |   | 253,550      |               |  |            |           |             |  |          |  | Various  |  |  | N/A  | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 
|   |  |                         |          |              |              |   | 128,945    |          |             |   | 128,945      |               |  |            | (39,061    | )           |  |          |  | Various  |  |  | 3-40 | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 
|   |  | $                       | 2,997,822 |              |              | $ | 21,314,400 |          |             | $ | 24,312,222   |               |  | $          | (2,578,082 | )           |  |          |  |          |  |  |      | 
|   |  |                         |           |              |              |   |            |          |             |   |              |               |  |            |            |             |  |          | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The aggregate cost for Federal Income Tax
    purposes as of December 31, 2003 was approximately
    $14.4 billion.                                                                                                                                                                                                                                                                                                                                                                              
|   
|(2) | The life to compute depreciation on building is
    35-40 years, except for Palo Alto which is subject to a
    ground lease that terminates in 2023. Therefore, the building is
    depreciated over the remaining term of the ground lease. The
    life to compute depreciation on building improvements is
    3-40 years.                                                                                                                                                                   
|   
|(3) | The date acquired represents the date these
    Properties were acquired by Equity Office Predecessors. The
    acquisition of the Properties, or interest therein, by the
    Company from Equity Office Predecessors in connection with the
    Consolidation on July 11, 1997, was accounted for using the
    purchase method of accounting in accordance with Accounting
    Principles Board Opinion No. 16. Accordingly, the assets
    were recorded by the Company at their fair values.
|   
|(4) | This Property contains 106 residential units in
    addition to 226,197 square feet of office space.                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(5) | These loans are subject to cross default and
    collateralization provisions.                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(6) | These properties were previously under
    development and have been placed into service during 2003.                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(7) | These loans are subject to cross default and
    collateralization provisions.                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(8) | These loans are subject to cross default and
    collateralization provisions.                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(9) | These properties are in various development
    stages. During the development period certain operating costs,
    including real estate taxes together with interest incurred
    during the development stages will be capitalized.                                                                                                                                                                                                                                                            



|     |                                                                                                
|---- | -----------------------------------------------------------------------------------------------
|(10) | The encumbrances at December 31, 2003
    include a net premium of approximately $13.7 million.



---



##### Table of Contents



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

The changes in investment in real estate for the
years ended December 31, 2003, 2002, and 2001 are as
follows:

|                                 |                           |                                                                                  |            |  |                   |   |            |                   |          |   |            |  |           |  
|-------------------------------- | ------------------------- | -------------------------------------------------------------------------------- | ---------- |  | ----------------- | - | ---------- | ----------------- | -------- | - | ---------- |  | --------- | -
|                                 |                           | December 31, 2003                                                                |            |  | December 31, 2002 |   |            | December 31, 2001 |         
|                                 |                           |                                                                                  |            |  |                   |   |            |                   |         
|Balance, beginning of the period |                           | $                                                                                | 25,163,516 |  |                   | $ | 24,816,351 |                   |          | $ | 17,619,380 | 
|                                 | Additions during period:  |                                                                                  |            |  |                   |   |            |                   |          |   |            |  |          
|                                 |                           | Acquisitions                                                                     |            |  | 163,511           |   |            |                   | 121,986  |   |            |  | 7,323,459 |  
|                                 |                           | Consolidation of Properties previously accounted
    for under the equity method |            |  | 85,870            |   |            |                   | 377,532  |   |            |  |          |  
|                                 |                           | Improvements                                                                     |            |  | 471,638           |   |            |                   | 328,930  |   |            |  | 360,065   |  
|                                 |                           | Other(1)                                                                         |            |  |                  |   |            |                   |         |   |            |  | (4,516    | )
|                                 | Deductions during period: |                                                                                  |            |  |                   |   |            |                   |          |   |            |  |          
|                                 |                           | Properties disposed of                                                           |            |  | (1,545,598        | ) |            |                   | (457,077 | ) |            |  | (482,037  | )
|                                 |                           | Impairment on assets held for Sale                                               |            |  | (7,667            | ) |            |                   |         |   |            |  |          |  
|                                 |                           | Write-off of fully depreciated assets which are
    no longer in service         |            |  | (19,048           | ) |            |                   | (24,206  | ) |            |  |          |  
|                                 |                           |                                                                                  |            |  |                   |   |            |                   |         
|Balance, end of period           |                           | $                                                                                | 24,312,222 |  |                   | $ | 25,163,516 |                   |          | $ | 24,816,351 | 
|                                 |                           |                                                                                  |            |  |                   |   |            |                   |         

The changes in accumulated depreciation for the
years ended December 31, 2003, 2002, 2001 and 2000, are as
follows:

|                                 |                           |                                                                          |                                                                                  |   |                   |   |            |                   |          |      |            |   |          |   | 
|-------------------------------- | ------------------------- | ------------------------------------------------------------------------ | -------------------------------------------------------------------------------- | - | ----------------- | - | ---------- | ----------------- | -------- | ---- | ---------- | - | -------- | - | 
|                                 |                           | December 31, 2003                                                        |                                                                                  |   | December 31, 2002 |   |            | December 31, 2001 |         
|                                 |                           |                                                                          |                                                                                  |   |                   |   |            |                   |         
|Balance, beginning of the period |                           | $                                                                        | (2,077,613                                                                       | ) |                   | $ | (1,494,301 | )                 |          | $    | (978,055   | )
|                                 | Additions during period:  |                                                                          |                                                                                  |   |                   |   |            |                   |          |      |            |   |         
|                                 |                           | Depreciation                                                             |                                                                                  |   | (663,935          | ) |            |                   | (637,633 | )    |            |   | (532,403 | )
|                                 |                           |                                                                          | Consolidation of Properties previously accounted
    for under the equity method |   |                   |  |            |                   |          | (617 | )          |   |          |  | 
|                                 | Deductions during period: |                                                                          |                                                                                  |   |                   |   |            |                   |          |      |            |   |         
|                                 |                           | Properties disposed of                                                   |                                                                                  |   | 144,251           |   |            |                   | 30,732   |      |            |   | 16,157   |  
|                                 |                           | Impairment on assets held for Sale                                       |                                                                                  |   | 167               |   |            |                   |         |      |            |   |         |  
|                                 |                           | Write-off of fully depreciated assets which are
    no longer in service |                                                                                  |   | 19,048            |   |            |                   | 24,206   |      |            |   |         |  
|                                 |                           |                                                                          |                                                                                  |   |                   |   |            |                   |         
|Balance, end of period           |                           | $                                                                        | (2,578,082                                                                       | ) |                   | $ | (2,077,613 | )                 |          | $    | (1,494,301 | )
|                                 |                           |                                                                          |                                                                                  |   |                   |   |            |                   |         



---



|    |                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Approximately $3.7 million relates to the
    value of building equipment received in exchange for Equity
    Offices equity position in a telecom company and the
    remainder relates to the write-off of internally developed
    software.