##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K/A

Amendment No. 2 to
Form 10-K




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|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                 
|þ          |  | 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

Commission File Number 001-13545

AMB Property, L.P.

(Exact Name of Registrant as Specified in Its
Charter)


|                                                                                         |  |                                  
|---------------------------------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                                                 |  | 94-3285362                       
|(State or Other Jurisdiction of
    Incorporation or Organization)                       |  | (IRS Employer Identification No.)
|Pier 1, Bay 1,
    San Francisco, California(Address of Principal Executive
    Offices) |  | 94111(Zip Code)                  

(415) 394-9000

(Registrants Telephone Number, Including
Area Code)


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

None


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

None


Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.     Yes þ          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 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.     o

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

No market exists for the registrants
partnership units and, therefore, an aggregate market value for
such units cannot be determined. Due to the market
capitalization of AMB Property Corporation, the
registrants general partner, the registrant is filing as
an accelerated filer.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference AMB
Property Corporations, the registrants general
partner, Proxy Statement for its Annual Meeting of Stockholders
which the registrant anticipates will be filed no later than
120 days after the end of its fiscal year pursuant to
Regulation 14A.



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Explanatory Note

This Amendment No. 2 on Form 10-K/ A
for AMB Property, L.P. for the year ended December 31, 2003
is being filed to amend and restate the items described below
contained in our Annual Report on Form 10-K and Amendment
No. 1 on Form 10-K/ A for such period originally filed
with the U.S. Securities and Exchange Commission on
March 11, 2004 and March 15, 2004, respectively.

As part of managements on-going review of
our accounting policies and internal control over financial
reporting, management determined that we should have depreciated
certain of our investments in buildings that reside on land
subject to ground leases over the remaining terms of the ground
leases, rather than over 40 years, which is the period used
to depreciate buildings that we hold in fee simple. We did not
segregate these assets into a separate expected useful life
category for depreciation purposes. This error resulted in our
failure to reflect additional depreciation expense in our
financial statements for the years ended December 31, 2003,
2002 and 2001 filed on Forms 10-K and 10-K/ A for the year
ended December 31, 2003.

This Amendment No. 2 amends Part II,
Item 6, Selected Financial Data; Part II, Item 7,
Managements Discussion and Analysis of Financial Condition
and Results of Operations; Part II, Item 9A, Controls
and Procedures; and Part IV, Item 15, Exhibits and
Financial Statement Schedules contained in our Form 10-K
and Amendment No. 1 on Form 10-K/ A originally filed
with the U.S. Securities and Exchange Commission on
March 11, 2004 and March 15, 2004, respectively, for
the following purposes:



| |   |                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | To amend Part II, Item 6, Selected
    Financial Data and Part II, Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations to take into account the effects of the restatement;                                                                                           
|
| |  | To amend Part II, Item 9A, Controls and
    Procedures, to reflect the restatement; and                                                                                                                                                                                                                                 
|
| |  | To amend Part IV, Item 15, Exhibits and
    Financial Statement Schedules, to restate our consolidated
    financial statements, the related notes and financial statement
    schedules, as more fully described in Note 2 to our
    restated consolidated financial statements contained in this
    Amendment No. 2.

Pursuant to Exchange Act Rule 12b-15, this
Amendment No. 2 sets forth the complete text of each item
of Form 10-K and Amendment No. 1 on Form 10-K/ A
listed above as further amended, and includes as
Exhibits 31 and 32 new certifications by the chief
executive officer, president and chief financial officer of our
general partner. This Amendment No. 2 does not reflect
events occurring after the filing of our original Form 10-K
on March 11, 2004 or our Amendment No. 1 on
Form 10-K/ A on March 15, 2004, or modify or update
the disclosures presented in our original Form 10-K filed
on March 11, 2004 or Amendment No. 1 to
Form 10-K/ A filed on March 15, 2004, except to
reflect the restatement as described above. Accordingly, this
Amendment No. 2 should be read in conjunction with our
filings made subsequent to the filing of our original
Form 10-K on March 11, 2004 and Amendment No. 1
on Form 10-K/ A on March 15, 2004, including any
amendments to those filings. Additional disclosure regarding the
restatement is included in Note 2 to the restated
consolidated financial statements included in Part IV,
Item 15 of this Amendment No. 2 on Form 10-K/ A.



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TABLE OF CONTENTS



|              |                                                                                              |  |  |  |  |  |  | 
|------------- | -------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | Item 1. Business                                                                            
|              | Item 2. Properties                                                                          
|              | Item 3. Legal Proceedings                                                                   
|              | Item 4. Submission of Matters to a Vote of Security Holders                                 
|PART II      
|              | Item 8. Financial Statements and Supplementary Data                                         
|              | Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|              | Item 9A. Controls and Procedures                                                            
|PART III     
|              | Items 10, 11, 12, 13 and 14.                                                                
|PART IV      
|              | Item 15. Exhibits and Financial Statement Schedules                                         
|SIGNATURES   
|SCHEDULE III 
|SCHEDULE III 
|SCHEDULE III 
|SCHEDULE III 
|SCHEDULE III 
|SCHEDULE III 
|SCHEDULE III 
|SCHEDULE III 
|EXHIBIT INDEX
|EXHIBIT 23.1 
|EXHIBIT 31.1 
|EXHIBIT 32.1 



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PART I






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

General

AMB Property, L.P., a Delaware limited
partnership, acquires, owns, operates, manages, renovates,
expands and develops primarily industrial properties in key
distribution markets throughout North America, Europe and Asia.
We commenced operations as a fully integrated real estate
company effective with the completion of AMB Property
Corporations initial public offering on November 26,
1997. Increasingly, our properties are designed for customers
who value the efficient movement of goods in the worlds
busiest distribution markets: large, supply-constrained
locations with close proximity to airports, seaports and major
freeway systems. As of December 31, 2003, we owned, managed
and had renovation and development projects totaling
101.5 million square feet (9.4 million square meters)
and 1,057 buildings in 36 markets within seven countries.

As of December 31, 2003, AMB Property
Corporation owned an approximate 94.5% general partnership
interest in us, excluding preferred units. As our sole general
partner, AMB Property Corporation has the full, exclusive and
complete responsibility for and discretion in our day-to-day
management and control.

Our investment strategy targets customers whose
businesses are tied to global trade, which, according to the
World Trade Organization, has grown at approximately 2.5 times
the world gross domestic product (GDP) growth rate during
the last 20 years. To serve the facilities needs of these
customers, we invest in major distribution markets,
transportation hubs and gateways in both the U.S. and
internationally. Our target markets are characterized by large
population densities and typically offer substantial consumer
bases, proximity to large clusters of distribution-facility
users and significant labor pools. When measured by annualized
base rents, 67.4% of our assets are concentrated in eight
U.S. hub and gateway distribution markets: Atlanta,
Chicago, Dallas/ Fort Worth, Los Angeles, Northern New
Jersey/ New York City, the San Francisco Bay Area, Miami
and Seattle. Our on-tarmac assets account for 8.9% of our
annualized base rents.

By focusing on an investment strategy that
targets areas of high customer demand and limited competition
from new supply, we believe that over time our net operating
income (rental revenues less property operating expenses and
real estate taxes) will grow and our property values will
increase. Much of our portfolio is comprised of strategically
located industrial buildings in in-fill submarkets; in-fill
locations are characterized by supply constraints on the
availability of land for competing projects as well as physical,
political or economic barriers to new development.

We focus our investment strategy on High
Throughput Distribution®, or HTD®
facilities, which are buildings designed to quickly distribute
our customers products, rather than store them. Our
investment focus on HTD assets is based on the global trend
toward lower inventory levels and expedited supply chains. HTD
facilities generally have a variety of characteristics that
allow the rapid transport of goods from point-to-point. Examples
of these physical characteristics include numerous dock doors,
shallower building depths, fewer columns, large truck courts and
more space for trailer parking. We believe that these building
characteristics represent an important success factor for
time-sensitive customers such as air express, logistics and
freight forwarding companies and that these facilities function
best when located in convenient proximity to transportation
infrastructure such as major airports and seaports.

As of December 31, 2003, we owned and
operated (exclusive of properties that we managed for third
parties) 948 industrial buildings and six retail and other
properties, totaling approximately 87.6 million rentable
square feet, located in 34 markets throughout North America and
in France, Germany and Japan. As of December 31, 2003,
through our subsidiary, AMB Capital Partners, LLC, we also
managed, but did not have an ownership interest in, industrial
buildings and retail centers, totaling approximately
0.5 million rentable square feet. In addition, as of
December 31, 2003, we had investments in operating
industrial buildings, totaling approximately 7.9 million
rentable square feet, through investments in unconsolidated joint

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ventures. As of December 31, 2003, we also
had investments in industrial development projects, some of
which are part of our development-for-sale program, totaling
approximately 5.5 million square feet.


As of December 31, 2003, we had one retail
land parcel and one industrial building held for divestiture.
During 2003, our dispositions and contributions totaled
$366.3 million, including assets in markets that no longer
fit our investment strategy and properties at valuations that we
considered to be at premium levels. While we will continue to
sell assets on an opportunistic basis, we believe that we have
substantially achieved our near-term strategic disposition goals.

Our own employees perform our administrative and
management functions, rather than us relying on an outside
manager for these services. Through our Strategic Alliance
Program®, we have established relationships with
third party real estate management firms, brokers and
developers, that provide property level administrative and
management services under our direction.

Our principal executive office is located at
Pier 1, Bay 1, San Francisco, California 94111;
our telephone number is (415) 394-9000. We also maintain
regional offices in Boston, Massachusetts, Chicago, Illinois,
Amsterdam, the Netherlands and Tokyo, Japan. As of
December 31, 2003, we employed 175 individuals, 126 at our
San Francisco headquarters, 45 in our Boston office and the
remainder in our other regional offices. Our website address is
www.amb.com. Our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on
Form 8-K and any amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 are available on our website
free of charge as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the
U.S. Securities and Exchange Commission. Information
contained on our website is not and should not be deemed a part
of this annual report.

Unless the context otherwise requires, the terms
we, us and our refer to AMB
Property, L.P. and our controlled subsidiaries. The following
marks are the registered trademarks of AMB Property Corporation:
AMB®; Development Alliance Partners®;
HTD®; High Throughput Distribution®;
Management Alliance Program®; Strategic Alliance
Partners®; Strategic Alliance Programs®;
and UPREIT Alliance Program®.

Operating Strategy

We base our operating strategy on extensive
operational and service offerings, including in-house
acquisitions, development, redevelopment, asset management,
leasing, finance, accounting and market research. We leverage
our expertise across a large customer base and have
long-standing relationships with entrepreneurial real estate
management and development firms in our target markets, which we
refer to as our Strategic Alliance Partners®.

We believe that real estate is fundamentally a
local business and best operated by forging alliances with
service providers in each target market. We believe that this
strategy results in a mutually beneficial relationship as these
alliance partners provide us with high-quality, local market
expertise and intelligence. We believe that we, in turn,
contribute value to the alliances through our national and
global customer relationships, industry knowledge, perspective
and financial strength. We actively manage our portfolio,
including the establishment of leasing strategies, negotiation
of lease terms, pricing, and level and timing of property
improvements.

We believe our alliances give us both local
market benefits and flexibility to focus on our core
competencies, which are developing and executing our strategic
approach to real estate investment and management and raising
private capital to finance growth.

Growth Strategies



| |                          
| | -------------------------
| | Growth Through Operations

We seek to generate long-term internal growth
through rent increases on existing space and renewals on
rollover space, by seeking to: maintain a high occupancy rate at
our properties; and control expenses by capitalizing on the
economies of owning, operating and growing a large, global
portfolio. However, during

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2003, our average industrial base rental rates
decreased by 10.1%, from the expiring rent for that space, on
leases entered into or renewed during the period. This amount
excludes expense reimbursements, rental abatements, percentage
rents and straight-line rents. Since 2001, as the industrial
market weakened, we have focused on maintaining occupancy.
During 2003, cash-basis same-store net operating income (rental
revenues less property operating expenses and real estate taxes)
decreased by 5.6% on our industrial properties. Since AMB
Property Corporations initial public offering in November
1997, we have experienced average annual increases in industrial
base rental rates of 10.4% and maintained an average occupancy
of 95.0%. While we believe that it is important to view real
estate as a long-term investment, past results are not
necessarily an indication of future performance. See
Part IV. Item 15: Note 17 of the Notes to
Consolidated Financial Statements for detailed segment
information, including revenue attributable to each segment,
gross investment in each segment and total assets.




| |                                                         
| | --------------------------------------------------------
| | Growth Through Acquisitions and Capital
    Redeployment

We believe that our significant acquisition
experience, our alliance-based operating strategy and our
extensive network of property acquisition sources will continue
to provide opportunities for external growth. We have forged
relationships with third-party local property management firms
through our Management Alliance Program®. We believe
that these alliances will create additional acquisition
opportunities, as such managers frequently market properties on
behalf of sellers. Our operating structure also enables us to
acquire properties through our UPREIT Alliance
Program® in exchange for our limited partnership
units, thereby enhancing our attractiveness to owners and
developers seeking to transfer properties on a tax-deferred
basis. In addition, we seek to redeploy capital from
non-strategic assets into properties that better fit our current
investment focus.

We are generally in various stages of
negotiations for a number of acquisitions and dispositions that
may include acquisitions and dispositions of individual
properties, acquisitions of large multi-property portfolios and
acquisitions of other real estate companies. There can be no
assurance that we will consummate any of these transactions.
Such transactions, if we consummate them, may be material
individually or in the aggregate. Sources of capital for
acquisitions may include retained cash flow from operations,
borrowings under our unsecured credit facility, other forms of
secured or unsecured debt financing, issuances of debt or
limited partnership unit offerings (including issuances of
limited partnership units by our subsidiaries), proceeds from
divestitures of properties, assumption of debt related to the
acquired properties and private capital from our co-investment
partners. See Part II. Item 7: Managements
Discussion and Analysis of Financial Condition and Results of
Operations for a summary of key transactions in 2003.



| |                           
| | --------------------------
| | Growth Through Development

We believe that development, renovation and
expansion of well-located, high-quality industrial properties
should continue to provide us with attractive investment
opportunities at a higher rate of return than we may obtain from
the purchase of existing properties. We believe we have the
in-house expertise to create value both through new construction
and through acquisition and management of value-added
properties. Value-added properties are typically characterized
as properties with available space or near-term leasing
exposure, undeveloped land acquired in connection with other
property that provides an opportunity for development or
properties that are well-located but require redevelopment or
renovation. Both new development and value-added properties
require significant management attention and capital investment
to maximize their return. In addition to our in-house
development staff, we have established strategic alliances with
global and regional developers that we expect to enhance our
development capabilities. We believe our global market presence
and expertise will enable us to continue to generate and
capitalize on a diverse range of development opportunities.

The multidisciplinary backgrounds of our
employees should provide us with the skills and experience to
capitalize on strategic renovation, expansion and development
opportunities. Several of our general partners officers
have specific experience in real estate development, both with
us and with national development firms, and over the past year
we have expanded our development staff. We pursue development
projects directly and in joint ventures with our Development
Alliance Partners®, which provides us with the
flexibility to pursue

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development projects independently or in
partnerships, depending on market conditions, submarkets or
building sites. Under a typical joint venture agreement with a
Development Alliance Partner, we would fund 95% of the
construction costs and our partner would fund 5%; however, in
certain cases we may own as little as 50% or as much as 98% of
the joint venture. Upon completion, we generally would purchase
our partners interest in the joint venture. We may also
structure developments such that we would own 100% of the asset
with an incentive development fee to be paid upon completion to
our development partner.




| |                                     
| | ------------------------------------
| | Growth Through Developments for Sale

We, through our taxable REIT subsidiaries,
conduct a variety of businesses that include incremental income
programs, such as our development projects available for sale to
third parties. Such development properties include value-added
conversion projects and build-to-sell projects.



| |                                
| | -------------------------------
| | Growth Through Global Expansion

Over the next three-to-four years, we expect to
have approximately 15% of our portfolio (based on consolidated
annualized base rent) invested in international markets. As of
December 31, 2003, our international operating properties
comprised 3.0% of our total annualized industrial base rent. Our
Mexican target markets currently include Mexico City,
Guadalajara and Monterrey. Our European target markets currently
include Paris, Amsterdam, Frankfurt, Madrid and London. Our
Asian target markets currently include Singapore, Hong Kong and
Tokyo. There are many factors that could cause our entry into
target markets and future capital allocation to differ from our
current expectations, which are discussed under the subheading
Our International Growth is Subject to Special Political
and Monetary Risks and elsewhere under the heading
Business Risks in this report. Further, it is
possible that our target markets will change over time to
reflect experience, market opportunities, customer needs and
changes in global distribution patterns. For a breakout of the
amount of our revenues attributable to the United States and to
foreign countries in total, please see Part IV.
Item 15: Note 17 of the Notes to Consolidated
Financial Statements.

We believe that expansion into target
international markets represents a natural extension of our
strategy to invest in industrial markets with high population
densities, close proximity to large customer clusters and
available labor pools, and major distribution centers serving
global trade. Our international expansion strategy mirrors our
domestic focus on supply-constrained submarkets with political,
economic or physical constraints to new development. Our
international investments will extend our offering of High
Throughput Distribution facilities for customers who value
speed-to-market over storage. Specifically, we are focused on
customers whose business is derived from global trade. In
addition, our investments target major consumer distribution
markets and customers.

We believe that our established customer
relationships, our contacts in the air cargo and logistics
industries, our underwriting of markets and investment
considerations and our Strategic Alliance Programs with
knowledgeable developers and managers will assist us in
competing internationally.



| |                              
| | -----------------------------
| | Growth Through Co-Investments

We co-invest in properties with private-capital
investors through partnerships, limited liability companies or
joint ventures. Our co-investment joint ventures typically
operate under the same investment strategy that we apply to our
other operations. Typically we will own a 20-50% interest in our
co-investment ventures. In general, we control all significant
operating and investment decisions of our co-investment
entities. We believe that our co-investment program will
continue to serve as a source of capital for acquisitions and
developments; however, there can be no assurance that it will
continue to do so. In addition, our co-investment joint ventures
are a significant source of revenues as we earn acquisition and
development fees, asset management fees and priority
distributions as well as promoted interests and incentive fees
based on the performance of the co-investment joint ventures.

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BUSINESS RISKS

See Part II. Item 7:
Managements Discussion and Analysis of Financial
Condition and Results of Operations  Business
Risks for a complete discussion of the various risks that
could adversely affect us, including risks related to our
international operations.






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

INDUSTRIAL PROPERTIES

As of December 31, 2003, we owned 948
industrial buildings aggregating approximately 87.1 million
rentable square feet, located in 34 markets throughout North
America and in France, Germany and Japan. Our industrial
properties accounted for $518.1 million, or 98.9%, of our
total annualized base rent as of December 31, 2003. Our
industrial properties were 93.1% leased to over 2,500 customers,
the largest of which accounted for no more than 3.1% of our
annualized base rent from our industrial properties. See
Item 15: Note 17 of Notes to Consolidated
Financial Statements for segment information related to
our operations.

Property
Characteristics.Our industrial
properties, which consist primarily of warehouse distribution
facilities suitable for single or multiple customers, are
typically comprised of multiple buildings. The following table
identifies type and characteristics of our industrial buildings
and each types percentage of our total portfolio based on
square footage at December 31:

|                 |  |                                                                           |  |       |  |      
|---------------- |  | ------------------------------------------------------------------------- |  | ----- |  | -----
|Building Type    |  | Description                                                               |  | 2003  |  | 2002 
|                 |  |                                                                           |  |       |  |      
|Warehouse        |  | 15,000-75,00 square feet, single or
    multi-customer                    |  | 40.7% |  | 40.2%
|Bulk Warehouse   |  | Over 75,000 square feet, single or
    multi-customer                     |  | 39.3% |  | 39.6%
|Flex Industrial  |  | Includes assembly or research &
    development, single or multi-customer |  | 7.3%  |  | 7.5% 
|Light Industrial |  | Smaller customers, 15,000 square feet or
    less, higher office finish   |  | 6.1%  |  | 6.5% 
|Trans-Shipment   |  | Unique configurations for truck terminals and
    cross-docking           |  | 2.2%  |  | 2.3% 
|Air Cargo        |  | On-tarmac or airport land for transfer of air
    cargo goods             |  | 3.1%  |  | 2.6% 
|Office           |  | Single or multi-customer, used strictly for office                        |  | 1.3%  |  | 1.3% 

Lease Terms.Our
industrial properties are typically subject to lease on a
triple net basis, in which customers pay their
proportionate share of real estate taxes, insurance and
operating costs, or are subject to leases on a modified
gross basis, in which customers pay expenses over certain
threshold levels. In addition, most of our leases include fixed
rental increases or Consumer Price Index rental increases. Lease
terms typically range from three to ten years, with an average
of six years, excluding renewal options. However, the majority
of our industrial leases do not include renewal options.

Overview of Major Target
Markets.Our industrial properties are
typically located near major airports, key interstate highways,
and seaports in major domestic metropolitan areas, such as
Atlanta, Chicago, Dallas/ Fort Worth, Los Angeles, Northern
New Jersey/ New York City, the San Francisco Bay Area,
Miami and Seattle. Our international industrial facilities are
located in major distribution markets, including Mexico City,
Guadalajara, Paris, Frankfurt and Tokyo.

Within these metropolitan areas, our industrial
properties are generally concentrated in locations with limited
new construction opportunities within established, relatively
large submarkets, which we believe should provide a higher rate
of occupancy and rent growth than properties located elsewhere.
These in-fill locations are typically near major airports,
seaports or convenient to major highways and rail lines, and are
proximate to large and diverse labor pools. There is typically
broad demand for industrial space in these centrally located
submarkets typically due to a diverse mix of industries and
types of industrial uses, including warehouse distribution,
light assembly and manufacturing. We generally avoid locations
at the periphery of metropolitan areas where there are fewer
constraints to the supply of additional industrial properties.

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Industrial Market Operating Statistics
(1)

As of December 31, 2003, we operated in 34
markets throughout North America and in France, Germany and
Japan. The following table represents properties in which we own
a 100% interest or a controlling interest (consolidated), and
excludes properties in which we only own a non-controlling
interest (unconsolidated) and properties under development:

|                                          |                                 |                      |           |         |           |           |            |            |           |          |           |               |           |    |            |      |           |   |           |     |           |    |            |      |           |   
|----------------------------------------- | ------------------------------- | -------------------- | --------- | ------- | --------- | --------- | ---------- | ---------- | --------- | -------- | --------- | ------------- | --------- | -- | ---------- | ---- | --------- | - | --------- | --- | --------- | -- | ---------- | ---- | --------- | --
|                                          |                                 |                      |           |         |           |           |            |            |           | No. New  |           |              
|                                          |                                 |                      |           |         |           | Dallas/   |            | Los        |           | Jersey/  |           | San Francisco
|                                          |                                 | Atlanta              |           | Chicago |           | Ft. Worth |            | Angeles(2) |           | New York |           | Bay Area     
|                                          |                                 |                      |           |         |           |           |            |            |           |          |           |              
|Number of buildings                       |                                 |                      | 57        |         |           |           | 94         |            |           |          | 42        |               |           |    | 150        |      |           |   | 92        |     |           |    | 141        |     
|Rentable square feet                      |                                 |                      | 7,053,878 |         |           |           | 7,810,008  |            |           |          | 3,854,932 |               |           |    | 12,950,949 |      |           |   | 7,923,272 |     |           |    | 11,382,570 |     
|                                          | % of total rentable square feet |                      |           | 8.1     | %         |           |            | 9.0        | %         |          |           | 4.4           | %         |    |            | 14.9 | %         |   |           | 9.1 | %         |    |            | 13.1 | %        
|Occupancy percentage                      |                                 |                      | 92.9      | %       |           |           | 93.0       | %          |           |          | 85.6      | %             |           |    | 98.0       | %    |           |   | 91.7      | %   |           |    | 92.5       | %   
|Annualized base rent (000s)              |                                 | $                    | 26,970    |         |           | $         | 35,810     |            |           | $        | 13,456    |               |           | $  | 77,450     |      |           | $ | 47,770    |     |           | $  | 81,474     |     
|                                          | % of total annualized base rent |                      |           | 5.2     | %         |           |            | 6.9        | %         |          |           | 2.6           | %         |    |            | 14.9 | %         |   |           | 9.2 | %         |    |            | 15.7 | %        
|Number of leases                          |                                 |                      | 204       |         |           |           | 187        |            |           |          | 112       |               |           |    | 384        |      |           |   | 291       |     |           |    | 400        |     
|Annualized base rent per square foot      |                                 | $                    | 4.12      |         |           | $         | 4.93       |            |           | $        | 4.08      |               |           | $  | 6.10       |      |           | $ | 6.57      |     |           | $  | 7.74       |     
|Lease expirations as a % of ABR:(4)       |                                 |                      |           |         |           |           |            |            |           |          |           |               |           |    |            |      |           |   |           |     |           |    |            |     
|                                          |                                 | 2004                 |           |         | 14.4      | %         |            |            | 22.4      | %        |           |               | 20.4      | %  |            |      | 21.1      | % |           |     | 20.2      | %  |            |      | 15.0      | % 
|                                          |                                 | 2005                 |           |         | 19.8      | %         |            |            | 19.9      | %        |           |               | 22.5      | %  |            |      | 14.8      | % |           |     | 11.4      | %  |            |      | 22.6      | % 
|                                          |                                 | 2006                 |           |         | 18.6      | %         |            |            | 18.9      | %        |           |               | 14.2      | %  |            |      | 16.9      | % |           |     | 15.9      | %  |            |      | 10.3      | % 
|Weighted average lease terms:             |                                 |                      |           |         |           |           |            |            |           |          |           |               |           |    |            |      |           |   |           |     |           |    |            |     
|                                          |                                 | Original             |           |         | 6.2 years |           |            |            | 6.6 years |          |           |               | 5.0 years |    |            |      | 5.9 years |   |           |     | 5.6 years |    |            |      | 5.4 years |   
|                                          |                                 | Remaining            |           |         | 3.6 years |           |            |            | 2.3 years |          |           |               | 3.1 years |    |            |      | 3.0 years |   |           |     | 3.4 years |    |            |      | 3.1 years |   
|Tenant retention:                         |                                 |                      |           |         |           |           |            |            |           |          |           |               |           |    |            |      |           |   |           |     |           |    |            |     
|                                          |                                 | Quarter              |           |         | 50.2      | %         |            |            | 85.7      | %        |           |               | 46.9      | %  |            |      | 87.8      | % |           |     | 98.1      | %  |            |      | 64.1      | % 
|                                          |                                 | Year-to-date         |           |         | 68.5      | %         |            |            | 63.0      | %        |           |               | 50.8      | %  |            |      | 70.6      | % |           |     | 83.0      | %  |            |      | 66.3      | % 
|Rent increases on renewals and rollovers: |                                 |                      |           |         |           |           |            |            |           |          |           |               |           |    |            |      |           |   |           |     |           |    |            |     
|                                          |                                 | Year-to-date         |           |         | (10.4     | )%        |            |            | (4.3      | )%       |           |               | (7.6      | )% |            |      | 0.0       | % |           |     | (9.9      | )% |            |      | (27.7     | )%
|                                          |                                 | Same Space SF leased |           |         | 828,797   |           |            |            | 2,023,590 |          |           |               | 1,236,952 |    |            |      | 2,560,211 |   |           |     | 1,601,083 |    |            |      | 3,167,662 |   
|Same store cash basis NOI growth:         |                                 |                      |           |         |           |           |            |            |           |          |           |               |           |    |            |      |           |   |           |     |           |    |            |     
|                                          |                                 | Year-to-date         |           |         | (4.3      | )%        |            |            | (7.9      | )%       |           |               | (23.0     | )% |            |      | 6.1       | % |           |     | (6.2      | )% |            |      | (13.9     | )%
|Sq. feet owned in same store pool(5)      |                                 |                      | 5,532,840 |         |           |           | 7,242,118  |            |           |          | 3,413,679 |               |           |    | 11,495,700 |      |           |   | 5,726,021 |     |           |    | 10,860,049 |     
|Our pro rata share of square feet         |                                 |                      | 4,415,192 |         |           |           | 5,782,826  |            |           |          | 2,765,994 |               |           |    | 9,247,359  |      |           |   | 5,002,948 |     |           |    | 8,653,249  |     
|Total market square footage(6)            |                                 |                      | 7,586,128 |         |           |           | 12,062,539 |            |           |          | 4,595,219 |               |           |    | 16,716,976 |      |           |   | 8,578,109 |     |           |    | 12,014,032 |     

[Additional columns below]

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

|                                          |                                 |                      |           |         |           |           |           |             |           |             |           |          |           |   |            |      |            |    |            |      |           |   |             |       |            |   
|----------------------------------------- | ------------------------------- | -------------------- | --------- | ------- | --------- | --------- | --------- | ----------- | --------- | ----------- | --------- | -------- | --------- | - | ---------- | ---- | ---------- | -- | ---------- | ---- | --------- | - | ----------- | ----- | ---------- | --
|                                          |                                 |                      |           |         |           |           |           | Total       |           |             |           |         
|                                          |                                 |                      |           |         |           |           |           | U.S. Hub    |           |             |           | Total/  
|                                          |                                 |                      |           |         |           | On-       |           | and Gateway |           | Total Other |           | Weighted
|                                          |                                 | Miami                |           | Seattle |           | Tarmac(3) |           | Markets     |           | Markets     |           | Average 
|                                          |                                 |                      |           |         |           |           |           |             |           |             |           |         
|Number of buildings                       |                                 |                      | 46        |         |           |           | 64        |             |           |             | 35        |          |           |   | 721        |      |            |    | 227        |      |           |   | 948         |      
|Rentable square feet                      |                                 |                      | 4,802,715 |         |           |           | 6,854,427 |             |           |             | 2,733,487 |          |           |   | 65,366,238 |      |            |    | 21,735,174 |      |           |   | 87,101,412  |      
|                                          | % of total rentable square feet |                      |           | 5.5     | %         |           |           | 7.9         | %         |             |           | 3.0      | %         |   |            | 75.0 | %          |    |            | 25.0 | %         |   |             | 100.0 | %         
|Occupancy percentage                      |                                 |                      | 96.1      | %       |           |           | 92.5      | %           |           |             | 92.6      | %        |           |   | 93.5       | %    |            |    | 91.9       | %    |           |   | 93.1        | %    
|Annualized base rent (000s)              |                                 | $                    | 32,745    |         |           | $         | 33,737    |             |           | $           | 45,931    |          |           | $ | 395,343    |      |            |    | 122,747    |      |           | $ | 518,090     |      
|                                          | % of total annualized base rent |                      |           | 6.4     | %         |           |           | 6.5         | %         |             |           | 8.9      | %         |   |            | 76.3 | %          |    |            | 23.7 | %         |   |             | 100.0 | %         
|Number of leases                          |                                 |                      | 230       |         |           |           | 261       |             |           |             | 257       |          |           |   | 2,326      |      |            |    | 851        |      |           |   | 3,177       |      
|Annualized base rent per square foot      |                                 | $                    | 7.09      |         |           | $         | 5.32      |             |           | $           | 18.15     |          |           | $ | 6.47       |      |            | $  | 6.15       |      |           | $ | 6.39        |      
|Lease expirations as a % of ABR:(4)       |                                 |                      |           |         |           |           |           |             |           |             |           |          |           |   |            |      |            |    |            |      |           |   |             |      
|                                          |                                 | 2004                 |           |         | 17.7      | %         |           |             | 15.3      | %           |           |          | 21.4      | % |            |      | 18.6       | %  |            |      | 15.4      | % |             |       | 17.8       | % 
|                                          |                                 | 2005                 |           |         | 21.2      | %         |           |             | 14.7      | %           |           |          | 11.1      | % |            |      | 17.3       | %  |            |      | 17.9      | % |             |       | 17.4       | % 
|                                          |                                 | 2006                 |           |         | 17.0      | %         |           |             | 18.8      | %           |           |          | 14.0      | % |            |      | 15.4       | %  |            |      | 10.8      | % |             |       | 14.3       | % 
|Weighted average lease terms:             |                                 |                      |           |         |           |           |           |             |           |             |           |          |           |   |            |      |            |    |            |      |           |   |             |      
|                                          |                                 | Original             |           |         | 5.9 years |           |           |             | 5.8 years |             |           |          | 8.3 years |   |            |      | 5.9 years  |    |            |      | 6.6 years |   |             |       | 6.1 years  |   
|                                          |                                 | Remaining            |           |         | 3.0 years |           |           |             | 3.1 years |             |           |          | 4.1 years |   |            |      | 3.1 years  |    |            |      | 3.6 years |   |             |       | 3.2 years  |   
|Tenant retention:                         |                                 |                      |           |         |           |           |           |             |           |             |           |          |           |   |            |      |            |    |            |      |           |   |             |      
|                                          |                                 | Quarter              |           |         | 44.1      | %         |           |             | 70.5      | %           |           |          | 78.7      | % |            |      | 72.1       | %  |            |      | 63.3      | % |             |       | 70.4       | % 
|                                          |                                 | Year-to-date         |           |         | 71.9      | %         |           |             | 56.4      | %           |           |          | 79.0      | % |            |      | 66.4       | %  |            |      | 61.6      | % |             |       | 65.3       | % 
|Rent increases on renewals and rollovers: |                                 |                      |           |         |           |           |           |             |           |             |           |          |           |   |            |      |            |    |            |      |           |   |             |      
|                                          |                                 | Year-to-date         |           |         | (14.3     | )%        |           |             | (5.0      | )%          |           |          | 7.9       | % |            |      | (12.7      | )% |            |      | 1.7       | % |             |       | (10.1      | )%
|                                          |                                 | Same Space SF leased |           |         | 884,115   |           |           |             | 1,196,855 |             |           |          | 136,785   |   |            |      | 13,636,050 |    |            |      | 3,636,967 |   |             |       | 17,273,017 |   
|Same store cash basis NOI growth:         |                                 |                      |           |         |           |           |           |             |           |             |           |          |           |   |            |      |            |    |            |      |           |   |             |      
|                                          |                                 | Year-to-date         |           |         | (11.7     | )%        |           |             | (7.6      | )%          |           |          | 5.0       | % |            |      | (7.2       | )% |            |      | 0.1       | % |             |       | (5.6       | )%
|Sq. feet owned in same store pool(5)      |                                 |                      | 4,342,301 |         |           |           | 3,636,191 |             |           |             | 1,324,738 |          |           |   | 53,573,637 |      |            |    | 18,411,938 |      |           |   | 71,985,575  |      
|Our pro rata share of square feet         |                                 |                      | 4,175,271 |         |           |           | 3,596,230 |             |           |             | 2,344,839 |          |           |   | 45,983,908 |      |            |    | 18,592,025 |      |           |   | 64,575,933  |      
|Total market square footage(6)            |                                 |                      | 5,639,822 |         |           |           | 7,030,412 |             |           |             |          |          |           |   | 74,223,237 |      |            |    | 27,297,815 |      |           |   | 101,521,052 |      



---

|    |                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes all industrial consolidated operating
    properties and excludes industrial developments and renovation
    projects.                                                                                                                                                                                                              
|(2) | We also have a 19.9 acre parking lot with
    2,720 parking spaces and 12 billboard signs in the Los Angeles
    market immediately adjacent to the Los Angeles International
    Airport.                                                                                                                                                   
|(3) | Includes on-tarmac air cargo facilities at 14
    airports.                                                                                                                                                                                                                                                                                  
|(4) | Annualized base rent is calculated as monthly
    base rent (cash basis) per the terms of the lease, as of
    December 31, 2003, multiplied by 12.                                                                                                                                                                                          
|(5) | Same store pool excludes properties purchased or
    developments stabilized after December 31, 2001. Stabilized
    properties are generally defined as properties that are 90%
    leased or properties for which we have held a certificate of
    occupancy or where building has been substantially complete for
    at least 12 months.
|(6) | Total market square footage includes industrial
    and retail operating properties, development properties,
    unconsolidated properties (100% of the square footage),
    properties managed for third parties and reallocation of
    on-tarmac properties into metro markets.                                                           

6



---



##### Table of Contents



Industrial Operating Portfolio
Overview

As of December 31, 2003, our 948 industrial
buildings were diversified across 34 markets throughout North
America and in France, Germany and Japan. The average age of our
industrial properties is 19 years (since the property was
built or substantially renovated). The following table
represents properties in which we own a fee simple interest or a
controlling interest (consolidated), and excludes properties in
which we only own a non-controlling interest (unconsolidated):

|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       |  |       |      |      | 
|----------------------- | ------------------------------- | -------------------------- | -------------------------- | ----------------------- | -- | ----------- | ---------- | ---------- | --------- | ---------- | ---------- | ---------- | --- | --------- | ----- | ------------- | ----- | ---- | ------- | - | ------ | ------- | ------- | - | --- | ---- | ----- | - | --- | --- | ----- |  | ----- | ---- | ---- | 
|                        |                                 | Number                     |                            | Rentable                |    | % of Total  |            |            |           | Annualized |            | % of Total |     |           |       | Annualized   
|                        |                                 | of                         |                            | Square                  |    | Rentable    |            | Occupancy  |           | Base Rent  |            | Annualized |     | Number    |       | Base Rent per
|                        |                                 | Buildings                  |                            | Feet                    |    | Square Feet |            | Percentage |           | (000s)    |            | Base Rent  |     | of Leases |       | Square Foot  
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |              
|Domestic Hub Markets    |                                 |                            | 721                        |                         |    |             | 65,366,238 |            |           |            | 75.0       | %          |     |           | 93.5  | %             |       | $    | 395,343 |   |        |         | 76.3    | % |     |      | 2,326 |   |     | $   | 6.47  | 
|Other Markets           |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|Domestic Target Markets |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|                        |                                 | Austin                     |                            |                         | 9  |             |            |            | 1,365,873 |            |            |            | 1.6 |           |       |               | 91.4  |      |         |   | 8,988  |         |         |   | 1.7 |      |       |   | 29  |     |       |  | 7.20  |     
|                        |                                 | Baltimore/ Washington DC   |                            |                         | 65 |             |            |            | 4,262,420 |            |            |            | 4.9 |           |       |               | 95.3  |      |         |   | 32,299 |         |         |   | 6.2 |      |       |   | 292 |     |       |  | 7.95  |     
|                        |                                 | Boston                     |                            |                         | 36 |             |            |            | 4,114,945 |            |            |            | 4.7 |           |       |               | 97.2  |      |         |   | 22,667 |         |         |   | 4.4 |      |       |   | 61  |     |       |  | 5.67  |     
|                        |                                 | Minneapolis                |                            |                         | 34 |             |            |            | 3,819,952 |            |            |            | 4.4 |           |       |               | 96.1  |      |         |   | 16,553 |         |         |   | 3.2 |      |       |   | 185 |     |       |  | 4.51  |     
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|                        |                                 |                            | Subtotal/ Weighted Average |                         |    | 144         |            |            |           | 13,563,190 |            |            |     | 15.6      |       |               |       | 95.7 |         |   |        | 80,507  |         |   |     | 15.5 |       |   |     | 567 |       |  |       | 6.20 |     
|                        | Domestic Non-Target Markets     |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       |  |      
|                        |                                 | Charlotte                  |                            |                         | 21 |             |            |            | 1,317,864 |            |            |            | 1.5 |           |       |               | 70.2  |      |         |   | 5,038  |         |         |   | 1.0 |      |       |   | 59  |     |       |  | 5.45  |     
|                        |                                 | Columbus                   |                            |                         | 1  |             |            |            | 240,000   |            |            |            | 0.3 |           |       |               | 45.0  |      |         |   | 306    |         |         |   | 0.1 |      |       |   | 3   |     |       |  | 2.83  |     
|                        |                                 | Memphis                    |                            |                         | 17 |             |            |            | 1,883,845 |            |            |            | 2.1 |           |       |               | 82.7  |      |         |   | 8,016  |         |         |   | 1.5 |      |       |   | 46  |     |       |  | 5.15  |     
|                        |                                 | New Orleans                |                            |                         | 5  |             |            |            | 411,689   |            |            |            | 0.5 |           |       |               | 93.9  |      |         |   | 1,949  |         |         |   | 0.4 |      |       |   | 47  |     |       |  | 5.04  |     
|                        |                                 | Newport News               |                            |                         | 1  |             |            |            | 60,215    |            |            |            | 0.1 |           |       |               | 76.8  |      |         |   | 554    |         |         |   | 0.1 |      |       |   | 2   |     |       |  | 11.98 |     
|                        |                                 | Orlando                    |                            |                         | 15 |             |            |            | 1,223,148 |            |            |            | 1.4 |           |       |               | 97.7  |      |         |   | 5,433  |         |         |   | 1.0 |      |       |   | 72  |     |       |  | 4.55  |     
|                        |                                 | Portland                   |                            |                         | 5  |             |            |            | 676,104   |            |            |            | 0.8 |           |       |               | 95.4  |      |         |   | 2,966  |         |         |   | 0.6 |      |       |   | 9   |     |       |  | 4.60  |     
|                        |                                 | San Diego                  |                            |                         | 5  |             |            |            | 276,167   |            |            |            | 0.3 |           |       |               | 100.0 |      |         |   | 2,866  |         |         |   | 0.5 |      |       |   | 21  |     |       |  | 10.38 |     
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|                        |                                 | Subtotal/ Weighted Average |                            |                         | 70 |             |            |            | 6,089,032 |            |            |            | 7.0 |           |       |               | 84.4  |      |         |   | 27,128 |         |         |   | 5.2 |      |       |   | 259 |     |       |  | 5.28  |     
|                        | International Target Markets(1) |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       |  |      
|                        |                                 | Frankfurt, Germany         |                            |                         | 1  |             |            |            | 166,917   |            |            |            | 0.2 |           |       |               | 0.0   |      |         |   |       |         |         |   | 0.0 |      |       |   | 0   |     |       |  |      |     
|                        |                                 | Guadalajara, Mexico        |                            |                         | 5  |             |            |            | 687,088   |            |            |            | 0.8 |           |       |               | 100.0 |      |         |   | 4,053  |         |         |   | 0.8 |      |       |   | 16  |     |       |  | 5.90  |     
|                        |                                 | Mexico City, Mexico        |                            |                         | 2  |             |            |            | 345,058   |            |            |            | 0.4 |           |       |               | 100.0 |      |         |   | 1,991  |         |         |   | 0.4 |      |       |   | 3   |     |       |  | 5.77  |     
|                        |                                 | Paris, France              |                            |                         | 3  |             |            |            | 520,837   |            |            |            | 0.6 |           |       |               | 88.5  |      |         |   | 4,025  |         |         |   | 0.8 |      |       |   | 3   |     |       |  | 8.73  |     
|                        |                                 | Tokyo, Japan               |                            |                         | 2  |             |            |            | 363,052   |            |            |            | 0.4 |           |       |               | 100.0 |      |         |   | 5,043  |         |         |   | 1.0 |      |       |   | 3   |     |       |  | 13.89 |     
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|                        |                                 |                            | Subtotal/ Weighted Average |                         |    | 13          |            |            |           | 2,082,952  |            |            |     | 2.4       |       |               |       | 89.1 |         |   |        | 15,112  |         |   |     | 3.0  |       |   |     | 25  |       |  |       | 8.14 |     
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|                        |                                 |                            | Total Other Markets        |                         |    | 227         |            |            |           | 21,735,174 |            |            |     | 25.0      |       |               |       | 91.9 |         |   |        | 122,747 |         |   |     | 23.7 |       |   |     | 851 |       |  |       | 6.15 |     
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 
|                        |                                 |                            |                            | Total/ Weighted Average |    |             | 948        |            |           |            | 87,101,412 |            |     |           | 100.0 | %             |       |      | 93.1    | % |        | $       | 518,090 |   |     |      | 100.0 | % |     |     | 3,177 |  |       | $    | 6.39 | 
|                        |                                 |                            |                            |                         |    |             |            |            |           |            |            |            |     |           |       |               |       |      |         |   |        |         |         |   |     |      |       |   |     |     |       | 



---



|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Annualized base rent for leases denominated in
    foreign currencies is translated using the currency exchange
    rate at December 31, 2003.

7



---



##### Table of Contents



Industrial Lease Expirations

The following table summarizes the lease
expirations for our industrial properties for leases in place as
of December 31, 2003, without giving effect to the exercise
of renewal options or termination rights, if any, at or prior to
the scheduled expirations:

|                |  |         |            |            |  |            |         |  |  |  |       |  
|--------------- |  | ------- | ---------- | ---------- |  | ---------- | ------- |  |  |  | ----- | -
|                |  |         |            | Annualized |  | % of      
|                |  | Square  |            | Base       |  | Annualized
|                |  | Feet(1) |            | Rent(2)    |  | Base Rent 
|                |  |         |            |            |  |           
|2004            |  |         | 15,073,481 |            |  | $          | 97,194  |  |  |  | 17.8  | %
|2005            |  |         | 14,866,366 |            |  |            | 95,429  |  |  |  | 17.4  | %
|2006            |  |         | 12,384,981 |            |  |            | 78,363  |  |  |  | 14.3  | %
|2007            |  |         | 10,898,668 |            |  |            | 72,560  |  |  |  | 13.3  | %
|2008            |  |         | 10,452,586 |            |  |            | 64,433  |  |  |  | 11.8  | %
|2009            |  |         | 6,880,585  |            |  |            | 39,045  |  |  |  | 7.1   | %
|2010            |  |         | 2,876,654  |            |  |            | 27,515  |  |  |  | 5.0   | %
|2011            |  |         | 3,032,522  |            |  |            | 23,456  |  |  |  | 4.3   | %
|2012            |  |         | 1,900,671  |            |  |            | 21,816  |  |  |  | 4.0   | %
|2013 and beyond |  |         | 3,177,618  |            |  |            | 27,209  |  |  |  | 5.0   | %
|                |  |         |            |            |  |            |         |  |  |  |       |  
|Total           |  |         | 81,544,132 |            |  | $          | 547,020 |  |  |  | 100.0 | %
|                |  |         |            |            |  |            |         |  |  |  |       |  



---



|    |                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Schedule includes in-place leases and leases with
    future commencement dates. The schedule also includes
    month-to-month leases totaling 0.2 million square feet and
    leases in hold-over status totaling 1.9 million square feet.
|   
|(2) | Calculated as monthly base rent at expiration
    multiplied by 12.                                                                                                                                                                        

8



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##### Table of Contents



Customer Information

Largest Property Customers.As of December 31, 2003, our 25
largest industrial property customers by annualized base rent
are set forth in the table below:

|                                  |       |           |    |             |  |               |           |            |  |               |     |      |   |   |        |        |  |  |     |      |  
|--------------------------------- | ----- | --------- | -- | ----------- |  | ------------- | --------- | ---------- |  | ------------- | --- | ---- | - | - | ------ | ------ |  |  | --- | ---- | -
|                                  |       |           |    |             |  | Percentage of |           |            |  | Percentage of
|                                  |       |           |    |             |  | Aggregate     |           |            |  | Aggregate    
|                                  |       |           |    | Aggregate   |  | Leased        |           | Annualized |  | Annualized   
|                                  |       | Number of |    | Rentable    |  | Square        |           | Base       |  | Base         
|Customer Name(1)                  |       | Leases    |    | Square Feet |  | Feet(2)       |           | Rent(3)    |  | Rent(4)      
|                                  |       |           |    |             |  |               |           |            |  |              
|United States Government(5)(6)    |       |           | 41 |             |  |               | 866,387   |            |  |               | 1.0 | %    |   | $ | 16,007 |        |  |  | 3.1 | %   
|FedEx Corporation(5)              |       |           | 31 |             |  |               | 704,202   |            |  |               | 0.8 | %    |   |   | 9,765  |        |  |  | 1.9 | %   
|Deutsche Post Global Mail Ltd.(5) |       |           | 33 |             |  |               | 1,021,765 |            |  |               | 1.2 | %    |   |   | 8,159  |        |  |  | 1.6 | %   
|Harmonic Inc.                     |       |           | 4  |             |  |               | 285,480   |            |  |               | 0.3 | %    |   |   | 6,174  |        |  |  | 1.2 | %   
|International Paper Company       |       |           | 8  |             |  |               | 546,893   |            |  |               | 0.6 | %    |   |   | 4,213  |        |  |  | 0.8 | %   
|BAX Global Inc.(5)                |       |           | 8  |             |  |               | 255,135   |            |  |               | 0.3 | %    |   |   | 4,130  |        |  |  | 0.8 | %   
|County of Los Angeles(7)          |       |           | 11 |             |  |               | 213,230   |            |  |               | 0.2 | %    |   |   | 3,123  |        |  |  | 0.6 | %   
|Ford Motor Company                |       |           | 1  |             |  |               | 610,878   |            |  |               | 0.7 | %    |   |   | 3,034  |        |  |  | 0.6 | %   
|Forward Air Corporation           |       |           | 9  |             |  |               | 421,748   |            |  |               | 0.5 | %    |   |   | 2,883  |        |  |  | 0.6 | %   
|Ahold NV                          |       |           | 7  |             |  |               | 680,565   |            |  |               | 0.8 | %    |   |   | 2,880  |        |  |  | 0.6 | %   
|La Poste                          |       |           | 1  |             |  |               | 353,640   |            |  |               | 0.4 | %    |   |   | 2,676  |        |  |  | 0.5 | %   
|CNF Inc.                          |       |           | 12 |             |  |               | 408,556   |            |  |               | 0.5 | %    |   |   | 2,662  |        |  |  | 0.5 | %   
|Wells Fargo and Company           |       |           | 5  |             |  |               | 213,432   |            |  |               | 0.2 | %    |   |   | 2,585  |        |  |  | 0.5 | %   
|United Air Lines Inc.(5)          |       |           | 5  |             |  |               | 124,700   |            |  |               | 0.1 | %    |   |   | 2,506  |        |  |  | 0.5 | %   
|United Liquors, Ltd.              |       |           | 2  |             |  |               | 520,325   |            |  |               | 0.6 | %    |   |   | 2,398  |        |  |  | 0.5 | %   
|Worldwide Flight Services(5)      |       |           | 15 |             |  |               | 176,656   |            |  |               | 0.2 | %    |   |   | 2,374  |        |  |  | 0.5 | %   
|Integrated Airline Services(5)    |       |           | 6  |             |  |               | 217,056   |            |  |               | 0.2 | %    |   |   | 2,210  |        |  |  | 0.4 | %   
|Applied Materials, Inc.           |       |           | 1  |             |  |               | 290,557   |            |  |               | 0.3 | %    |   |   | 2,152  |        |  |  | 0.4 | %   
|Elmhult Limited Partnership       |       |           | 4  |             |  |               | 661,149   |            |  |               | 0.8 | %    |   |   | 2,104  |        |  |  | 0.4 | %   
|Rite Aid Corporation              |       |           | 2  |             |  |               | 526,631   |            |  |               | 0.6 | %    |   |   | 2,088  |        |  |  | 0.4 | %   
|Expeditors International          |       |           | 4  |             |  |               | 232,976   |            |  |               | 0.3 | %    |   |   | 2,087  |        |  |  | 0.4 | %   
|DJ Air Services, Inc.(5)          |       |           | 1  |             |  |               | 51,920    |            |  |               | 0.1 | %    |   |   | 2,054  |        |  |  | 0.4 | %   
|TJX Companies, Inc.               |       |           | 2  |             |  |               | 532,657   |            |  |               | 0.6 | %    |   |   | 2,051  |        |  |  | 0.4 | %   
|EGL Eagle Global Logistics, L.P.  |       |           | 4  |             |  |               | 328,445   |            |  |               | 0.4 | %    |   |   | 2,040  |        |  |  | 0.4 | %   
|Corvis Corporation                |       |           | 5  |             |  |               | 151,878   |            |  |               | 0.2 | %    |   |   | 1,958  |        |  |  | 0.4 | %   
|                                  |       |           |    |             |  |               |           |            |  |               |     |      |   |   |        |        |  |  |     |     
|                                  | Total |           |    |             |  |               |           | 10,396,861 |  |               |     | 11.9 | % |   | $      | 94,313 |  |  |     | 18.0 | %
|                                  |       |           |    |             |  |               |           |            |  |               |     |      |   |   |        |        |  |  |     |     



---



|    |                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Customer(s) may be a subsidiary of or an entity
    affiliated with the named customer. We also have a lease at our
    Park One property adjacent to the Los Angeles International
    Airport with an annualized base rent of $6.1 million, which is
    not included.
|   
|(2) | Computed as aggregate leased square feet divided
    by the aggregate leased square feet of the industrial and retail
    properties.                                                                                                                                   
|   
|(3) | Annualized base rent is calculated as monthly
    base rent (cash basis) per the lease, as of December 31,
    2003, multiplied by 12.                                                                                                                                  
|   
|(4) | Computed as aggregate annualized base rent
    divided by the aggregate annualized base rent of the industrial
    and retail and other properties.                                                                                                                     
|   
|(5) | Apron rental amounts (but not square footage) are
    included.                                                                                                                                                                                                         

9



---



##### Table of Contents





|    |                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | United States Government includes the United
    States Postal Service, United States Customs and the United
    Stated Department of Agriculture.                                   
|   
|(7) | County of Los Angeles includes Child Support
    Services Department, the Fire Department, the District
    Attorney, the Sheriffs Department, and the Unified School
    District.

OPERATING AND LEASING STATISTICS

Industrial Operating and Leasing
Statistics

The following table summarizes key operating and
leasing statistics for all of our industrial properties as of
and for the years ended December 31, 2003, 2002 and 2001:

|                                    |                                                              |             |                  |           |      |      |            |           |      |      |            |           |      |      | 
|----------------------------------- | ------------------------------------------------------------ | ----------- | ---------------- | --------- | ---- | ---- | ---------- | --------- | ---- | ---- | ---------- | --------- | ---- | ---- | 
|Operating Portfolio(1)              |                                                              | 2003        |                  | 2002      |      | 2001
|                                    |                                                              |             |                  |           |      |     
|Square feet owned(2)                |                                                              |             | 87,101,412       |           |      |      | 84,203,022 |           |      |      | 81,550,880 |          
|Occupancy percentage                |                                                              |             | 93.1             | %         |      |      | 94.6       | %         |      |      | 94.5       | %        
|Weighted average lease terms:       |                                                              |             |                  |           |      |      |            |           |      |      |            |          
|                                    | Original                                                     |             |                  | 6.1 years |      |      |            | 6.2 years |      |      |            | 6.3 years |     
|                                    | Remaining                                                    |             |                  | 3.2 years |      |      |            | 3.3 years |      |      |            | 3.3 years |     
|Tenant retention                    |                                                              |             | 65.3             | %         |      |      | 74.2       | %         |      |      | 66.8       | %        
|Same Space Leasing Activity(3):     |                                                              |             |                  |           |      |      |            |           |      |      |            |          
|                                    | Rent increases/(decreases) on renewals and
    rollovers     |             |                  | (10.1     | )%   |      |            | (1.0      | )%   |      |            | 20.4      | %   
|                                    | Same space square footage commencing (millions)              |             |                  | 17.3      |      |      |            | 14.7      |      |      |            | 11.9      |     
|Second Generation Leasing Activity: |                                                              |             |                  |           |      |      |            |           |      |      |            |          
|                                    | Tenant improvements and leasing commissions per
    sq. ft.: |             |                  |           |      |      |            |           |      |      |            |           |     
|                                    |                                                              | Renewals    |                  | $         | 1.39 |      |            | $         | 1.30 |      |            | $         | 0.99 |     
|                                    |                                                              | Re-tenanted |                  |           | 2.13 |      |            |           | 2.45 |      |            |           | 3.25 |     
|                                    |                                                              |             |                  |           |      |      |            |           |      |      |            |          
|                                    |                                                              |             | Weighted average |           | $    | 1.77 |            |           | $    | 1.90 |            |           | $    | 2.05 | 
|                                    |                                                              |             |                  |           |      |      |            |           |      |      |            |          
|                                    | Square footage commencing (millions)                         |             |                  | 22.7      |      |      |            | 19.0      |      |      |            | 13.9      |     



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes all consolidated industrial operating
    properties and excludes industrial development and renovation
    projects. Excludes retail and other properties square
    footage of 0.5 million with occupancy of 75.2% and
    annualized base rents of $5.5 million as of
    December 31, 2003.                                                                                               
|   
|(2) | In addition to owned square feet as of
    December 31, 2003, we managed, through our subsidiary, AMB
    Capital Partners, LLC, 0.5 million additional square feet
    of industrial, retail and other properties. As of
    December 31, 2003, we also had investments in
    7.9 million square feet of industrial operating properties
    through our investments in unconsolidated joint ventures.
|   
|(3) | Consists of second-generation leases renewing or
    re-tenanting with current and prior lease terms greater than one
    year.                                                                                                                                                                                                                                                                         

10



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##### Table of Contents



Industrial Same Store Operating
Statistics

The following table summarizes key operating and
leasing statistics for our same store properties as of and for
the years ended December 31, 2003, 2002 and 2001:

|                                                                  |                                   |      |            |      |    |      |            |      |   |  |            |      |  
|----------------------------------------------------------------- | --------------------------------- | ---- | ---------- | ---- | -- | ---- | ---------- | ---- | - |  | ---------- | ---- | -
|                                                                  |                                   | 2003 |            | 2002 |    | 2001
|                                                                  |                                   |      |            |      |    |     
|Square feet in same store pool(1)                                 |                                   |      | 71,985,575 |      |    |      | 67,998,585 |      |   |  | 60,165,437 |     
|                                                                  | % of total industrial square feet |      |            | 82.6 | %  |      |            | 80.8 | % |  |            | 73.8 | %
|Occupancy percentage at period end                                |                                   |      | 93.0       | %    |    |      | 94.6       | %    |   |  | 94.6       | %   
|Tenant retention                                                  |                                   |      | 65.1       | %    |    |      | 73.3       | %    |   |  | 64.5       | %   
|Rent increases/(decreases) on renewals and
    rollovers          |                                   |      | (10.6      | )%   |    |      | (1.4       | )%   |   |  | 23.5       | %   
|                                                                  | Square feet leased (millions)     |      |            | 16.2 |    |      |            | 13.8 |   |  |            | 10.0 |  
|Growth % increase/(decrease) (excluding
    straight-line rents): |                                   |      |            |      |    |      |            |      |   |  |            |     
|                                                                  | Revenues                          |      |            | (3.6 | )% |      |            | 3.9  | % |  |            | 6.4  | %
|                                                                  | Expenses                          |      |            | 2.7  | %  |      |            | 5.1  | % |  |            | 6.9  | %
|                                                                  | Net operating income              |      |            | (5.6 | )% |      |            | 3.5  | % |  |            | 6.3  | %
|Growth % increase/(decrease) (including
    straight-line rents): |                                   |      |            |      |    |      |            |      |   |  |            |     
|                                                                  | Revenues                          |      |            | (3.8 | )% |      |            | 3.6  | % |  |            | 5.9  | %
|                                                                  | Expenses                          |      |            | 2.7  | %  |      |            | 5.1  | % |  |            | 6.9  | %
|                                                                  | Net operating income              |      |            | (5.7 | )% |      |            | 3.1  | % |  |            | 5.6  | %



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Same store properties are those properties that
    we owned during both the current and prior year reporting
    periods, excluding development properties prior to being
    stabilized (generally defined as properties that are 90% leased
    or properties for which we have held a certificate of occupancy
    or where building has been substantially complete for at least
    12 months).

Retail and Other Property Summary

Our remaining retail and other properties,
aggregating approximately 0.5 million square feet, were 75.2%
leased and had an annualized base rent of $5.5 million at
December 31, 2003.

11



---



##### Table of Contents



DEVELOPMENT PROPERTIES

Development Pipeline

The following table sets forth the properties
owned by us as of December 31, 2003, which were undergoing
renovation, expansion or development. No assurance can be given
that any of these projects will be completed on schedule or
within budgeted amounts.

Industrial Development and Renovation
Deliveries

|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |    |  
|----------------------------------------------- | ------------------------------------------------------- | -------- | ------------------- | ----------------- |  | ----------------------------- | -------------------- | ------------- | -- | ------------- | -- | ---------- | ------- |  | --------- | --------- | ------ | - | ------- | ------- | --- | - | --- | -- | -
|                                                |                                                         |          |                     |                   |  |                               |                      | Estimated     |    |               |    |           
|                                                |                                                         |          |                     |                   |  |                               |                      | Square        |    | Estimated     |    | Our       
|                                                |                                                         |          |                     | Development       |  | Estimated                     |                      | Feet at       |    | Total         |    | Ownership 
|Project                                         |                                                         | Location |                     | Alliance Partner® |  | Stabilization                 |                      | Stabilization |    | Investment(1) |    | Percentage
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |           
|2004 Deliveries                                 |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|1. Sunset Distribution Center Building 1(3)     |                                                         |          | Brea, CA            |                   |  |                               | None                 |               |    |               | Q2 |            |         |  | 246,608   |           |        | $ | 14,800  |         |     |   | 20  | % 
|2. OHare Industrial 
    701 Hilltop Drive(3) |                                                         |          | Itasca, IL          |                   |  |                               | Hamilton Partners    |               |    |               | Q3 |            |         |  | 60,810    |           |        |   | 2,600   |         |     |   | 100 | % 
|3. Agave Building 3                             |                                                         |          | Mexico City, Mexico |                   |  |                               | G Accion             |               |    |               | Q3 |            |         |  | 224,023   |           |        |   | 11,800  |         |     |   | 90  | % 
|4. Airport Logistics Park of Singapore Phase I  |                                                         |          | Changi, Singapore   |                   |  |                               | Boustead Projects    |               |    |               | Q4 |            |         |  | 233,773   |           |        |   | 10,600  |         |     |   | 50  | % 
|5. MIA Logistics Center (IAC)(3)                |                                                         |          | Miami, FL           |                   |  |                               | None                 |               |    |               | Q4 |            |         |  | 147,182   |           |        |   | 9,900   |         |     |   | 100 | % 
|6. JFK Air Cargo  179 149th
    Road(3)        |                                                         |          | Jamaica, NY         |                   |  |                               | None                 |               |    |               | Q4 |            |         |  | 15,000    |           |        |   | 2,200   |         |     |   | 100 | % 
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Total 2004 Deliveries                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 927,396   |        |   |         | 51,900  |     |   |     | 65 | %
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Leased/Funded-to-date                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 42        | %      |   | $       | 36,300  | (2) |   |     |    |  
|                                                | Weighted Average Estimated Stabilized Cash
    Yield(4) |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         | 8.7     | %   |   |     |    |  
|                                               
|2005 Deliveries                                 |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|7. Patriot Distribution Center(3)               |                                                         |          | Mansfield, MA       |                   |  |                               | National Development |               |    |               | Q1 |            |         |  | 423,052   |           |        |   | 22,800  |         |     |   | 20  | % 
|8. Sterling Distribution Center 1               |                                                         |          | Chino, CA           |                   |  |                               | Majestic Realty      |               |    |               | Q1 |            |         |  | 1,000,000 |           |        |   | 36,800  |         |     |   | 50  | % 
|9. Northfield Building 600                      |                                                         |          | Grapevine, TX       |                   |  |                               | Seefried Properties  |               |    |               | Q1 |            |         |  | 140,160   |           |        |   | 6,600   |         |     |   | 20  | % 
|10. Agave Building 1                            |                                                         |          | Mexico City, Mexico |                   |  |                               | G Accion             |               |    |               | Q1 |            |         |  | 397,210   |           |        |   | 18,100  |         |     |   | 90  | % 
|11. Beacon Lakes 9                              |                                                         |          | Miami, FL           |                   |  |                               | Codina Development   |               |    |               | Q2 |            |         |  | 194,480   |           |        |   | 9,800   |         |     |   | 79  | % 
|12. Chancellor(3)                               |                                                         |          | Orlando, FL         |                   |  |                               | None                 |               |    |               | Q2 |            |         |  | 201,600   |           |        |   | 8,000   |         |     |   | 100 | % 
|13. Nicholas Warehouse(3)                       |                                                         |          | Elk Grove, IL       |                   |  |                               | None                 |               |    |               | Q3 |            |         |  | 145,000   |           |        |   | 11,500  |         |     |   | 100 | % 
|14. Sterling Distribution
    Center 2 & 3      |                                                         |          | Chino, CA           |                   |  |                               | Majestic Realty      |               |    |               | Q3 |            |         |  | 880,000   |           |        |   | 31,600  |         |     |   | 50  | % 
|15. Beacon Lakes 6                              |                                                         |          | Miami, FL           |                   |  |                               | Codina Development   |               |    |               | Q4 |            |         |  | 194,480   |           |        |   | 9,800   |         |     |   | 79  | % 
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Total 2005 Deliveries                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 3,575,982 |        |   |         | 155,000 |     |   |     | 59 | %
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Leased/Funded-to-date                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 36        | %      |   | $       | 54,200  | (2) |   |     |    |  
|                                                | Weighted Average Estimated Stabilized Cash
    Yield(4) |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         | 9.2     | %   |   |     |    |  
|                                               
|2006 Deliveries                                 |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|16. MAD Logistics Center                        |                                                         |          | Madrid, Spain       |                   |  | Codina Development & Torimbia |                      |               | Q2 |               |    |            | 454,779 |  |           |           | 26,100 |   |         |         | 80  | %
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Total 2006 Deliveries                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 454,779   |        |   |         | 26,100  |     |   |     | 80 | %
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Leased/Funded-to-date                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 0         | %      |   | $       | 800     | (2) |   |     |    |  
|                                                | Weighted Average Estimated Stabilized Cash
    Yield(4) |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         | 9.0     | %   |   |     |    |  
|                                               
|Total Scheduled Deliveries(1)                   |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  | 4,958,157 |           |        | $ | 233,000 |         |     |   | 63  | % 
|                                                |                                                         |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         |         |     |   |     |   
|                                                | Leased/Funded-to-date                                   |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           | 34        | %      |   | $       | 91,200  | (2) |   |     |    |  
|                                                | Weighted Average Estimated Stabilized Cash
    Yield(4) |          |                     |                   |  |                               |                      |               |    |               |    |            |         |  |           |           |        |   |         | 9.0     | %   |   |     |    |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents total estimated cost of renovation,
    expansion or development, including initial acquisition costs,
    Development Alliance Partner earnouts and associated carry
    costs. The estimates are based on our current estimates and
    forecasts and are subject to change. Excludes 349 acres of land
    held for future development (representing a potential
    5.9 million square feet) and other acquisition-related
    costs totaling $49.8 million. Non-U.S. dollar investments
    are translated to U.S. dollars using the exchange rate at
    December 31, 2003.
|   
|(2) | Our share of amounts funded to date for 2004,
    2005 and 2006 deliveries was $21.8 million,
    $29.1 million and $0.7 million, respectively, for a
    total of $51.6 million.                                                                                                                                                                                                                                                                                                                                                                                                           

12



---



##### Table of Contents





|    |                                                                    
|--- | -------------------------------------------------------------------
|(3) | Represents a renovation project.                                   
|   
|(4) | The yields on international projects are on an
    after-tax basis.

The following table sets forth value-added
conversion projects and development projects that we intended to
sell as of December 31, 2003:

Development Projects Available for
Sale

|                                       |                |                        |             |                  |                    |            |                       |                |       |               |           |            |         |  |         |  |        |   |        |        |     |   |     |   | 
|-------------------------------------- | -------------- | ---------------------- | ----------- | ---------------- | ------------------ | ---------- | --------------------- | -------------- | ----- | ------------- | --------- | ---------- | ------- |  | ------- |  | ------ | - | ------ | ------ | --- | - | --- | - | 
|                                       |                |                        |             |                  |                    | Estimated  |                       | Estimated      |       | Estimated     |           | Our       
|                                       |                |                        |             | Development      |                    | Completion |                       | Square Feet at |       | Total         |           | Ownership 
|Projects(1)                            |                | Market                 |             | Alliance Partner |                    | Date(2)    |                       | Completion     |       | Investment(3) |           | Percentage
|                                       |                |                        |             |                  |                    |            |                       |                |       |               |           |           
|1. Carson Town Center SW 10            |                |                        | Los Angeles |                  |                    |            | Mar Ventures          |                |       |               | Completed |            |         |  | 92,282  |  |        | $ | 7,000  |        |     |   | 95  | %
|2. Wilsonville Phase II                |                |                        | Portland    |                  |                    |            | Trammell Crow Company |                |       |               | Completed |            |         |  | 249,625 |  |        |   | 11,000 |        |     |   | 100 | %
|3. Axygen Headquarters                 |                | San Francisco Bay Area |             |                  | Harvest Properties |            |                       |                | Q3 04 |               |           |            | 100,518 |  |         |  | 8,900  |   |        |        | 100 | %
|4. Central Business Park Buildings A-G |                | San Francisco Bay Area |             |                  | Harvest Properties |            |                       |                | Q3 04 |               |           |            | 127,027 |  |         |  | 11,900 |   |        |        | 100 | %
|                                       |                |                        |             |                  |                    |            |                       |                |       |               |           |            |         |  |         |  |        |   |        |        |     |   |     |  
|Total                                  |                |                        |             |                  |                    |            |                       |                |       |               |           |            |         |  | 569,452 |  |        | $ | 38,800 |        |     |   | 99  | %
|                                       |                |                        |             |                  |                    |            |                       |                |       |               |           |            |         |  |         |  |        |   |        |        |     |   |     |  
|                                       | Funded-to-date |                        |             |                  |                    |            |                       |                |       |               |           |            |         |  |         |  |        |   | $      | 21,000 | (4) |   |     |   | 



---



|    |                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents build-to-suit and speculative
    development or redevelopment. Excludes 267 acres of land held
    for future development or sale and other acquisition-related
    costs totaling $47.0 million.                                  
|   
|(2) | We intend to sell these properties within two
    years of completion.                                                                                                                                                                         
|   
|(3) | Represents total estimated cost of renovation,
    expansion or development, including initial acquisition costs,
    carry and partner earnouts. The estimates are based on our
    current estimates and forecasts and are subject to change.
|   
|(4) | Our share of amounts funded as of
    December 31, 2003, was $20.8 million.                                                                                                                                                                    

Properties Held Through Joint Ventures,
Limited Liability Companies and Partnerships



| |              
| | -------------
| | Consolidated:

As of December 31, 2003, we held interests
in joint ventures, limited liability companies and partnerships
with institutional investors and other third parties, which we
consolidate in our financial statements. Such investments are
consolidated because we owned a majority interest or, as general
partner, exercise significant control over major operating
decisions such as acquisition or disposition decisions, approval
of budgets, selection of property managers and changes in
financing. Under the agreements governing the joint ventures, we
and the other party to the joint venture may be required to make
additional capital contributions and, subject to certain
limitations, the joint ventures may incur additional debt. Such
agreements also impose certain restrictions on the transfer of
joint venture interests by us or the other party to the joint
venture and typically provide certain rights to us or the other
party to the joint venture to sell our or their interest in the
joint venture to the joint venture or to the other joint-venture
partner on terms specified in the agreement. In addition, under
certain circumstances, many of the joint ventures include
buy/sell provisions. See Part IV. Item 15:
Note 10 of the Notes to Consolidated Financial
Statements for additional details. The tables that follow
summarize our consolidated joint ventures as of
December 31, 2003.

13



---



##### Table of Contents



Co-investment Consolidated Joint
Ventures

|                                              |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |         |         | 
|--------------------------------------------- | -------------------------------------------------- | --------------------------------------------------- |  | --------- | -- | ------- |  | ---------- | --- | -------- |  | ------------ | ---------- |  | - | --------- | --------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                                              |                                                    | Our                                                 |  |           |    |         |  |            |     |          |  | JV Partners
|                                              |                                                    | Ownership                                           |  | Number of |    | Square  |  | Gross Book |     | Property |  | Share of    
|Joint Ventures                                |                                                    | Percentage                                          |  | Buildings |    | Feet(1) |  | Value(2)   |     | Debt     |  | Debt        
|                                              |                                                    |                                                     |  |           |    |         |  |            |     |          |  |             
|Co-Investment Operating Joint
    Ventures:   |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |        
|                                              | AMB/Erie, L.P.(3)                                  |                                                     |  | 50        | %  |         |  | 27         |     |          |  | 2,585,304    |            |  | $ | 141,924   |           |  | $ | 57,115  |         |  | $ | 28,557  |        
|                                              | AMB Institutional Alliance Fund I, L.P.(4)         |                                                     |  | 21        | %  |         |  | 104        |     |          |  | 6,200,772    |            |  |   | 417,276   |           |  |   | 214,538 |         |  |   | 170,140 |        
|                                              | AMB Partners II, L.P.(5)                           |                                                     |  | 20        | %  |         |  | 93         |     |          |  | 7,306,813    |            |  |   | 423,015   |           |  |   | 253,942 |         |  |   | 203,638 |        
|                                              | AMB-SGP, L.P.(6)                                   |                                                     |  | 50        | %  |         |  | 73         |     |          |  | 8,591,207    |            |  |   | 408,507   |           |  |   | 249,861 |         |  |   | 124,553 |        
|                                              | AMB Institutional Alliance Fund II, L.P.(4)        |                                                     |  | 20        | %  |         |  | 63         |     |          |  | 6,621,978    |            |  |   | 409,050   |           |  |   | 204,542 |         |  |   | 163,415 |        
|                                              | AMB-AMS, L.P.(7)                                   |                                                     |  | 39        | %  |         |  |           |     |          |  |             |            |  |   |          |           |  |   |        |         |  |   |        |        
|                                              |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |        
|                                              | Total Co-Investment Operating Joint
    Ventures   |                                                     |  | 29        | %  |         |  | 360        |     |          |  | 31,306,074   |            |  |   | 1,799,772 |           |  |   | 979,998 |         |  |   | 690,303 |        
|Co-Investment Development Joint
    Ventures: |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |        
|                                              | AMB/ Erie, L.P.(3)                                 |                                                     |  | 50        | %  |         |  |           |     |          |  |             |            |  |   | 14,250    |           |  |   |        |         |  |   |        |        
|                                              | AMB Institutional Alliance Fund I, L.P.(4)         |                                                     |  | 21        | %  |         |  |           |     |          |  |             |            |  |   | 626       |           |  |   |        |         |  |   |        |        
|                                              | AMB Partners II, L.P.(5)                           |                                                     |  | 20        | %  |         |  |           |     |          |  |             |            |  |   | 5,822     |           |  |   |        |         |  |   |        |        
|                                              | AMB Institutional Alliance Fund II, L.P.(4)        |                                                     |  | 20        | %  |         |  | 3          |     |          |  | 809,820      |            |  |   | 40,659    |           |  |   |        |         |  |   |        |        
|                                              |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |        
|                                              | Total Co-Investment Development Joint
    Ventures |                                                     |  | 27        | %  |         |  | 3          |     |          |  | 809,820      |            |  |   | 61,357    |           |  |   |        |         |  |   |        |        
|                                              |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |        
|                                              |                                                    | Total Co-Investment Consolidated Joint
    Ventures |  |           | 29 | %       |  |            | 363 |          |  |              | 32,115,894 |  |   | $         | 1,861,129 |  |   | $       | 979,998 |  |   | $       | 690,303 | 
|                                              |                                                    |                                                     |  |           |    |         |  |            |     |          |  |              |            |  |   |           |           |  |   |         |         |  |   |        



---



|    |                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For development properties, this represents
    estimated square feet at completion of development for committed
    phases of development and renovation projects.                                                                       
|   
|(2) | Represents the book value of the property (before
    accumulated depreciation) owned by the joint venture entity and
    excludes net other assets as of December 31, 2003.
    Development book values include uncommitted land.        
|   
|(3) | AMB Erie, L.P. is a co-investment partnership
    formed in 1998 with the Erie Insurance Company and certain
    related entities.                                                                                                        
|   
|(4) | AMB Institutional Alliance Fund I, L.P. and AMB
    Institutional Alliance Fund II, L.P. are co-investment
    partnerships with institutional investors, which invest through
    private real estate investment trusts.                 
|   
|(5) | AMB Partners II, L.P. is a co-investment
    partnership formed in 2001 with the City and County of San
    Francisco Employees Retirement System.                                                                                       
|   
|(6) | AMB-SGP, L.P. is a co-investment partnership
    formed in 2001 with Industrial JV Pte Ltd, a subsidiary of GIC
    Real Estate Pte. Ltd, the real estate investment subsidiary of
    the government of Singapore Investment Corporation.
|   
|(7) | AMB-AMS, L.P. is a commitment to form a
    co-investment partnership with two Dutch pension funds advised
    by Mn Services NV.                                                                                                         

14



---



##### Table of Contents



Other Consolidated Joint Ventures

|                                                |                                                        |        |         |            |  |        |     |          |  |          |           |              |  |   |         |         |  |   |        |        |  |   |       |       | 
|----------------------------------------------- | ------------------------------------------------------ | ------ | ------- | ---------- |  | ------ | --- | -------- |  | -------- | --------- | ------------ |  | - | ------- | ------- |  | - | ------ | ------ |  | - | ----- | ----- | 
|                                                |                                                        |        |         | Our        |  |        |     | Gross    |  |          |           | JV Partners
|                                                |                                                        |        |         | Ownership  |  | Square |     | Book     |  | Property |           | Share of    
|Properties                                      |                                                        | Market |         | Percentage |  | Feet   |     | Value(1) |  | Debt     |           | Debt        
|                                                |                                                        |        |         |            |  |        |     |          |  |          |           |             
|Other Industrial Operating Joint
    Ventures   |                                                        |        | Various |            |  |        | 92% |          |  |          | 3,801,160 |              |  | $ | 280,528 |         |  | $ | 75,665 |        |  | $ | 6,036 |      
|Other Industrial Development Joint
    Ventures |                                                        |        | Various |            |  |        | 84% |          |  |          | 1,906,133 |              |  |   | 77,123  |         |  |   |       |        |  |   |      |      
|                                                |                                                        |        |         |            |  |        |     |          |  |          |           |              |  |   |         |         |  |   |        |        |  |   |       |      
|                                                | Total Other Industrial Consolidated Joint
    Ventures |        |         |            |  |        |     | 90%      |  |          |           | 5,707,293    |  |   | $       | 357,651 |  |   | $      | 75,665 |  |   | $     | 6,036 | 
|                                                |                                                        |        |         |            |  |        |     |          |  |          |           |              |  |   |         |         |  |   |        |        |  |   |       |      
|Retail Joint Ventures:                          |                                                        |        |         |            |  |        |     |          |  |          |           |              |  |   |         |         |  |   |        |        |  |   |       |      
|                                                | 1. Around Lenox                                        |        |         | Atlanta    |  |        |     | 90%      |  |          |           | 125,222      |  |   | $       | 22,184  |  |   | $      | 9,368  |  |   | $     | 937   | 
|                                                | 2. Palm Aire                                           |        |         | Miami      |  |        |     | 100%     |  |          |           | 140,262      |  |   |         | 19,773  |  |   |        |       |  |   |       |      | 
|                                                | 3. Springs Gate Land                                   |        |         | Miami      |  |        |     | 100%     |  |          |           |             |  |   |         | 6,717   |  |   |        |       |  |   |       |      | 
|                                                |                                                        |        |         |            |  |        |     |          |  |          |           |              |  |   |         |         |  |   |        |        |  |   |       |      
|                                                | Total Retail Consolidated Joint
    Ventures           |        |         |            |  |        |     | 95%      |  |          |           | 265,484      |  |   | $       | 48,674  |  |   | $      | 9,368  |  |   | $     | 937   | 
|                                                |                                                        |        |         |            |  |        |     |          |  |          |           |              |  |   |         |         |  |   |        |        |  |   |       |      



---



|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the book value of the property (before
    accumulated depreciation) owned by the joint-venture entity and
    excludes net other assets as of December 31, 2003.
    Development book values include uncommitted land.



| |                                                                              
| | -----------------------------------------------------------------------------
| | Unconsolidated Joint Ventures, Mortgage
    Investments and Other Investment:

As of December 31, 2003, we held interests
in six equity investment joint ventures that are not
consolidated in our financial statements. The management and
control over significant aspects of these investments are held
by the third-party joint-venture partners and the investments do
not meet the variable-interest entity consolidation criteria
under FASB Interpretation No. 46R, Consolidation of
Variable Interest Entities. In addition, as of
December 31, 2003, we held mortgage investments, from which
we receive interest income.

Unconsolidated Joint Ventures,

Mortgage Investments and Other
Investment


|                                                   |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |    |    |  
|-------------------------------------------------- | ----------------------------------------------------- | ----------------------------------- |  | ---------------- |  | ------ |  | ----------------- |  | ---------- |  | --------- | ---------- |  | - | ------ | ------ |  |  | -- | -- | -
|                                                   |                                                       |                                     |  |                  |  |        |  | Our Net           |  | Our       
|                                                   |                                                       |                                     |  |                  |  | Square |  | Equity            |  | Ownership 
|Unconsolidated Joint Ventures                      |                                                       | Market                              |  | Alliance Partner |  | Feet   |  | Investment        |  | Percentage
|                                                   |                                                       |                                     |  |                  |  |        |  |                   |  |           
|Other Industrial Operating Joint
    Ventures      |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |   
|                                                   | 1. Elk Grove Du Page                                  |                                     |  | Chicago          |  |        |  | Hamilton Partners |  |            |  | 4,046,721 |            |  | $ | 31,548 |        |  |  | 56 | % 
|                                                   | 2. Pico Rivera                                        |                                     |  | Los Angeles      |  |        |  | Majestic Realty   |  |            |  | 855,600   |            |  |   | 1,091  |        |  |  | 50 | % 
|                                                   | 3. Monte Vista Spectrum                               |                                     |  | Los Angeles      |  |        |  | Majestic Realty   |  |            |  | 576,852   |            |  |   | 487    |        |  |  | 50 | % 
|                                                   | 4. Industrial Fund I, LLC                             |                                     |  | Various          |  |        |  | Citigroup         |  |            |  | 2,446,334 |            |  |   | 4,173  |        |  |  | 15 | % 
|                                                   |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |   
|                                                   | Total Other Industrial Operating Joint
    Ventures   |                                     |  |                  |  |        |  |                   |  |            |  | 7,925,507 |            |  |   | 37,299 |        |  |  |    |   
|Other Industrial Development Joint
    Ventures(1) |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |   
|                                                   | 5. Sterling Distribution Center                       |                                     |  | Los Angeles      |  |        |  | Majestic Realty   |  |            |  | 1,880,000 |            |  |   | 12,643 |        |  |  | 50 | % 
|                                                   | 6. Airport Logistics Park of Singapore Phase I        |                                     |  | Singapore        |  |        |  | Boustead Projects |  |            |  | 233,773   |            |  |   | 2,067  |        |  |  | 50 | % 
|                                                   |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |   
|                                                   | Total Other Industrial Development Joint
    Ventures |                                     |  |                  |  |        |  |                   |  |            |  | 2,113,773 |            |  |   | 14,710 |        |  |  |    |   
|                                                   |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |   
|                                                   |                                                       | Total Unconsolidated Joint Ventures |  |                  |  |        |  |                   |  |            |  |           | 10,039,280 |  |   | $      | 52,009 |  |  |    | 45 | %
|                                                   |                                                       |                                     |  |                  |  |        |  |                   |  |            |  |           |            |  |   |        |        |  |  |   

15



---



##### Table of Contents



|                                         |  |        |                |          |  |            |               |      |  |               |        |  |  |  |      |   |  |  |     |  
|---------------------------------------- |  | ------ | -------------- | -------- |  | ---------- | ------------- | ---- |  | ------------- | ------ |  |  |  | ---- | - |  |  | --- | -
|                                         |  |        |                |          |  |            |               |      |  | Our          
|                                         |  |        |                |          |  | Mortgage   |               |      |  | Ownership    
|Mortgage Investments                     |  | Market |                | Maturity |  | Receivable |               | Rate |  | Percentage(2)
|                                         |  |        |                |          |  |            |               |      |  |              
|1. Pier 1(3)                             |  |        | SF Bay Area    |          |  |            | May 2026      |      |  | $             | 13,042 |  |  |  | 13.0 | % |  |  | 100 | %
|2. Platinum Distribution Center          |  |        | No. New Jersey |          |  |            | February 2004 |      |  |               | 19,500 |  |  |  | 6.0  | % |  |  | 20  | %
|3. Platinum Distribution Center          |  |        | No. New Jersey |          |  |            | November 2006 |      |  |               | 1,300  |  |  |  | 12.0 | % |  |  | 20  | %
|4. North Bay Distribution Center/BAB     |  |        | SF Bay Area    |          |  |            | December 2004 |      |  |               | 7,040  |  |  |  | 5.5  | % |  |  | 100 | %
|5. North Bay Distribution Center/Corovan |  |        | SF Bay Area    |          |  |            | December 2004 |      |  |               | 2,263  |  |  |  | 7.3  | % |  |  | 100 | %
|                                         |  |        |                |          |  |            |               |      |  |               |        |  |  |  |      |   |  |  |     |  
|                                         |  |        |                |          |  |            |               |      |  | $             | 43,145 |  |  |  |      |   |  |  |     |  
|                                         |  |        |                |          |  |            |               |      |  |               |        |  |  |  |      |   |  |  |     |  

|                 |  |        |             |               |  |            |             |            |  |   |        |  |  |  |     |  
|---------------- |  | ------ | ----------- | ------------- |  | ---------- | ----------- | ---------- |  | - | ------ |  |  |  | --- | -
|                 |  |        |             |               |  |            |             | Our       
|                 |  |        |             |               |  | Gross      |             | Ownership 
|Other Investment |  | Market |             | Property Type |  | Investment |             | Percentage
|                 |  |        |             |               |  |            |             |           
|1. Park One      |  |        | Los Angeles |               |  |            | Parking Lot |            |  | $ | 75,497 |  |  |  | 100 | %



---



|    |                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Square feet for development alliance joint
    ventures represents estimated square feet at completion of
    development project.                                                                                               
|   
|(2) | Represents our ownership percentage in the
    co-investment joint venture that holds the mortgage investment.                                                                                                                   
|   
|(3) | We also have a 0.1% unconsolidated equity
    interest (with a 33% economic interest) in this property and an
    option to purchase the remaining equity interest that begins
    January 1, 2007 and expires December 31, 2009.

Secured Debt

As of December 31, 2003, we had
$1.4 billion of secured indebtedness, net of unamortized
premiums, secured by deeds of trust on 111 properties. As of
December 31, 2003, the total gross consolidated investment
value of those properties secured by debt was $2.6 billion.
Of the $1.4 billion of secured indebtedness,
$1.1 billion was joint venture debt secured by properties
with a gross investment value of $1.8 billion. For
additional details, see Item 7: Managements
Discussion and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital Resources and
Item 15: Note 7 of Notes to Consolidated Financial
Statements included in this report. We believe that as of
December 31, 2003, the fair value of the properties
securing the respective obligations in each case exceeded the
principal amount of the outstanding obligations.






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

As of December 31, 2003, there were no
pending legal proceedings to which we were a party or of which
any of our properties was the subject, the adverse determination
of which we anticipate would have a material adverse effect upon
our financial condition, results of operations and cash flows.






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

None.

16



---



##### Table of Contents






PART II



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

There is no established public trading market for
our partnership units. As of December 31, 2003, we had
outstanding 92,227,292 partnership units, consisting of
85,863,502 general partnership units (consisting of 81,563,502
common units, 2,000,000 6 1/2% Series L Cumulative
Redeemable Preferred Units and 2,300,000 6 3/4%
Series M Cumulative Redeemable Preferred Units) held by AMB
Property Corporation and 6,363,790 limited partnership units
(consisting of 4,763,790 common units, 800,000 7.95%
Series J Cumulative Redeemable Preferred Units and 800,000
7.95% Series K Cumulative Redeemable Preferred Units). The
Series M preferred units were issued on November 25,
2003 to AMB Property Corporation for total consideration of
$57.5 million. The series L preferred units were issued on
June 23, 2003 to AMB property corporation for total
consideration of $50.0 million. Subject to certain terms
and conditions, the limited partnership units are redeemable by
the holders or, at the option of AMB Property Corporation,
exchangeable on a one-for-one basis for shares of the common
stock of AMB Property Corporation. As of December 31, 2003,
there were 83 holders of our common partnership units (including
AMB Property Corporations general partnership interest).
As of the same date, AMB Property Corporation was the only
holder of the 6 1/2% Series L Cumulative Redeemable
Preferred Units and the 6 3/4% Series M Cumulative
Redeemable Preferred Units. There was one holder of the
8 5/8% Series B Cumulative Redeemable Units, one
holder of the 7.95% Series J Cumulative Redeemable Units
and one holder of the 7.95% Series K Cumulative Redeemable
Units.

During 2003, we redeemed 2,000 common limited
partnership units shares of AMB Property Corporations
common stock and we redeemed 226,145 common limited partnership
units for a total of $6.1 million in cash.

Set forth below are the distributions per common
limited partnership unit paid by us during the years ended
December 31, 2002 and 2003:

|     |             |              |   |       | 
|---- | ----------- | ------------ | - | ----- | 
|Year |             | Distribution
|     |             |             
|2002 |             |              |   |      
|     | 1st Quarter |              | $ | 0.410 | 
|     | 2nd Quarter |              |   | 0.410 | 
|     | 3rd Quarter |              |   | 0.410 | 
|     | 4th Quarter |              |   | 0.410 | 
|2003 |             |              |   |      
|     | 1st Quarter |              |   | 0.415 | 
|     | 2nd Quarter |              |   | 0.415 | 
|     | 3rd Quarter |              |   | 0.415 | 
|     | 4th Quarter |              |   | 0.415 | 

17



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##### Table of Contents





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

SELECTED OPERATING PARTNERSHIP FINANCIAL AND
OTHER DATA (1)

The selected financial data set forth in this
Item 6 has been restated to reflect certain adjustments to
our consolidated financial statements contained in our Annual
Report on Form 10-K and Amendment No. 1 to our Annual
Report on Form 10-K/ A for the year ended December 31,
2003 originally filed with the U.S. Securities and Exchange
Commission on March 11, 2004 and March 15, 2004,
respectively. See Note 2 to the restated consolidated financial
statements included in Part IV, Item 15 of this Amendment
No. 2 on Form 10-K/ A.

The following table sets forth our selected
consolidated historical financial and other data on an
historical basis as of and for the years ended December 31:

|                                                                               |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |          |  
|------------------------------------------------------------------------------ | -------------------- | ------------------------------------------------ | ------- | ---------- | - | ---------- | ------- | -------- | - | ---- | ------- | -------- | - | - | ------- | -------- | - | - | ------- | -------- | -
|                                                                               |                      | 2003                                             |         | 2002       |   | 2001(2)    |         | 2000     |   | 1999
|                                                                               |                      |                                                  |         |            |   |            |         |          |   |     
|                                                                               |                      | (Restated)                                       |         | (Restated) |   | (Restated) |         |          |   |     
|                                                                               |                      |                                                 
|                                                                               |                      | (Dollars in thousands, except per share amounts)
|Operating Data                                                                 |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|Total revenues                                                                 |                      | $                                                | 615,037 |            |   | $          | 589,682 |          |   | $    | 534,266 |          |   | $ | 433,866 |          |   | $ | 412,755 |         
|Income before minority interests and discontinued
    operations               |                      |                                                  | 148,384 |            |   |            | 142,169 |          |   |      | 183,161 |          |   |   | 151,765 |          |   |   | 198,126 |         
|Income from continuing operations                                              |                      |                                                  | 92,721  |            |   |            | 99,451  |          |   |      | 131,144 |          |   |   | 121,010 |          |   |   | 178,972 |         
|Income from discontinued operations                                            |                      |                                                  | 54,392  |            |   |            | 39,603  |          |   |      | 19,128  |          |   |   | 14,422  |          |   |   | 11,528  |         
|Net income available to common unitholders
    attributable to general partner |                      |                                                  | 116,716 |            |   |            | 113,035 |          |   |      | 120,100 |          |   |   | 113,282 |          |   |   | 167,603 |         
|Net income from continuing operations per common
    unit:                     |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|                                                                               | Basic(3)             |                                                  |         | 0.81       |   |            |         | 0.91     |   |      |         | 1.21     |   |   |         | 1.19     |   |   |         | 1.81     |  
|                                                                               | Diluted(3)           |                                                  |         | 0.79       |   |            |         | 0.89     |   |      |         | 1.20     |   |   |         | 1.19     |   |   |         | 1.81     |  
|Net income from discontinued operations per
    common unit:                   |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|                                                                               | Basic(3)             |                                                  |         | 0.63       |   |            |         | 0.45     |   |      |         | 0.22     |   |   |         | 0.16     |   |   |         | 0.13     |  
|                                                                               | Diluted(3)           |                                                  |         | 0.62       |   |            |         | 0.44     |   |      |         | 0.21     |   |   |         | 0.16     |   |   |         | 0.13     |  
|Net income per common unit:                                                    |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|                                                                               | Basic(3)             |                                                  |         | 1.44       |   |            |         | 1.36     |   |      |         | 1.43     |   |   |         | 1.35     |   |   |         | 1.94     |  
|                                                                               | Diluted(3)           |                                                  |         | 1.41       |   |            |         | 1.33     |   |      |         | 1.41     |   |   |         | 1.35     |   |   |         | 1.94     |  
|Dividends declared per common unit                                             |                      |                                                  | 1.66    |            |   |            | 1.64    |          |   |      | 1.58    |          |   |   | 1.48    |          |   |   | 1.40    |         
|Other Data                                                                     |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|Funds from operations(4)                                                       |                      | $                                                | 186,666 |            |   | $          | 215,194 |          |   | $    | 186,707 |          |   | $ | 202,751 |          |   | $ | 190,678 |         
|Funds from operations per common unit:                                         |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|                                                                               | Basic                |                                                  |         | 2.17       |   |            |         | 2.44     |   |      |         | 2.09     |   |   |         | 2.26     |   |   |         | 2.10     |  
|                                                                               | Diluted              |                                                  |         | 2.13       |   |            |         | 2.40     |   |      |         | 2.07     |   |   |         | 2.25     |   |   |         | 2.10     |  
|Cash flows provided by (used in):                                              |                      |                                                  |         |            |   |            |         |          |   |      |         |          |   |   |         |          |   |   |         |         
|                                                                               | Operating activities |                                                  |         | 271,536    |   |            |         | 288,801  |   |      |         | 288,562  |   |   |         | 261,175  |   |   |         | 198,939  |  
|                                                                               | Investing activities |                                                  |         | (348,003   | ) |            |         | (244,390 | ) |      |         | (363,152 | ) |   |         | (726,499 | ) |   |         | 55,184   |  
|                                                                               | Financing activities |                                                  |         | 112,022    |   |            |         | (28,150  | ) |      |         | 127,303  |   |   |         | 452,370  |   |   |         | (240,721 | )

18



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##### Table of Contents



|                                   |  |                                                  |           |            |  |            |           |      |  |      |           |  |  |   |           |  |  |   |           | 
|---------------------------------- |  | ------------------------------------------------ | --------- | ---------- |  | ---------- | --------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  | - | --------- | 
|                                   |  | 2003                                             |           | 2002       |  | 2001(2)    |           | 2000 |  | 1999
|                                   |  |                                                  |           |            |  |            |           |      |  |     
|                                   |  | (Restated)                                       |           | (Restated) |  | (Restated) |           |      |  |     
|                                   |  |                                                 
|                                   |  | (Dollars in thousands, except per share amounts)
|Balance Sheet Data                 |  |                                                  |           |            |  |            |           |      |  |      |           |  |  |   |           |  |  |   |           | 
|Investments in real estate at cost |  | $                                                | 5,491,707 |            |  | $          | 4,922,782 |      |  | $    | 4,527,511 |  |  | $ | 4,026,597 |  |  | $ | 3,249,452 | 
|Total assets                       |  |                                                  | 5,409,559 |            |  |            | 4,983,629 |      |  |      | 4,763,614 |  |  |   | 4,433,207 |  |  |   | 3,631,175 | 
|Total consolidated debt            |  |                                                  | 2,574,257 |            |  |            | 2,235,361 |      |  |      | 2,143,714 |  |  |   | 1,843,857 |  |  |   | 1,279,662 | 
|Our share of total debt(5)         |  |                                                  | 1,954,314 |            |  |            | 1,691,737 |      |  |      | 1,655,386 |  |  |   | 1,681,161 |  |  |   | 1,168,218 | 
|General partners capital          |  |                                                  | 1,657,137 |            |  |            | 1,676,079 |      |  |      | 1,747,389 |  |  |   | 1,767,930 |  |  |   | 1,829,259 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Certain items in the consolidated financial
    statements for prior periods have been reclassified to conform
    with current classifications with no effect on net income or
    partners capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(2) | In July 2003, the U.S. Securities and Exchange
    Commission announced that it had revised its position relating
    to the application of Emerging Issues Task Force Topic
    No. D-42, The Effect on the Calculation of Earnings per
    Share for the Redemption or Induced Conversion of Preferred
    Stock, (Topic D-42). As a result of this
    announcement, original issuance costs related to preferred
    equity are to be reflected as a reduction of net income
    available to common unitholders in determining earnings per unit
    for the period in which the preferred equity is redeemed. The
    announcement requires retroactive application of the revised
    position in previously issued financial statements. As a result,
    our financial statements for the year ending December 31,
    2001, are restated to reflect a reduction in net income
    available to common unitholders of $3.2 million,
    representing the original issuance costs of AMB Property II,
    L.P.s series C preferred units, which were redeemed in
    December 2001. Diluted earnings per unit for the year ended
    December 31, 2001 was $1.41 (restated). The U.S. Securities
    and Exchange Commissions revised position on Topic D-42
    did not require us to file amendments to previously filed
    reports and will not impact any other previously reported
    periods.
|   
|(3) | Basic and diluted net income per weighted average
    unit equals the net income available to common unitholders
    divided by 85,859,899 and 87,616,365 units, respectively, for
    2003; 88,204,208 and 89,689,310 units, respectively, for 2002;
    89,286,379 and 90,325,801 units, respectively, for 2001;
    89,566,375 and 90,024,511 units, respectively, for 2000; and
    90,792,310 and 90,867,934 units, respectively, for 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(4) | In 2003, we discontinued our practice of
    deducting amortization of investments in leasehold interests
    from funds from operations (FFO) as such an
    adjustment is not provided for in NAREITs FFO definition.
    In 2003, we also modified our FFO reporting to no longer add
    back impairment losses when computing FFO in accordance with
    NAREITs FFO definition. Additionally, we adopted Topic
    D-42 and began including preferred unit redemption discounts and
    issuance cost write-offs in FFO. As a result, FFO for the
    periods presented has been adjusted to reflect the changes. For
    an explanation of funds from operations and a discussion of why
    management believes that FFO is a meaningful supplemental
    measure of our operating performance, please see Item 7:
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Supplemental
    Earnings Measures.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(5) | Our share of total debt is the pro rata portion
    of the total debt based on our percentage of equity interest in
    each of the consolidated ventures holding the debt. We believe
    that our share of total debt is a meaningful supplemental
    measure, which enables both management and investors to analyze
    our leverage and to compare our leverage to that of other
    companies. In addition, it allows for a more meaningful
    comparison of our debt to that of other companies that do not
    consolidate their joint ventures. Our share of total debt is not
    intended to reflect our actual liability should there be a
    default under any or all of such loans or a liquidation of the
    joint ventures. For a reconciliation of our share of total debt
    to total consolidated debt, a GAAP financial measure, please see
    the table of debt maturities and capitalization in Part II.
    Item 7. Liquidity and Capital Resources 
    Capital Resources.                                                                                                                                                                                                                                                                                                                                                                                                      

19



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##### Table of Contents





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

The Managements Discussion and Analysis
of Financial Condition and Results of Operations set forth in
this Item 7 has been restated to reflect certain
adjustments to our consolidated financial statements contained
in our Annual Report on Form 10-K and Amendment No. 1
to our Annual Report on Form 10-K/ A for the year ended
December 31, 2003, originally filed with the U.S.
Securities and Exchange Commission on March 11, 2004 and
March 15, 2004, respectively. See Note 2 to the restated
consolidated financial statements included in Part IV,
Item 15 of this Amendment No. 2 on Form 10-K/
A.

You should read the following discussion and
analysis of our consolidated financial condition and results of
operations in conjunction with the notes to consolidated
financial statements. Statements contained in this discussion
that are not historical facts may be forward-looking statements.
Such statements relate to our future performance and plans,
results of operations, capital expenditures, acquisitions, and
operating improvements and costs. You can identify
forward-looking statements by the use of forward-looking
terminology such as believes, expects,
may, will, should,
seeks, approximately,
intends, plans, pro forma,
estimates or anticipates, or the
negative of these words and phrases, or similar words or
phrases. You can also identify forward-looking statements by
discussions of strategy, plans or intentions. Forward-looking
statements involve numerous risks and uncertainties and you
should not rely upon them as predictions of future events. There
is no assurance that the events or circumstances reflected in
forward-looking statements will occur or be achieved.
Forward-looking statements are necessarily dependent on
assumptions, data or methods that may be incorrect or imprecise
and we may not be able to realize them.

The following factors, among others, could
cause actual results and future events to differ materially from
those set forth or contemplated in the forward-looking
statements:



| |   |                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in general economic conditions or in
    the real estate sector;                                                                                                                  
|
| |  | non-renewal of leases by customers or renewal
    at lower than expected rent;                                                                                                            
|
| |  | difficulties in identifying properties to
    acquire and in effecting acquisitions on advantageous terms and
    the failure of acquisitions to perform as we expect;                    
|
| |  | risks and uncertainties affecting property
    development and renovation (including construction delays, cost
    overruns, our inability to obtain necessary permits and
    financing);
|
| |  | a downturn in Californias economy or
    real estate conditions;                                                                                                                         
|
| |  | losses in excess of our insurance
    coverage;                                                                                                                                           
|
| |  | our failure to divest of properties on
    advantageous terms or to timely reinvest proceeds from any such
    divestitures;                                                              
|
| |  | unknown liabilities acquired from our
    predecessors or in connection with acquired
    properties;                                                                                     
|
| |  | risks of doing business internationally,
    including unfamiliarity with new markets and currency
    risks;                                                                             
|
| |  | risks associated with using debt to fund
    acquisitions and development, including re-financing
    risks;                                                                              
|
| |  | our failure to obtain necessary
    financing;                                                                                                                                            
|
| |  | changes in local, state and federal regulatory
    requirements; and                                                                                                                      
|
| |  | environmental uncertainties.                                                                                                                                                              

Our success also depends upon economic trends
generally, various market conditions and fluctuations and those
other risk factors discussed in the section entitled
Business Risks in this report. We caution you not to
place undue reliance on forward-looking statements, which
reflect our analysis only and speak as of the date of this
report or as of the dates indicated in the statements. We assume
no obligation to update or supplement forward-looking
statements.

20



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##### Table of Contents



GENERAL

We commenced operations shortly before the
consummation of AMB Property Corporations initial public
offering on November 26, 1997.

Managements Overview

We generate revenue and earnings primarily from
rent received from customers under long-term (generally three to
ten years) operating leases at our properties, including
reimbursements from customers for certain operating costs, and
from partnership distributions and fees from our private capital
business. We also derive earnings from the strategic disposition
of assets and from the disposition of projects under our
development-for-sale program. Our long-term growth is dependent
on our ability to maintain and increase occupancy rates or
increase rental rates at our properties and our ability to
continue to acquire and develop new properties.

Although the weak economy over the past three
years has decreased customer demand for space and has limited or
in most cases lowered rental rates, many types of investors are
acquiring industrial real estate. We believe that we have
capitalized on this opportunity by accelerating the
repositioning of our portfolio through the disposition of
properties. While property dispositions result in reinvestment
capacity and trigger gain/loss recognition, they also create
near-term earnings dilution. However, we believe that, in the
long-term, the repositioning of our portfolio will benefit our
unitholders and noteholders.

The table below summarizes our leasing activity
for 2003 and 2002:

|                                      |                                                          |            |  |             |    |                |  |           |   |  |  |            |   
|------------------------------------- | -------------------------------------------------------- | ---------- |  | ----------- | -- | -------------- |  | --------- | - |  |  | ---------- | --
|                                      |                                                          | U.S. Hub   |  | Total Other |    | Total/Weighted
|Property Data                         |                                                          | Markets(1) |  | Markets     |    | Average       
|                                      |                                                          |            |  |             |    |               
|For the year ended December 31, 2003: |                                                          |            |  |             |    |                |  |           |   |  |  |           
|                                      | % of total rentable square feet                          |            |  | 75.0        | %  |                |  | 25.0      | % |  |  | 100.0      | % 
|                                      | Occupancy percentage at year end                         |            |  | 93.5        | %  |                |  | 91.9      | % |  |  | 93.1       | % 
|                                      | Same space square footage leased                         |            |  | 13,636,050  |    |                |  | 3,636,967 |   |  |  | 17,273,017 |   
|                                      | Rent increases/(decreases) on renewals and
    rollovers |            |  | (12.7       | )% |                |  | 1.7       | % |  |  | (10.1      | )%
|For the year ended December 31, 2002: |                                                          |            |  |             |    |                |  |           |   |  |  |           
|                                      | % of total rentable square feet                          |            |  | 70.0        | %  |                |  | 30.0      | % |  |  | 100.0      | % 
|                                      | Occupancy percentage at year end                         |            |  | 95.5        | %  |                |  | 92.5      | % |  |  | 94.6       | % 
|                                      | Same space square footage leased                         |            |  | 10,303,683  |    |                |  | 4,396,916 |   |  |  | 14,700,599 |   
|                                      | Rent increases/(decreases) on renewals and
    rollovers |            |  | (1.8        | )% |                |  | 1.0       | % |  |  | (1.0       | )%



---



|    |                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Our U.S. hub and gateway markets include
    on-tarmac and Atlanta, Chicago, Dallas/ Fort Worth, Los Angeles,
    Northern New Jersey/ New York City, the San Francisco Bay Area,
    Miami and Seattle.

Occupancy levels in our industrial portfolio and
rents on lease renewals and rollovers were lower in 2003 as the
general contraction in business activity, which began in 2001,
reduced demand for industrial warehouse facilities. According to
Torto Wheaton Research, the overall industrial market
deteriorated rapidly from its peak levels at the end of 2000,
when availability was 6.6%, through the second quarter of 2002,
when availability reached 10.8%. Subsequently, national
industrial availability has deteriorated at a more modest rate,
declining an average of 13 basis points per quarter to reach
11.6% at December 31, 2003. As a result of the increase in
availability, market rents for industrial properties in most
markets decreased between 10% and 20% from their peak levels in
2001. Over the same three-year period, our portfolio vacancy
increased from 3.6% at December 31, 2000 to 6.9% at
December 31, 2003, which we consider consistent with market
trends, but still outperforming the national industrial average.
While the level of rental rate reduction varied by market, we
maintained high occupancy by pricing lease renewals and new
leases with sensitivity to local market conditions. In periods
of decreasing rental rates, we strive to sign leases with
shorter terms to prevent

21



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##### Table of Contents



locking-in lower rent levels for long periods and
to be prepared to sign new, longer-term leases during periods of
growing rental rates. When we sign leases of shorter duration,
we attempt to limit overall leasing costs and capital
expenditures by offering modest tenant improvement packages,
appropriate to the lease term. We generally followed this
practice during 2003. Through the first half of 2003, we
experienced declining occupancy in our industrial operating
portfolio; at June 30, 2003, occupancy in our operating
industrial portfolio was 91.5%. However, during the last half of
2003, we have increased occupancy in our operating industrial
portfolio by 160 basis points to 93.1% at December 31,
2003, 470 basis points greater than the overall industrial
market, according to Torto Wheaton Research. Rents on industrial
renewals and rollovers in our portfolio decreased 1.0% during
2002 and 10.1% during 2003.


During 2003, our dispositions and contributions
(to a joint venture in which we retained a 15% ownership
interest in exchange for cash) totaled $366.3 million, including
assets in markets that no longer fit our investment strategy and
properties at valuations that we considered to be at premium
levels. Because we did not immediately reinvest sales proceeds
into attractively priced industrial assets, these sales and
contributions have diluted our near-term operating results.
However, we believe they help position us for long-term growth
and higher returns on invested capital by increasing the
strategic fit of our portfolio with our investment and private
capital models. Further, proceeds from these sales, along with
our balance sheet and private capital sources, create
significant capacity for future deployment. While we will
continue to sell assets on an opportunistic basis, we believe
that we have substantially achieved our near-term strategic
disposition goals.

During 2003, we also expanded our development
staff and capabilities, because we believe that development,
renovation and expansion of well-located, high-quality
industrial properties should generally continue to provide us
with attractive investment opportunities at a higher rate of
return than we may obtain from the purchase of existing
properties. In 2003, Eugene F. Reilly joined AMB Property
Corporation, our general partner, as Executive Vice President of
North American Development, adding to our in-house development
team. We have increased our development pipeline from a low of
$107.0 million at the end of 2002 to $233.0 million at
the end of 2003. In addition to our committed development
pipeline, we hold over 600 acres of land, which could support
approximately 10.0 million square feet of additional
development.

Going forward, we believe that our co-investment
program with private-capital investors will continue to serve as
a significant source of revenues and capital for acquisitions
and developments. Through these co-investment joint ventures we
earn acquisition and development fees, asset management fees and
priority distributions as well as promoted interests and
incentive fees based on the performance of the co-investment
joint ventures; however, there can be no assurance that we will
continue to do so. As of December 31, 2003, we owned
approximately 32.1 million square feet of our properties
(34.7% of the total consolidated operating and development
portfolio) through our co-investment joint ventures. We may make
additional investments through these joint ventures or new joint
ventures in the future and presently plan to do so.

Over the next three-to-four years, we expect to
have approximately 15% of our portfolio (based on consolidated
annualized base rent) invested in international markets. Our
Mexican target markets currently include Mexico City,
Guadalajara and Monterrey. Our European target markets currently
include Paris, Amsterdam, Frankfurt, Madrid and London. Our
Asian target markets currently include Singapore, Hong Kong and
Tokyo. It is possible that our target markets will change over
time to reflect experience, market opportunities, customer needs
and changes in global distribution patterns. As of
December 31, 2003, our international operating properties
comprised 3.0% of our total annualized base rent.

For our general partner to maintain its
qualification as a real estate investment trust, AMB Property
Corporation must pay dividends to its stockholders aggregating
annually at least 90% of its taxable income, which is
substantially the same as our taxable income. As a result, we
cannot rely on retained earnings to fund our on-going operations
to the same extent that other companies whose parent companies
are not real estate investment trusts can. We must continue to
raise capital to fund our working capital needs, acquisitions
and developments. See Liquidity and Capital
Resources for a complete discussion of the sources of our
capital.

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Summary of Key Transactions in 2003

During the year ended December 31, 2003, we
completed the following capital deployment transactions:



| |   |                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Acquired 82 buildings in the U.S., Mexico, Europe
    and Asia, aggregating approximately 6.5 million square
    feet, for $533.9 million, including $238.3 million
    invested through two of our co-investment joint ventures;                                                                                               
|
| |  | Completed industrial development projects in the
    U.S., Mexico and Europe, comprising 1.6 million square
    feet, for a total investment of $105.7 million;                                                                                                                                                                 
|
| |  | Expanded our development pipeline, which at
    December 31, 2003, included projects in the U.S., Mexico,
    Singapore and Spain totaling 5.0 million square feet with an
    expected total investment of $233.0 million, of which
    $91.2 million was invested as of December 31, 2003 and
    of which 34% was pre-leased;
|
| |  | Divested ourselves of 24 industrial buildings and
    two retail centers, aggregating approximately 2.8 million
    square feet, for an aggregate price of $272.3 million; and                                                                                                                                                  
|
| |  | Contributed $94.0 million in operating
    properties to our newly formed unconsolidated joint venture, in
    which we retained a 15% interest.                                                                                                                                                                                

See Part IV. Item 15: Notes 4 and 5 of the
Notes to Consolidated Financial Statements for a
more detailed discussion of our acquisition, development and
disposition activity.

During the year ended December 31, 2003, we
completed the following capital markets transactions:



| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Raised $103.4 million, net of costs, from
    the issuances by AMB Property Corporation of $50.0 million
    of its 6.5% Series L Cumulative Redeemable Preferred Stock
    and $57.5 million of its 6.75% Series M Cumulative
    Redeemable Preferred Stock;
|
| |  | Raised $125.0 million from the issuance of
    $75.0 million of 5.53%, 10-year, unsecured fixed-rate notes
    and $50.0 million of floating rate unsecured notes at a
    rate of three month-LIBOR telerate plus 40 basis points;                           
|
| |  | Redeemed all of our outstanding 8.5%
    Series A Cumulative Redeemable Preferred Units and all of
    our outstanding 8 5/8% Series B Cumulative Redeemable
    Preferred Units for an aggregate of $165.8 million;                                          
|
| |  | AMB Property Corporation repurchased 812,900
    shares of its common stock for $21.2 million and we retired
    the same number of common general partnership units;                                                                                         
|
| |  | Obtained long-term secured debt financing for our
    co-investment joint ventures totaling $177.0 million at an
    average rate of 4.3%; and                                                                                                                
|
| |  | Repaid the $45.5 million outstanding balance
    on the AMB Institutional Alliance Fund II, L.P. credit facility
    with capital contributions and secured debt financing proceeds.                                                                          

See Part IV. Item 15: Notes 7, 10 and 12 of
the Notes to Consolidated Financial Statements for a
more detailed discussion of our capital markets transactions.

Critical Accounting Policies

Our discussion and analysis of financial
condition and results of operations is based on our consolidated
financial statements, which have been prepared in accordance
with accounting principles generally accepted in the U.S.
(GAAP). The preparation of these financial
statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities and
contingencies as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. We evaluate our assumptions and estimates on an
on-going basis. We base our estimates on historical experience
and on various other assumptions that we believe to be
reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under
different assumptions or conditions.

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We believe the following critical accounting
policies affect our more significant judgments and estimates
used in the preparation of our consolidated financial statements:


Restatement of Depreciation Expense.On October 12, 2004, our general
partner announced a restatement of depreciation expense for our
prior period results relating to 39 buildings in our portfolio,
38 of which are located on-tarmac, which is land owned by
federal, state or local airport authorities. As part of
managements on-going review of our accounting policies and
internal control over financial reporting, management determined
that we should have depreciated certain of our investments in
buildings that reside on land subject to ground leases over the
remaining terms of the ground leases, rather than over
40 years, which is the period used to depreciate buildings
that we hold in fee simple. We did not segregate these assets
into a separate expected useful life category for depreciation
purposes. Our management determined that the internal control
deficiency that resulted in this restatement represents a
material weakness, as defined by the Public Company Accounting
Oversight Boards Auditing Standard No. 2. In
connection with correcting this error, management has taken
appropriate action to modify our system of internal control over
financial reporting to remediate this internal control
deficiency. Going forward, these assets will be depreciated over
the lesser of 40 years or the contractual term of the
underlying ground lease. A description of this weakness and the
related remediation measures that have been undertaken by us is
set forth in Part II, Item 9A, Controls and Procedures of
this Form 10-K/ A.

Investments in Real Estate.Investments in real estate are stated
at cost unless circumstances indicate that cost cannot be
recovered, in which case, the carrying value of the property is
reduced to estimated fair value. We also record at acquisition
an intangible asset or liability for the value attributable to
above or below-market leases, in-place leases and lease
origination costs for all acquisitions subsequent to
July 1, 2001. Carrying values for financial reporting
purposes are reviewed for impairment on a property-by-property
basis whenever events or changes in circumstances indicate that
the carrying value of a property may not be recoverable.
Impairment is recognized when estimated expected future cash
flows (undiscounted and without interest charges) are less than
the carrying amount of the property. The estimation of expected
future net cash flows is inherently uncertain and relies on
assumptions regarding current and future market conditions and
the availability of capital. Examples of certain situations that
could affect future cash flows of a property may include, but
are not limited to: significant decreases in occupancy;
unforeseen bankruptcy, lease termination and move-out of a major
customer; or a significant decrease in annual base rents of that
property. If impairment analysis assumptions change, then an
adjustment to the carrying amount of our long-lived assets could
occur in the future period in which the assumptions change. To
the extent that a property is impaired, the excess of the
carrying amount of the property over its estimated fair value is
charged to earnings.

Revenue Recognition.We record rental revenue from
operating leases on a straight-line basis over the term of the
leases and maintain an allowance for estimated losses that may
result from the inability of our customers to make required
payments. If customers fail to make contractual lease payments
that are greater than our allowance for doubtful accounts,
security deposits and letters of credit, then we may have to
recognize additional doubtful account charges in future periods.
We monitor the liquidity and creditworthiness of our customers
on an on-going basis. Each period we review our outstanding
accounts receivable, including straight-line rents, for doubtful
accounts and provide allowances as needed. We also record lease
termination fees when a customer has executed a definitive
termination agreement with us and the payment of the termination
fee is not subject to any conditions that must be met or waived
before the fee is due to us.

Property Dispositions.We report real estate dispositions in
three separate categories on our consolidated statements of
operations. First, when we contribute properties to our joint
ventures, we recognize gains representing the portion of the
contributed properties acquired by the third-party investors to
the extent of cash proceeds received. We also dispose of
value-added conversion projects and build-to-suit and
speculative development projects that we have held as
development projects available for sale. The gain or loss
recognized from the disposition of these projects is reported
net of estimated taxes, when applicable. Lastly, beginning in
2002, SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, required us to separately
report as discontinued operations the historical operating
results attributable to operating properties sold and the
applicable gain or loss on the disposition of the properties.
The consolidated statements of

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operations for prior periods are also adjusted to
conform with this classification. There is no impact on our
previously reported consolidated financial position, net income
or cash flows.


Joint Ventures.We
hold interests in both consolidated and unconsolidated joint
ventures. Our joint venture investments do not meet the variable
interest entity criteria under FASB Interpretation No. 46R,
Consolidation of Variable Interest Entities. Therefore,
we determine consolidation based on standards set forth in EITF
96-16, Investors Accounting for an Investee When the
Investor Has a Majority of the Voting Interest but the Minority
Shareholder or Shareholders Have Certain Approval or Veto
Rights, and Statement of Position 78-9, Accounting for
Investments in Real Estate Ventures. Based on the guidance
set forth in these pronouncements, we consolidate certain joint
venture investments because we own a majority interest or
exercise significant control over major operating decisions,
such as approval of budgets, selection of property managers,
asset management, investment activity and changes in financing.
For joint ventures where we do not own a majority interest or do
not exercise significant control over major operating and
management decisions, we use the equity method of accounting and
do not consolidate the joint venture for financial reporting
purposes.

Our General Partners Status as a Real
Estate Investment Trust.As a real
estate investment trust, AMB Property Corporation, our general
partner, generally will not be subject to corporate level
federal income taxes if minimum distribution, income, asset and
shareholder tests are met. However, not all of its underlying
entities, which are also our subsidiaries, are qualified REIT
subsidiaries and may be subject to federal and state taxes, when
applicable. In addition, foreign entities may be subject to the
taxes of the host country. An income tax allocation is required
to be estimated on our taxable income arising from the taxable
REIT subsidiaries and foreign entities. A deferred tax component
could arise based upon the differences in GAAP versus tax income
for items such as depreciation and gain recognition. However,
deferred tax is an immaterial component of our consolidated
balance sheet because of our general partners status as a
real estate investment trust.

RESULTS OF OPERATIONS

The analysis below includes changes attributable
to same store growth, acquisitions, development activity and
divestitures. Same store properties are those that we owned
during both the current and prior year reporting periods,
excluding development properties prior to being stabilized
subsequent to December 31, 2001 (generally defined as
properties that are 90% leased or properties for which we have
held a certificate of occupancy or where building has been
substantially complete for at least 12 months). As of
December 31, 2003, same store industrial properties
consisted of properties aggregating approximately
72.0 million square feet. The properties acquired during
2003, consisted of 82 buildings, aggregating approximately
6.5 million square feet. The properties acquired during
2002 consisted of 43 buildings, aggregating approximately
5.4 million square feet. During 2003, property divestitures
and contributions consisted of 48 industrial buildings and two
retail centers, aggregating approximately 5.3 million
square feet. In 2002, property divestitures consisted of 58
industrial and two retail buildings, aggregating approximately
5.7 million square feet. Our future financial condition and
results of operations, including rental revenues, may be
impacted by the acquisition of additional properties and
dispositions. Our future revenues and expenses may vary
materially from historical results.

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For the Years Ended December 31, 2003 and
2002 (dollars in millions)

|                       |                          |                       |                |      |       |          |      |          |       |       |     |      |       |      |      |       |       |     |  
|---------------------- | ------------------------ | --------------------- | -------------- | ---- | ----- | -------- | ---- | -------- | ----- | ----- | --- | ---- | ----- | ---- | ---- | ----- | ----- | --- | -
|Revenues               |                          | 2003                  |                | 2002 |       | $ Change |      | % Change
|                       |                          |                       |                |      |       |          |      |         
|Rental revenues        |                          |                       |                |      |       |          |      |          |       |       |     |      |       |      |      |      
|                       | U.S. industrial:         |                       |                |      |       |          |      |          |       |       |     |      |       |      |      |       |      
|                       |                          | Same store            |                | $    | 509.2 |          |      | $        | 529.2 |       |     | $    | (20.0 | )    |      |       | (3.8  | )% 
|                       |                          | 2002 acquisitions     |                |      | 55.0  |          |      |          | 22.0  |       |     |      | 33.0  |      |      |       | 150.0 | %  
|                       |                          | 2003 acquisitions     |                |      | 14.6  |          |      |          |      |       |     |      | 14.6  |      |      |       |      | %  
|                       |                          | Development           |                |      | 3.7   |          |      |          | 2.9   |       |     |      | 0.8   |      |      |       | 27.6  | %  
|                       |                          | Other industrial      |                |      | 6.4   |          |      |          | 15.9  |       |     |      | (9.5  | )    |      |       | (59.7 | )% 
|                       | International industrial |                       |                | 6.1  |       |          |      | 0.7      |       |       |     | 5.4  |       |      |      | 771.4 | %    
|                       | Retail                   |                       |                | 6.7  |       |          |      | 7.8      |       |       |     | (1.1 | )     |      |      | (14.1 | )%   
|                       |                          |                       |                |      |       |          |      |          |       |       |     |      |       |      |      |      
|                       |                          | Total rental revenues |                |      | 601.7 |          |      |          | 578.5 |       |     |      | 23.2  |      |      |       | 4.0   | %  
|Private capital income |                          |                       | 3.3            |      |       |          | 11.2 |          |       |       | 2.1 |      |       |      | 18.8 | %    
|                       |                          |                       |                |      |       |          |      |          |       |       |     |      |       |      |      |      
|                       |                          |                       | Total revenues |      | $     | 615.0    |      |          | $     | 589.7 |     |      | $     | 25.3 |      |       |       | 4.3 | %
|                       |                          |                       |                |      |       |          |      |          |       |       |     |      |       |      |      |      

The decrease in U.S. industrial same store
rental revenues resulted primarily from lower average
occupancies, rental revenue decreases in our San Francisco
Bay Area sub-market totaling $14.9 million, increased
allowances for doubtful accounts of $3.3 million, and
decreased straight-line rents of $1.3 million, partially
offset by an increase in lease termination fees and
miscellaneous income of $0.9 million and fixed rent
increases on existing leases. Industrial same store occupancy
was 93.0% at December 31, 2003, and 95.0% at
December 31, 2002. For the year ended December 31,
2003, rents in the same store portfolio decreased 10.6% on
industrial renewals and rollovers (cash basis) on
16.2 million square feet leased. The properties acquired
during 2002 consisted of 43 buildings, aggregating approximately
5.4 million square feet. The properties acquired during
2003 consisted of 82 buildings, aggregating approximately
6.5 million square feet. Other industrial includes rental
revenues from divested properties not classified as discontinued
operations. In 2003, we acquired properties in Mexico and
France, resulting in increased international industrial
revenues. The increase in private capital income was primarily
due to incentive distributions earned from AMB Partners II,
L.P.

|                                          |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |      |       |     |  
|----------------------------------------- | ------------------------ | ------------------------------ | ------------------------ | ---------- | ----- | ---------- | ----- | ---------- | ----- | ----- | ---- | ---- | ---- | ---- | ---- | ---- | ----- | --- | -
|Costs and Expenses                        |                          | 2003                           |                          | 2002       |       | $ Change   |       | % Change  
|                                          |                          |                                |                          |            |       |            |       |           
|                                          |                          | (Restated)                     |                          | (Restated) |       | (Restated) |       | (Restated)
|Property operating costs:                 |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     
|                                          | Rental expenses          |                                | $                        | 88.5       |       |            | $     | 76.4       |       |       | $    | 12.1 |      |      |      | 15.8 | %    
|                                          | Real estate taxes        |                                |                          | 71.4       |       |            |       | 67.7       |       |       |      | 3.7  |      |      |      | 5.5  | %    
|                                          |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     
|                                          |                          | Total property operating costs |                          | $          | 159.9 |            |       | $          | 144.1 |       |      | $    | 15.8 |      |      |      | 11.0  | %  
|                                          |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     
|Property operating costs U.S. industrial: |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     
|                                          |                          | Same store                     |                          | $          | 128.6 |            |       | $          | 125.2 |       |      | $    | 3.4  |      |      |      | 2.7   | %  
|                                          |                          | 2002 acquisitions              |                          |            | 17.6  |            |       |            | 6.8   |       |      |      | 10.8 |      |      |      | 158.8 | %  
|                                          |                          | 2003 acquisitions              |                          |            | 3.6   |            |       |            |      |       |      |      | 3.6  |      |      |      |      | %  
|                                          |                          | Development                    |                          |            | 3.3   |            |       |            | 3.8   |       |      |      | (0.5 | )    |      |      | (13.2 | )% 
|                                          |                          | Other industrial               |                          |            | 3.9   |            |       |            | 5.7   |       |      |      | (1.8 | )    |      |      | (31.6 | )% 
|                                          | International industrial |                                |                          | 0.4        |       |            |       |           |       |       |      | 0.4  |      |      |      |     | %    
|                                          | Retail                   |                                |                          | 2.5        |       |            |       | 2.6        |       |       |      | (0.1 | )    |      |      | (3.8 | )%   
|                                          |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     
|                                          |                          | Total property operating costs |                          |            | 159.9 |            |       |            | 144.1 |       |      |      | 15.8 |      |      |      | 11.0  | %  
|Depreciation and amortization             |                          |                                | 139.0                    |            |       |            | 126.9 |            |       |       | 12.1 |      |      |      | 9.5  | %   
|Impairment losses                         |                          |                                | 5.3                      |            |       |            | 2.9   |            |       |       | 2.4  |      |      |      | 82.8 | %   
|General and administrative                |                          |                                | 47.7                     |            |       |            | 47.2  |            |       |       | 0.5  |      |      |      | 1.1  | %   
|                                          |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     
|                                          |                          |                                | Total costs and expenses |            | $     | 351.9      |       |            | $     | 321.1 |      |      | $    | 30.8 |      |      |       | 9.6 | %
|                                          |                          |                                |                          |            |       |            |       |            |       |       |      |      |      |      |      |     

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The $3.4 million increase in same store
properties operating expenses was primarily due to
increases in common area maintenance expenses of
$3.4 million, including snow removal, and real estate taxes
of $0.9 million, partially offset by a decrease in
insurance expenses of $1.2 million. The 2002 acquisitions
consisted of 43 buildings, aggregating approximately
5.4 million square feet. The 2003 acquisitions consist of
82 buildings, aggregating approximately 6.5 million square
feet. Other industrial includes expenses from divested
properties not classified as discontinued operations. The
increase in depreciation and amortization expense was due to the
increase in our net investment in real estate and ground lease
assets, partially offset by a reduction of $2.1 million for
the recovery, through the settlement of a lawsuit, of capital
expenditures paid in prior years. The 2003 impairment loss was
on investments in real estate and leasehold interests that we
continue to hold for long-term investment. The 2002 impairment
included losses for lease cost write-offs of $1.7 million
and an impairment on a portion of our planned property
contributions of $1.2 million. The increase in general and
administrative expenses was primarily due to increased
stock-based compensation expense of $2.8 million resulting
from our decision to expense stock options under
SFAS No. 123 prospectively and the issuance of
additional restricted stock, partially offset by decreased
personnel costs and taxes.

|                                                        |                                   |      |        |        |   |          |        |          |   |   |      |       |   |  |         |      |   
|------------------------------------------------------- | --------------------------------- | ---- | ------ | ------ | - | -------- | ------ | -------- | - | - | ---- | ----- | - |  | ------- | ---- | --
|Other Income and (Expenses)                             |                                   | 2003 |        | 2002   |   | $ Change |        | % Change
|                                                        |                                   |      |        |        |   |          |        |         
|Equity in earnings of unconsolidated joint
    ventures |                                   | $    | 5.5    |        |   | $        | 5.7    |          |   | $ | (0.2 | )     |   |  | (3.5    | )%  
|Interest and other income                               |                                   |      | 4.7    |        |   |          | 10.4   |          |   |   | (5.7 | )     |   |  | (54.8   | )%  
|Gains from dispositions of real estate                  |                                   |      | 7.4    |        |   |          | 2.5    |          |   |   | 4.9  |       |   |  | 196.0   | %   
|Development profits, net of taxes                       |                                   |      | 14.4   |        |   |          | 1.2    |          |   |   | 13.2 |       |   |  | 1,100.0 | %   
|Interest, including amortization                        |                                   |      | (146.8 | )      |   |          | (146.2 | )        |   |   | 0.6  |       |   |  | 0.4     | %   
|                                                        |                                   |      |        |        |   |          |        |          |   |   |      |       |   |  |         |     
|                                                        | Total other income and (expenses) |      | $      | (114.8 | ) |          | $      | (126.4   | ) |   | $    | (11.6 | ) |  |         | (9.2 | )%
|                                                        |                                   |      |        |        |   |          |        |          |   |   |      |       |   |  |         |     

The decrease in interest and other income was
primarily due to the repayment in full of a $74.0 million
9.5% mortgage note receivable in July 2002. The increase in
gains from dispositions of real estate (not classified as
discontinued operations) resulted from our contribution of
$94.0 million in operating properties to our newly formed
co-investment joint venture, Industrial Fund I, LLC, in
February 2003. We recognized a gain of $7.4 million on the
contribution, representing the portion of the contributed
properties acquired by the third-party investors. During 2002,
we sold two industrial buildings and one retail center,
aggregating approximately 0.8 million square feet, for an
aggregate price of $50.6 million, with a resulting loss of
$0.8 million. In June 2002, we also contributed
$76.9 million in operating properties to our consolidated
co-investment joint venture, AMB-SGP, LP. We recognized a gain
of $3.3 million on the contribution, representing the
portion of the contributed properties acquired by the
third-party investors. The property contributions and 2002
divestitures of properties held for disposition at
December 31, 2001, were not classified as discontinued
operations under the provisions of SFAS No. 144. The
increase in development profits, net of taxes, resulted from an
increased sales volume of $57.8 million in 2003.

|                                                                              |                               |      |      |      |  |          |      |          |  |   |       |       |   |  |       |       |   
|----------------------------------------------------------------------------- | ----------------------------- | ---- | ---- | ---- |  | -------- | ---- | -------- |  | - | ----- | ----- | - |  | ----- | ----- | --
|Discontinued Operations                                                       |                               | 2003 |      | 2002 |  | $ Change |      | % Change
|                                                                              |                               |      |      |      |  |          |      |         
|Income attributable to discontinued operations,
    net of minority interests |                               | $    | 8.5  |      |  | $        | 20.6 |          |  | $ | (12.1 | )     |   |  | (58.7 | )%   
|Gains from dispositions of real estate, net of
    minority interests         |                               |      | 42.9 |      |  |          | 16.9 |          |  |   | 26.0  |       |   |  | 153.8 | %    
|                                                                              |                               |      |      |      |  |          |      |          |  |   |       |       |   |  |       |      
|                                                                              | Total discontinued operations |      | $    | 51.4 |  |          | $    | 37.5     |  |   | $     | (13.9 | ) |  |       | (37.1 | )%
|                                                                              |                               |      |      |      |  |          |      |          |  |   |       |       |   |  |       |      

During 2003, we divested ourselves of 24
industrial buildings and two retail centers, aggregating
approximately 2.8 million square feet, for an aggregate
price of $272.3 million, with a resulting net gain of
$42.9 million. During 2002, we divested ourselves of 56
industrial buildings, one retail center and an undeveloped land
parcel, aggregating approximately 4.9 million square feet,
for an aggregate price of $193.4 million, with a resulting
net gain of $10.6 million. In November 2002, our joint
venture partner in

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AMB Partners II, L.P. increased its
ownership in AMB Partners II, L.P. from 50% to 80% by
acquiring 30% of our interest in AMB Partners II, L.P. We
recognized a gain of $6.3 million on the sale of our 30%
interest.


|                                                                   |                       |      |      |       |   |          |      |          |   |   |      |      |   |  |          |       |   
|------------------------------------------------------------------ | --------------------- | ---- | ---- | ----- | - | -------- | ---- | -------- | - | - | ---- | ---- | - |  | -------- | ----- | --
|Preferred Units                                                    |                       | 2003 |      | 2002  |   | $ Change |      | % Change
|                                                                   |                       |      |      |       |   |          |      |         
|Preferred unit distributions                                       |                       | $    | (7.0 | )     |   | $        | (8.5 | )        |   | $ | 1.5  |      |   |  | 17.6     | %    
|Preferred unit redemption discount/(issuance
    costs or premium) |                       |      | (5.4 | )     |   |          | 0.4  |          |   |   | (5.8 | )    |   |  | (1,450.0 | )%   
|                                                                   |                       |      |      |       |   |          |      |          |   |   |      |      |   |  |          |      
|                                                                   | Total preferred units |      | $    | (12.4 | ) |          | $    | (8.1     | ) |   | $    | (4.3 | ) |  |          | (53.1 | )%
|                                                                   |                       |      |      |       |   |          |      |          |   |   |      |      |   |  |          |      

In July 2003, we redeemed all 3,995,800
outstanding units of our 8.5% Series A Cumulative
Redeemable Preferred Units and recognized a reduction of income
available to common unitholders of $3.7 million for the
original issuance costs. In addition, on November 26, 2003,
we redeemed all 1,300,000 of our outstanding 8 5/8%
Series B Cumulative Redeemable Preferred Partnership Units
and we recognized a reduction of income available to common
unitholders of $1.7 million for the original issuance costs.

For the Years Ended December 31, 2002 and
2001 (dollars in millions)

|                       |                          |                       |                |      |       |          |      |          |       |       |     |     |       |      |     |     |       |      |  
|---------------------- | ------------------------ | --------------------- | -------------- | ---- | ----- | -------- | ---- | -------- | ----- | ----- | --- | --- | ----- | ---- | --- | --- | ----- | ---- | -
|Revenues               |                          | 2002                  |                | 2001 |       | $ Change |      | % Change
|                       |                          |                       |                |      |       |          |      |         
|Rental revenues        |                          |                       |                |      |       |          |      |          |       |       |     |     |       |      |     |    
|                       | U.S. industrial:         |                       |                |      |       |          |      |          |       |       |     |     |       |      |     |     |      
|                       |                          | Same store            |                | $    | 529.2 |          |      | $        | 484.1 |       |     | $   | 45.1  |      |     |     | 9.3   | %   
|                       |                          | 2002 acquisitions     |                |      | 22.0  |          |      |          |      |       |     |     | 22.0  |      |     |     |      | %   
|                       |                          | Development           |                |      | 2.9   |          |      |          | 1.9   |       |     |     | 1.0   |      |     |     | 52.6  | %   
|                       |                          | Other industrial      |                |      | 15.9  |          |      |          | 29.6  |       |     |     | (13.7 | )    |     |     | (46.3 | )%  
|                       | International industrial |                       |                | 0.7  |       |          |      |         |       |       |     | 0.7 |       |      |     |    | %    
|                       | Retail                   |                       |                | 7.8  |       |          |      | 7.7      |       |       |     | 0.1 |       |      |     | 1.3 | %    
|                       |                          |                       |                |      |       |          |      |          |       |       |     |     |       |      |     |    
|                       |                          | Total rental revenues |                |      | 578.5 |          |      |          | 523.3 |       |     |     | 55.2  |      |     |     | 10.5  | %   
|Private capital income |                          |                       | 11.2           |      |       |          | 11.0 |          |       |       | 0.2 |     |       |      | 1.8 | %  
|                       |                          |                       |                |      |       |          |      |          |       |       |     |     |       |      |     |    
|                       |                          |                       | Total revenues |      | $     | 589.7    |      |          | $     | 534.3 |     |     | $     | 55.4 |     |     |       | 10.4 | %
|                       |                          |                       |                |      |       |          |      |          |       |       |     |     |       |      |     |    

The growth in rental revenues in same store
properties resulted primarily from increased lease termination
fees and miscellaneous income of $13.8 million, rental
revenue growth before lease-termination fees in our Los Angeles
and San Francisco Bay Area sub-markets of
$11.0 million and $7.6 million, respectively, and
increased reimbursement of expenses of $7.7 million,
partially offset by lower average occupancies. Industrial same
store occupancy was 94.6% at December 31, 2002, and 94.6%
at December 31, 2001. In 2002, the same store rent decrease
on industrial renewals and rollovers (cash basis) was 1.4% on
13.8 million square feet leased. Other industrial revenues
include rental revenues from divested properties not classified
as discontinued operations.

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|                              |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |      |       |      |  
|----------------------------- | ------------------------------ | ------------------------------ | ------------------------ | ---------- | ----- | ---------- | ----- | ---------- | ----- | ----- | ----- | ---- | ---- | ---- | ----- | ---- | ----- | ---- | -
|Costs and Expenses            |                                | 2002                           |                          | 2001       |       | $ Change   |       | % Change  
|                              |                                |                                |                          |            |       |            |       |           
|                              |                                | (Restated)                     |                          | (Restated) |       | (Restated) |       | (Restated)
|Property operating costs:     |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     
|Rental expenses               |                                | $                              | 76.4                     |            |       | $          | 63.7  |            |       | $     | 12.7  |      |      |      | 19.9  | %   
|Real estate taxes             |                                |                                | 67.7                     |            |       |            | 62.6  |            |       |       | 5.1   |      |      |      | 8.1   | %   
|                              |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     
|                              | Total property operating costs |                                | $                        | 144.1      |       |            | $     | 126.3      |       |       | $     | 17.8 |      |      |       | 14.1 | %    
|                              |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     
|Property operating costs:     |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     
|                              | U.S. industrial:               |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |      |      
|                              |                                | Same store                     |                          | $          | 125.2 |            |       | $          | 112.4 |       |       | $    | 12.8 |      |       |      | 11.4  | %   
|                              |                                | 2002 acquisitions              |                          |            | 6.9   |            |       |            |      |       |       |      | 6.9  |      |       |      |      | %   
|                              |                                | Development                    |                          |            | 3.4   |            |       |            |      |       |       |      | 3.4  |      |       |      |      | %   
|                              |                                | Other industrial               |                          |            | 6.1   |            |       |            | 11.1  |       |       |      | (5.0 | )    |       |      | (45.0 | )%  
|                              | International industrial       |                                |                          | (0.1       | )     |            |       |           |       |       |       | (0.1 | )    |      |       |     | %    
|                              | Retail                         |                                |                          | 2.6        |       |            |       | 2.8        |       |       |       | (0.2 | )    |      |       | (7.1 | )%   
|                              |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     
|                              |                                | Total property operating costs |                          |            | 144.1 |            |       |            | 126.3 |       |       |      | 17.8 |      |       |      | 14.1  | %   
|Depreciation and amortization |                                |                                | 126.9                    |            |       |            | 105.7 |            |       |       | 21.2  |      |      |      | 20.1  | %   
|Impairment losses             |                                |                                | 2.9                      |            |       |            | 18.6  |            |       |       | (15.7 | )    |      |      | (84.4 | )%  
|General and administrative    |                                |                                | 47.2                     |            |       |            | 35.8  |            |       |       | 11.4  |      |      |      | 31.8  | %   
|                              |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     
|                              |                                |                                | Total costs and expenses |            | $     | 321.1      |       |            | $     | 286.4 |       |      | $    | 34.7 |       |      |       | 12.1 | %
|                              |                                |                                |                          |            |       |            |       |            |       |       |       |      |      |      |       |     

The $12.8 million increase in same store
properties operating expenses primarily relates to
increases in real estate taxes of $5.1 million, insurance
expenses of $4.3 million and increases in common area
maintenance expenses of $2.7 million. Other industrial
property operating costs include expenses from sold properties
not classified as discontinued operations. The increase in
depreciation expense was due to the increase in our net
investment in real estate and ground lease assets. The 2002
impairment included losses for lease cost write-offs of
$1.7 million and an impairment on a portion of our planned
property contributions of $1.2 million. The 2001 impairment
loss included losses for investments in retail real estate
totaling $13.0 million, leasehold interests that we
continue to hold for long-term investment totaling
$4.3 million and industrial real estate properties held for
disposition totaling $1.3 million. The increase in general
and administrative expenses was primarily due to the
consolidation of AMB Investment Management, Inc.
(predecessor-in-interest to AMB Capital Partners, LLC) and
Headlands Realty Corporation on May 31, 2001. Prior to
May 31, 2001, general and administrative expenses did not
include expenses incurred by these two unconsolidated preferred
stock subsidiaries. General and administrative expenses would
have been $39.4 million had the subsidiaries been
consolidated beginning January 1, 2001. The increase in
general and administrative expenses was also due to increased
stock-based compensation expense due to our decision to expense
stock options under SFAS No. 123 prospectively,
additional staffing and expenses for new initiatives, including
our international expansion and income taxes for our taxable
REIT subsidiaries.

|                                                        |                                   |      |        |        |   |          |        |          |   |   |       |      |  |  |       |      |  
|------------------------------------------------------- | --------------------------------- | ---- | ------ | ------ | - | -------- | ------ | -------- | - | - | ----- | ---- |  |  | ----- | ---- | -
|Other Income and (Expenses)                             |                                   | 2002 |        | 2001   |   | $ Change |        | % Change
|                                                        |                                   |      |        |        |   |          |        |         
|Equity in earnings of unconsolidated joint
    ventures |                                   | $    | 5.7    |        |   | $        | 5.5    |          |   | $ | 0.2   |      |  |  | 3.6   | %   
|Interest and other income                               |                                   |      | 10.4   |        |   |          | 16.3   |          |   |   | (5.9  | )    |  |  | (36.2 | )%  
|Gains from dispositions of real estate                  |                                   |      | 2.5    |        |   |          | 41.9   |          |   |   | (39.4 | )    |  |  | (94.0 | )%  
|Development profits, net of taxes                       |                                   |      | 1.2    |        |   |          | 17.3   |          |   |   | (16.1 | )    |  |  | (93.1 | )%  
|Loss on investments in other companies                  |                                   |      |       |        |   |          | (20.8  | )        |   |   | 20.8  |      |  |  |      | %   
|Interest, including amortization                        |                                   |      | (146.2 | )      |   |          | (124.8 | )        |   |   | 21.4  |      |  |  | 17.1  | %   
|                                                        |                                   |      |        |        |   |          |        |          |   |   |       |      |  |  |       |     
|                                                        | Total other income and (expenses) |      | $      | (126.4 | ) |          | $      | (64.6    | ) |   | $     | 61.8 |  |  |       | 95.7 | %
|                                                        |                                   |      |        |        |   |          |        |          |   |   |       |      |  |  |       |     

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The decrease in interest and other income was
primarily due to the repayment in full of the $74.0 million
9.5% mortgage note receivable in July 2002. In 2001, we
recognized $20.8 million of losses on investments in other
companies, including our investment in Webvan Group, Inc. and
other technology-related companies. The loss reflects a 100%
write-down of the investments. No gains or losses were
recognized in 2002. The increase in interest expense was
primarily due to the issuance of additional unsecured senior
debt securities and an increase in secured debt balances,
partially offset by decreased borrowings on our unsecured credit
facility. The secured debt issuances were primarily for our
co-investment joint ventures properties.

|                                                                              |                               |      |      |      |  |          |      |          |  |   |      |      |  |  |      |       |  
|----------------------------------------------------------------------------- | ----------------------------- | ---- | ---- | ---- |  | -------- | ---- | -------- |  | - | ---- | ---- |  |  | ---- | ----- | -
|Discontinued Operations                                                       |                               | 2002 |      | 2001 |  | $ Change |      | % Change
|                                                                              |                               |      |      |      |  |          |      |         
|Income attributable to discontinued operations,
    net of minority interests |                               | $    | 20.6 |      |  | $        | 18.0 |          |  | $ | 2.6  |      |  |  | 14.4 | %    
|Gains from dispositions of real estate, net of
    minority interests         |                               |      | 16.9 |      |  |          |     |          |  |   | 16.9 |      |  |  |     | %    
|                                                                              |                               |      |      |      |  |          |      |          |  |   |      |      |  |  |      |      
|                                                                              | Total discontinued operations |      | $    | 37.5 |  |          | $    | 18.0     |  |   | $    | 19.5 |  |  |      | 108.3 | %
|                                                                              |                               |      |      |      |  |          |      |          |  |   |      |      |  |  |      |      

During 2002, we divested ourselves of 56
industrial buildings, one retail center and an undeveloped land
parcel, aggregating approximately 4.9 million square feet,
for an aggregate price of $193.4 million, with a resulting
net gain of $10.6 million. In November 2002, our joint
venture partner in AMB Partners II, L.P. increased its
ownership in AMB Partners II, L.P. from 50% to 80% by
acquiring 30% of our interest in AMB Partners II, L.P. We
recognized a gain of $6.3 million on the sale of our 30%
interest.

|                                                                   |                       |      |      |      |   |          |      |          |   |   |     |     |  |  |       |      |  
|------------------------------------------------------------------ | --------------------- | ---- | ---- | ---- | - | -------- | ---- | -------- | - | - | --- | --- |  |  | ----- | ---- | -
|Preferred Units                                                    |                       | 2002 |      | 2001 |   | $ Change |      | % Change
|                                                                   |                       |      |      |      |   |          |      |         
|Preferred unit distributions                                       |                       | $    | (8.5 | )    |   | $        | (8.5 | )        |   | $ |    |     |  |  |      | %   
|Preferred unit redemption discount/(issuance
    costs or premium) |                       |      | 0.4  |      |   |          | (7.6 | )        |   |   | 8.0 |     |  |  | 105.3 | %   
|                                                                   |                       |      |      |      |   |          |      |          |   |   |     |     |  |  |       |     
|                                                                   | Total preferred units |      | $    | (8.1 | ) |          | $    | (16.1    | ) |   | $   | 8.0 |  |  |       | 49.7 | %
|                                                                   |                       |      |      |      |   |          |      |          |   |   |     |     |  |  |       |     

On December 5, 2001, AMB Property II,
L.P. redeemed all of its 2,200,000 outstanding 8.75%
Series C Cumulative Redeemable Preferred Limited
Partnership Units at a premium of $4.4 million and we
recognized a reduction of income available to common unitholders
of $3.2 million for the original issuance costs. In July
2003, the U.S. Securities and Exchange Commission announced
that it had revised its position relating to the application of
Emerging Issues Task Force Topic No. D-42, The Effect on
the Calculation of Earnings per Share for the Redemption or
Induced Conversion of Preferred Stock, (Topic
D-42). As a result of this announcement, original issuance
costs related to preferred units are to be reflected as a
reduction of income available to common unitholders in
determining earnings per unit for the period in which the
preferred units are redeemed. The announcement requires
retroactive application of the revised position in previously
issued financial statements. As a result, our financial
statements for the year ending December 31, 2001, have been
restated to reflect a reduction in income available to common
unitholders of $3.2 million, representing the original
issuance costs of AMB Property II, L.P.s
series C preferred units. Diluted earnings per unit for the
year ended December 31, 2001, was $1.41 (restated). The
U.S. Securities and Exchange Commissions revised
position on Topic D-42 did not require us to file amendments to
previously filed reports and will not impact any other
previously reported periods.

LIQUIDITY AND CAPITAL RESOURCES

Balance Sheet
Strategy.In general, we use unsecured
lines of credit, unsecured notes, preferred units and common
units to capitalize our 100%-owned assets. Over time, we plan to
retire non-recourse, secured debt encumbering our 100%-owned
assets and replace that debt with unsecured notes. In managing
our co-investment joint ventures, in general, we use
non-recourse, secured debt to capitalize our co-investment joint
ventures.

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We currently expect that our principal sources of
working capital and funding for acquisitions, development,
expansion and renovation of properties will include:



| |   |                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------
| |  | retained earnings and cash flow from operations;                                                                                        
|
| |  | borrowings under our unsecured credit facility;                                                                                         
|
| |  | other forms of secured or unsecured financing;                                                                                          
|
| |  | proceeds from debt or limited partnership unit
    offerings (including issuances of limited partnership units by
    our subsidiaries);
|
| |  | net proceeds from divestitures of
    properties; and                                                                                   
|
| |  | private capital from co-investment partners.                                                                                            

We currently expect that our principal funding
requirements will include:



| |   |                                                                                 
| | - | --------------------------------------------------------------------------------
| |  | working capital;                                                                
|
| |  | development, expansion and renovation of
    properties;                        
|
| |  | acquisitions, including our global expansion;                                   
|
| |  | debt service; and                                                               
|
| |  | distributions on outstanding common and preferred
    limited partnership units.

We believe that our sources of working capital,
specifically our cash flow from operations, borrowings available
under our unsecured credit facility and our ability to access
private and public debt and equity capital, are adequate for us
to meet our liquidity requirements for the foreseeable future.
The unavailability of capital could adversely affect our
financial condition, results of operations, cash flow and
ability to make distributions to our unitholders and payments to
our noteholders.

Capital Resources

Property
Contributions.In February 2003, we
contributed $94.0 million in operating properties,
consisting of 24 industrial buildings, aggregating approximately
2.4 million square feet, to our newly formed unconsolidated
joint venture, Industrial Fund I, LLC, with Citigroup
Global Investments Real Estate LP, LLC, a Delaware limited
liability company, and recognized a gain of $7.4 million on
the contribution representing the portion of the contributed
properties acquired by the third-party co-investors in exchange
for cash.

Developments-for-Sale.During 2003, we sold seven development-for-sale and other
projects, for an aggregate price of $74.8 million, with a
resulting gain of $14.4 million, net of taxes.

Property
Divestitures.During 2003, we divested
ourselves of 24 industrial buildings and two retail centers, for
an aggregate price of $272.3 million, with a resulting net
gain of $42.9 million.

Properties Held for
Divestiture.As of December 31,
2003, we had decided to divest ourselves of one retail land
parcel and one industrial building, which are not in our core
markets or which do not meet our current strategic objectives.
The divestitures of the properties are subject to negotiation of
acceptable terms and other customary conditions. As of
December 31, 2003, the net carrying value of the properties
held for divestiture was $11.8 million.

Co-investment Joint
Ventures.We enter into co-investment
joint ventures with institutional investors. These co-investment
joint ventures provide us with an additional source of capital
to fund certain acquisitions, development projects and
renovation projects, as well as private capital income. We
consolidate these joint ventures for financial reporting
purposes because we are the sole managing general partner and
control all major operating decisions.

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Third-party equity interests in the joint
ventures are reflected as minority interests in the consolidated
financial statements. As of December 31, 2003, we owned
approximately 32.1 million square feet of our properties
(34.7% of the total consolidated operating and development
portfolio) through our co-investment joint ventures and
6.0 million square feet of our properties through our other
consolidated joint ventures. We may make additional investments
through these joint ventures or new joint ventures in the future
and presently plan to do so.

Our co-investment joint ventures at
December 31, 2003 (dollars in thousands):

|                                             |  |                                                                   |  |             |     |                   |  |   |         | 
|-------------------------------------------- |  | ----------------------------------------------------------------- |  | ----------- | --- | ----------------- |  | - | ------- | 
|                                             |  |                                                                   |  | Our         |     |                  
|                                             |  |                                                                   |  | Approximate |     |                  
|                                             |  |                                                                   |  | Ownership   |     | Original Planned 
|Co-investment Joint Venture                  |  | Joint Venture Partner                                             |  | Percentage  |     | Capitalization(1)
|                                             |  |                                                                   |  |             |     |                  
|AMB/Erie, L.P.                               |  | Erie Insurance Company and affiliates                             |  |             | 50% |                   |  | $ | 200,000 | 
|AMB Institutional Alliance
    Fund I, L.P.  |  | AMB Institutional Alliance REIT I, Inc.(2)                        |  |             | 21% |                   |  | $ | 420,000 | 
|AMB Partners II, L.P.                        |  | City and County of San Francisco
    Employees Retirement System |  |             | 20% |                   |  | $ | 500,000 | 
|AMB-SGP, L.P.                                |  | Industrial JV Pte Ltd(3)                                          |  |             | 50% |                   |  | $ | 425,000 | 
|AMB Institutional Alliance Fund II,
    L.P. |  | AMB Institutional Alliance REIT II, Inc.(4)                       |  |             | 20% |                   |  | $ | 489,000 | 
|AMB-AMS, L.P.(5)                             |  | BPMT and TNO(6)                                                   |  |             | 39% |                   |  | $ | 200,000 | 



---



|    |                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|(1) | Planned capitalization includes anticipated debt
    and both partners expected equity contributions.                             
|   
|(2) | Included 15 institutional investors as
    stockholders as of December 31, 2003.                                                   
|   
|(3) | A subsidiary of the real estate investment
    subsidiary of the Government of Singapore Investment Corporation.                   
|   
|(4) | Included 13 institutional investors as
    stockholders as of December 31, 2003.                                                   
|   
|(5) | AMB-AMS, L.P. is a commitment to form a
    co-investment partnership with two Dutch pension funds advised
    by Mn Services NV.  
|   
|(6) | BPMT is Stichting Bedrijfspensioenfonds voor de
    Metaal en Technische Bedrijfstakken and TNO is Stichting
    Pensioenfonds TNO.

Partners
Capital.As of December 31, 2003,
we had outstanding 81,563,502 common general partnership units,
4,763,790 common limited partnership units, 800,000
7.95% Series J Cumulative Redeemable Partnership
Units, 800,000 7.95% Series K Cumulative Redeemable
Partnership Units, 2,000,000 6.5% Series L Cumulative
Redeemable Partnership Units and 2,300,000
6.75% Series M Cumulative Redeemable Partnership Units.

On June 23, 2003, AMB Property Corporation
issued and sold 2,000,000 shares of 6.5% Series L
Cumulative Redeemable Preferred Stock at a price of
$25.00 per share. Dividends are cumulative from the date of
issuance and payable quarterly in arrears at a rate per share
equal to $1.625 per annum. The series L preferred
stock is redeemable by AMB Property Corporation on or after
June 23, 2008, subject to certain conditions, for cash at a
redemption price equal to $25.00 per share, plus accumulated and
unpaid dividends thereon, if any, to the redemption date. AMB
Property Corporation contributed the net proceeds of
$48.0 million to us, and in exchange, we issued to AMB
Property Corporation 2,000,000 6.5% Series L
Cumulative Redeemable Preferred Units. We used the proceeds, in
addition to proceeds previously contributed to us from other
equity issuances, to redeem all 3,995,800 of our
8.5% Series A Cumulative Redeemable Preferred Units
from AMB Property Corporation on July 28, 2003. AMB
Property Corporation, in turn, used those proceeds to redeem all
3,995,800 of its 8.5% Series A Cumulative Redeemable
Preferred Stock for $100.2 million, including all
accumulated and unpaid dividends thereon, to the redemption date.

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On November 25, 2003, AMB Property
Corporation issued and sold 2,300,000 shares of 6.75%
Series M Cumulative Redeemable Preferred Stock at $25.00
per share. Dividends are cumulative from the date of issuance
and payable quarterly in arrears at a rate per share equal to
$1.6875 per annum. The series M preferred stock is
redeemable by AMB Property Corporation on or after
November 25, 2008, subject to certain conditions, for cash
at a redemption price equal to $25.00 per share, plus
accumulated and unpaid dividends thereon, if any, to the
redemption date. AMB Property Corporation contributed the net
proceeds of $55.4 million to us, and in exchange, we issued
to AMB Property Corporation 2,300,000 6.75% Series M
Cumulative Redeemable Preferred Units.

On November 26, 2003, we redeemed all
1,300,000 of our outstanding 8 5/8% Series B
Cumulative Redeemable Preferred Partnership Units, for an
aggregate redemption price of $65.6 million, including
accrued and unpaid dividends.

In December 2003, AMB Property Corporations
board of directors approved a new two-year common stock
repurchase program for the repurchase of up to
$200.0 million of its common stock. During 2003, AMB
Property Corporation repurchased 812,900 shares of its
common stock for $21.2 million, including commissions, and
we retired the same number of common general partnership units.

In December 2001, AMB Property Corporations
board of directors approved a stock repurchase program for the
repurchase of up to $100.0 million worth of its common and
preferred stock. In December 2002, AMB Property
Corporations board of directors increased the 2001
repurchase program to $200.0 million. The 2001 stock
repurchase program expired in December 2003. During 2002, AMB
Property Corporation repurchased 2,651,600 shares of its
common stock for $69.4 million, including commissions, and
we retired the same number of common general partnership units.
In July 2002, AMB Property Corporation also repurchased
4,200 shares of its series A preferred stock for an
aggregate cost of $0.1 million, including accrued and
unpaid dividends, and we retired the same number of
series A preferred units.

During 2003, we redeemed 226,145 of our common
limited partnership units for cash and 2,000 of our common
limited partnership units for shares of AMB Property
Corporations common stock. In November 2003, AMB
Property II, L.P., one of our subsidiaries, also issued
145,548 of its class B common limited partnership units in
connection with a property acquisition. During 2002, we redeemed
122,640 of our common limited partnership units for shares of
AMB Property Corporations common stock.

Debt.In order to
maintain financial flexibility and facilitate the deployment of
capital through market cycles, we presently intend to operate
with a debt-to-total market capitalization ratio (our share) of
approximately 45% or less. As of December 31, 2003, our
share of total debt-to-total market capitalization ratio was
37.9%. However, we typically finance our co-investment joint
ventures with secured debt at a loan-to-value ratio of 50-65%,
per our joint venture partnership agreements. Additionally, we
currently intend to manage our capitalization in order to
maintain an investment grade rating on our senior unsecured
debt. Regardless of these policies, our organizational documents
do not limit the amount of indebtedness that we may incur.
Accordingly, our management could alter or eliminate these
policies without unitholder or noteholder approval or
circumstances could arise that could render us unable to comply
with these policies.

As of December 31, 2003, the aggregate
principal amount of our secured debt was $1.4 billion,
excluding unamortized debt premiums of $10.8 million. Of
the $1.4 billion of secured debt, $1.1 billion is
secured by properties in our joint ventures. The secured debt is
generally non-recourse and bears interest at rates varying from
2.6% to 10.6% per annum (with a weighted average rate of
7.0%) and final maturity dates ranging from June 2004 to June
2023. All of the secured debt bears interest at fixed rates,
except for five loans with an aggregate principal amount of
$52.3 million as of December 31, 2003, which bear
interest at variable rates (with a weighted average interest
rate of 3.2% as of December 31, 2003).

In June 1998, we issued $400.0 million of
unsecured senior debt securities. Interest on the unsecured
senior debt securities is payable semi-annually. The 2015 notes
are putable and callable in September 2005. In August 2000, we
commenced a medium-term note program and subsequently issued
$400.0 million of medium-term notes with a weighted average
interest rate of 7.3%. The notes mature between December 2005
and September 2011 and are guaranteed by AMB Property
Corporation.

33



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In May 2002, we commenced a new medium-term note
program for the issuance of up to $400.0 million in
principal amount of medium-term notes, which will be guaranteed
by AMB Property Corporation. On November 10, 2003, we
issued $75.0 million aggregate principal amount of senior
unsecured notes to Teachers Insurance and Annuity Association of
America. AMB Property Corporation guaranteed the principal
amount and interest on the notes, which mature on
November 1, 2013, and bear interest at 5.53% per
annum. Teachers has agreed that until November 10, 2005, we
can require Teachers to return the notes to us for cancellation
for an obligation of equal dollar amount under a first mortgage
loan to be secured by properties determined by us, except that
in the event the ratings on our senior unsecured debt are
downgraded by two ratings agencies to BBB, we will only have
ten days after the last of these downgrades to exercise this
right. During the period when we can exercise our cancellation
right and until any mortgage loans close, Teachers has agreed
not to sell, contract to sell, pledge, transfer or otherwise
dispose of, any portion of the notes. On November 21, 2003,
we issued $50.0 million aggregate principal amount of
floating rate senior unsecured notes. AMB Property Corporation
guaranteed the principal amount and interest on the notes, which
mature on November 21, 2006, and bear interest at a
floating rate of 3-month LIBOR telerate plus 40 basis
points. We intend to continue to issue medium-term notes,
guaranteed by AMB Property Corporation, under the program from
time to time as market conditions permit. As of
December 31, 2003, $275.0 million of capacity remained
under the May 2002 medium-term note program.

AMB Property Corporation guarantees our
obligations with respect to our senior debt securities. If we
are unable to refinance or extend principal payments due at
maturity or pay them with proceeds from other capital
transactions, then our cash flow may be insufficient to pay
distributions to our unitholders in all years, to make payments
to our noteholders and to repay debt upon maturity. Furthermore,
if prevailing interest rates or other factors at the time of
refinancing (such as the reluctance of lenders to make
commercial real estate loans) result in higher interest rates
upon refinancing, then the interest expense relating to that
refinanced indebtedness would increase. This increased interest
expense would adversely affect our financial condition, results
of operations, cash flow and ability to make distributions to
our unitholders and payments to our noteholders.

Credit Facilities.In December 2002, we renewed our $500.0 million unsecured
revolving line of credit. AMB Property Corporation guarantees
our obligations under the credit facility. The credit facility
matures in December 2005, has a one-year extension option and is
subject to a 20 basis point annual facility fee. The credit
facility includes a multi-currency component, which was amended
effective July 10, 2003, to increase from
$150.0 million to $250.0 million the amount that may
be drawn in either British pounds sterling, Euros or Yen
(provided that such currency is readily available and freely
transferable and convertible to U.S. dollars, the Reuters
Monitor Money Rates Service reports LIBOR for such currency in
interest periods of 1, 2, 3 or 6 months and we have an
investment grade credit rating). U.S. dollar borrowings
under the credit facility currently bear interest at LIBOR plus
60 basis points. Euro borrowings under the credit facility
currently bear interest at EURIBOR plus 60 basis points.
Yen borrowings under the credit facility currently bear interest
at the Japanese Yen TIBOR rate plus 60 basis points. Both
the facility fee and the interest rate are based on our credit
rating, which is currently investment grade. However, depending
on our credit rating, the facility fee and interest rate may
increase. We have the ability to increase available borrowings
to $700.0 million by adding additional banks to the
facility or obtaining the agreement of existing banks to
increase their commitments. We use the unsecured credit facility
principally for acquisitions, funding our development activity
and for general working capital requirements. Monthly debt
service payments on the credit facility are interest only. The
total amount available under the credit facility fluctuates
based upon the borrowing base, as defined in the agreement
governing the credit facility, generally the value of our
unencumbered properties. As of December 31, 2003, the
outstanding balance on our unsecured credit facility was
$275.7 million and the remaining amount available was
$171.6 million, net of outstanding letters of credit of
$52.7 million (excluding the $200.0 million of
potential additional capacity). The outstanding balance included
borrowings denominated in Euros and Yen and translated to
U.S. dollars at December 31, 2003, of
$83.1 million and $47.6 million, respectively.

In August 2001, AMB Institutional Alliance
Fund II, L.P. obtained a $150.0 million credit
facility secured by the unfunded capital commitments of the
investors in AMB Institutional Alliance REIT II, Inc.

34



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and AMB Institutional Alliance Fund II, L.P.
In April 2003, AMB Institutional Alliance Fund II, L.P.
repaid the credit facility with capital contributions and
secured debt financing proceeds and terminated the credit
facility.


Mortgages
Receivable.Through a wholly-owned
subsidiary, we hold a mortgage loan receivable on AMB Pier One,
LLC, an unconsolidated joint venture. The note bears interest at
13.0% and matures in May 2026. As of December 31, 2003, the
outstanding balance on the note was $13.0 million. We also
hold short-term mortgages on sold properties totaling
$30.1 million with a weighted average interest rate of
6.2%. The mortgages mature between February 2004 and November
2006.

The tables below summarize our debt maturities
and capitalization as of December 31, 2003 (dollars in
thousands):

|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |            |         |         |       |       |       |       |         |         |         |         |          |           |           |           | 
|-------------------------------------------------------------------- | -------------------- | -------------------------- | ----------------------- | ------- | ------- | ----------- | -------- | --------- | ------- | ---------- | ------- | ---------- | ------- | ------- | ----- | ----- | ----- | ----- | ------- | ------- | ------- | ------- | -------- | --------- | --------- | --------- | 
|                                                                    
|Debt                                                                
|                                                                    
|                                                                     |                      | Our                        |                         | Joint   |         | Unsecured   |          |          
|                                                                     |                      | Secured                    |                         | Venture |         | Senior Debt |          | Unsecured |         | Credit     |         |           
|                                                                     |                      | Debt                       |                         | Debt    |         | Securities  |          | Debt      |         | Facilities |         | Total Debt
|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |           
|2004                                                                 |                      | $                          | 57,735                  |         |         | $           | 40,135   |           |         | $          |        |            |         | $       | 600   |       |       | $     |        |         |         | $       | 98,470   |          
|2005                                                                 |                      |                            | 44,567                  |         |         |             | 62,951   |           |         |            | 250,000 |            |         |         | 647   |       |       |       | 275,739 | (2)     |         |         | 633,904  |          
|2006                                                                 |                      |                            | 82,857                  |         |         |             | 62,304   |           |         |            | 75,000  |            |         |         | 698   |       |       |       |        |         |         |         | 220,859  |          
|2007                                                                 |                      |                            | 14,661                  |         |         |             | 53,158   |           |         |            | 75,000  |            |         |         | 752   |       |       |       |        |         |         |         | 143,571  |          
|2008                                                                 |                      |                            | 32,940                  |         |         |             | 162,383  |           |         |            | 175,000 |            |         |         | 810   |       |       |       |        |         |         |         | 371,133  |          
|2009                                                                 |                      |                            | 4,246                   |         |         |             | 107,187  |           |         |            |        |            |         |         | 873   |       |       |       |        |         |         |         | 112,306  |          
|2010                                                                 |                      |                            | 51,054                  |         |         |             | 128,639  |           |         |            | 75,000  |            |         |         | 941   |       |       |       |        |         |         |         | 255,634  |          
|2011                                                                 |                      |                            | 524                     |         |         |             | 275,618  |           |         |            | 75,000  |            |         |         | 1,014 |       |       |       |        |         |         |         | 352,156  |          
|2012                                                                 |                      |                            | 2,451                   |         |         |             | 146,946  |           |         |            |        |            |         |         | 1,093 |       |       |       |        |         |         |         | 150,490  |          
|2013                                                                 |                      |                            | 442                     |         |         |             | 2,045    |           |         |            | 75,000  |            |         |         | 920   |       |       |       |        |         |         |         | 78,407   |          
|Thereafter                                                           |                      |                            | 39                      |         |         |             | 20,219   |           |         |            | 125,000 |            |         |         | 1,280 |       |       |       |        |         |         |         | 146,538  |          
|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |            |         |         |       |       |       |       |         |         |         |         |          |          
|                                                                     | Subtotal             |                            |                         | 291,516 |         |             |          | 1,061,585 |         |            |         | 925,000    |         |         |       | 9,628 |       |       |         | 275,739 |         |         |          | 2,563,468 |          
|                                                                     | Unamortized premiums |                            |                         | 7,343   |         |             |          | 3,446     |         |            |         |           |         |         |       |      |       |       |         |        |         |         |          | 10,789    |          
|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |            |         |         |       |       |       |       |         |         |         |         |          |          
|                                                                     |                      |                            | Total consolidated debt |         |         | 298,859     |          |           |         | 1,065,031  |         |            |         | 925,000 |       |       |       | 9,628 |         |         |         | 275,739 |          |           |           | 2,574,257 | 
|Our share of unconsolidated joint venture debt(1)                    |                      |                            |                        |         |         |             | 77,333   |           |         |            |        |            |         |         |      |       |       |       |        |         |         |         | 77,333   |          
|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |            |         |         |       |       |       |       |         |         |         |         |          |          
|                                                                     |                      |                            | Total debt              |         |         | 298,859     |          |           |         | 1,142,364  |         |            |         | 925,000 |       |       |       | 9,628 |         |         |         | 275,739 |          |           |           | 2,651,590 | 
|Joint venture partners share of
    consolidated joint venture debt |                      |                            |                        |         |         |             | (697,276 | )         |         |            |        |            |         |         |      |       |       |       |        |         |         |         | (697,276 | )        
|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |            |         |         |       |       |       |       |         |         |         |         |          |          
|                                                                     |                      | Our share of total debt(3) |                         | $       | 298,859 |             |          | $         | 445,088 |            |         | $          | 925,000 |         |       | $     | 9,628 |       |         | $       | 275,739 |         |          | $         | 1,954,314 |          
|                                                                     |                      |                            |                         |         |         |             |          |           |         |            |         |            |         |         |       |       |       |       |         |         |         |         |          |          
|Weighed average interest rate                                        |                      |                            | 8.1                     | %       |         |             | 6.7      | %         |         |            | 6.8     | %          |         |         | 7.5   | %     |       |       | 1.9     | %       |         |         | 6.4      | %        
|Weighed average maturity (in years)                                  |                      |                            | 3.5                     |         |         |             | 6.5      |           |         |            | 5.7     |            |         |         | 10.8  |       |       |       | 1.9     |         |         |         | 5.4      |          



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The weighted average interest and maturity for
    the unconsolidated joint venture debt were 6.1% and
    5.8 years, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(2) | Includes Euro and Yen based borrowings translated
    to U.S. dollars using the foreign exchange rates at
    December 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(3) | Our share of total debt is the pro rata portion
    of the total debt based on our percentage of equity interest in
    each of the consolidated ventures holding the debt. We believe
    that our share of total debt is a meaningful supplemental
    measure, which enables both management and investors to analyze
    our leverage and to compare our leverage to that of other
    companies. In addition, it allows for a more meaningful
    comparison of our debt to that of other companies that do not
    consolidate their joint ventures. Our share of total debt is not
    intended to reflect our actual liability should there be a
    default under any or all of such

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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | loans or a liquidation of the joint ventures. The
    above table reconciles our share of total debt to total
    consolidated debt, a GAAP financial measure. For the calculation
    of the joint venture partners share of consolidated joint
    venture debt used in the above table, please see Part 1.
    Item 2. Properties Held Through Joint Ventures,
    Limited Liability Companies and Partnerships 
    Co-investment Joint Ventures.

|                                    |       |             |            |            |  |          |       |  |  |   |           |           | 
|----------------------------------- | ----- | ----------- | ---------- | ---------- |  | -------- | ----- |  |  | - | --------- | --------- | 
|                                   
|Market Capital                     
|                                   
|                                    |       | Units       |            | Market     |  | Market  
|Security                            |       | Outstanding |            | Price(1)   |  | Value(1)
|                                    |       |             |            |            |  |         
|Common units                        |       |             | 81,563,502 |            |  | $        | 32.88 |  |  | $ | 2,681,808 |          
|Common limited partnership units(2) |       |             | 4,763,790  |            |  | $        | 32.88 |  |  |   | 156,633   |          
|                                    |       |             |            |            |  |          |       |  |  |   |           |          
|                                    | Total |             |            | 86,327,292 |  |          |       |  |  |   | $         | 2,838,441 | 
|                                    |       |             |            |            |  |          |       |  |  |   |           |          



---



|    |                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Assumes that our general partnership units are
    exchanged for AMB Property Corporations common stock on a
    one-for-one basis because there is no public market for our
    units.
|   
|(2) | Includes 145,548 class B common limited
    partnership units issued by AMB Property II, L.P. in
    November 2003.                                                                     

|                         |                        |              |      |             |   |            |        |         |  |  |                 |  | 
|------------------------ | ---------------------- | ------------ | ---- | ----------- | - | ---------- | ------ | ------- |  |  | --------------- |  | 
|                        
|Preferred Units         
|                        
|                         |                        | Distribution |      | Liquidation |   | Redemption
|Security                 |                        | Rate         |      | Preference  |   | Provisions
|                         |                        |              |      |             |   |           
|Series D preferred units |                        |              | 7.75 | %           |   | $          | 79,767 |         |  |  | May 2004        | 
|Series E preferred units |                        |              | 7.75 | %           |   |            | 11,022 |         |  |  | August 2004     | 
|Series F preferred units |                        |              | 7.95 | %           |   |            | 10,057 |         |  |  | March 2005      | 
|Series H preferred units |                        |              | 8.13 | %           |   |            | 42,000 |         |  |  | September  2005 | 
|Series I preferred units |                        |              | 8.00 | %           |   |            | 25,500 |         |  |  | March 2006      | 
|Series J preferred units |                        |              | 7.95 | %           |   |            | 40,000 |         |  |  | September  2006 | 
|Series K preferred units |                        |              | 7.95 | %           |   |            | 40,000 |         |  |  | April 2007      | 
|Series L preferred units |                        |              | 6.50 | %           |   |            | 50,000 |         |  |  | June 2008       | 
|Series M preferred units |                        |              | 6.75 | %           |   |            | 57,500 |         |  |  | November 2008   | 
|                         |                        |              |      |             |   |            |        |         |  |  |                 | 
|                         | Weighted average/total |              |      | 7.53        | % |            | $      | 355,846 |  |  |                 |  | 
|                         |                        |              |      |             |   |            |        |         |  |  |                 | 

|                                                                             |  |  |      |  
|---------------------------------------------------------------------------- |  |  | ---- | -
|                                                                             |  | 
|                                                                            
|Capitalization Ratios                                                       
|                                                                            
|Total debt-to-total market capitalization                                    |  |  | 45.3 | %
|Our share of total debt-to-total market
    capitalization(1)                |  |  | 37.9 | %
|Total debt plus preferred-to-total market
    capitalization                 |  |  | 51.4 | %
|Our share of total debt plus preferred-to-total
    market capitalization(1) |  |  | 44.8 | %
|Our share of total debt-to-total book
    capitalization(1)                  |  |  | 49.4 | %



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Our share of total debt is the pro rata portion
    of the total debt based on our percentage of equity interest in
    each of the consolidated ventures holding the debt. We believe
    that our share of total debt is a meaningful supplemental
    measure, which enables both management and investors to analyze
    our leverage and to compare our leverage to that of other
    companies. In addition, it allows for a more meaningful
    comparison of our debt to that of other companies that do not
    consolidate their joint ventures. Our share of total debt is not
    intended to reflect our actual liability should there be a
    default under any or all of such loans or a liquidation of the
    joint ventures. For a reconciliation of our share of total debt
    to total consolidated debt, a GAAP financial measure, please see
    the table of debt maturities and capitalization on the preceding
    page in Part II. Item 7. Liquidity and Capital
    Resources  Capital Resources.

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##### Table of Contents



Liquidity

As of December 31, 2003, we had
$127.7 million in cash (of which $81.1 million was
held by our consolidated co-investment joint ventures) and cash
equivalents, and $171.6 million of additional available
borrowings under our credit facility.

We announced our intention to pay a regular cash
distribution for the quarter ended December 31, 2003, of
$0.415 per common unit. The distributions were payable on
January 5, 2004, to unitholders of record on
December 22, 2003. The series L and M preferred unit
distributions were payable on January 15, 2004, to
unitholders of record on January 5, 2004. The
series E, F, J and K preferred unit distributions were
payable on January 15, 2004 in respect of the period
commencing on and including October 15, 2003 and ending on
and including January 14, 2004. The series D, H and I
preferred unit distributions were payable on December 26,
2003 in respect of the period commencing on and including
October 15, 2003 and ending on and including
January 14, 2004. The following table sets forth the
distributions paid or payable per unit for the years ended
December 31, 2003, 2002 and 2001:

|                      |  |                                          |  |      |      |      |  |      |      |  |  |   |      | 
|--------------------- |  | ---------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ---- | 
|Paying Entity         |  | Security                                 |  | 2003 |      | 2002 |  | 2001
|                      |  |                                          |  |      |      |      |  |     
|Operating Partnership |  | Common limited partnership units         |  | $    | 1.66 |      |  | $    | 1.64 |  |  | $ | 1.58 | 
|Operating Partnership |  | Series B preferred units                 |  | $    | 3.71 |      |  | $    | 4.31 |  |  | $ | 4.31 | 
|Operating Partnership |  | Series J preferred units                 |  | $    | 3.98 |      |  | $    | 3.98 |  |  | $ | 1.24 | 
|Operating Partnership |  | Series K preferred units                 |  | $    | 3.98 |      |  | $    | 2.96 |  |  |   | n/a  | 
|Operating Partnership |  | Series L preferred units                 |  | $    | 0.85 |      |  |      | n/a  |  |  |   | n/a  | 
|Operating Partnership |  | Series M preferred units                 |  | $    | 0.17 |      |  |      | n/a  |  |  |   | n/a  | 
|                     
|AMB Property II, L.P. |  | Class B common limited partnership units |  | $    | 0.22 |      |  |      | n/a  |  |  |   | n/a  | 
|AMB Property II, L.P. |  | Series C preferred units                 |  |      | n/a  |      |  |      | n/a  |  |  | $ | 3.88 | 
|AMB Property II, L.P. |  | Series D preferred units                 |  | $    | 3.88 |      |  | $    | 3.88 |  |  | $ | 3.88 | 
|AMB Property II, L.P. |  | Series E preferred units                 |  | $    | 3.88 |      |  | $    | 3.88 |  |  | $ | 3.88 | 
|AMB Property II, L.P. |  | Series F preferred units                 |  | $    | 3.98 |      |  | $    | 3.98 |  |  | $ | 3.98 | 
|AMB Property II, L.P. |  | Series G preferred units                 |  |      | n/a  |      |  | $    | 2.14 |  |  | $ | 3.98 | 
|AMB Property II, L.P. |  | Series H preferred units                 |  | $    | 4.06 |      |  | $    | 4.06 |  |  | $ | 4.06 | 
|AMB Property II, L.P. |  | Series I preferred units                 |  | $    | 4.00 |      |  | $    | 4.00 |  |  | $ | 3.04 | 

The anticipated size of our distributions, using
only cash from operations, will not allow us to retire all of
our debt as it comes due. Therefore, we intend to also repay
maturing debt with net proceeds from future debt or limited
partnership unit offerings, as well as property divestitures.
However, we may not be able to obtain future financings on
favorable terms or at all. Our inability to obtain future
financings on favorable terms or at all would adversely affect
our financial condition, results of operations, cash flow and
ability to make distributions to our unitholders and payments to
our noteholders.

Capital Commitments

Developments.In
addition to recurring capital expenditures, which consist of
building improvements and leasing costs incurred to renew or
re-tenant space, during 2003, we initiated 13 new industrial
development projects with a total estimated investment of
$226.4 million at completion, aggregating an estimated
4.9 million square feet, including 438 acres of land for
development in Miamis Airport West submarket for
$29.7 million. The master planned park, called Beacon
Lakes, is entitled for 6.8 million square feet of
properties for lease or sale. We began development of the first
two buildings at Beacon Lakes, which will aggregate
approximately 0.4 million square feet and have an estimated
investment of $19.2 million. As of December 31, 2003,
we had 16 projects in our development pipeline representing a
total estimated investment of $233.0 million upon
completion and four development projects available for sale
representing a total estimated investment of $38.8 million
upon completion. Of this total, $112.2 million had been
funded as of December 31, 2003, and an estimated
$159.6 million was required to complete current and planned
projects.

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##### Table of Contents



We expect to fund these expenditures with cash
from operations, borrowings under our credit facility, debt or
limited partnership unit issuances, net proceeds from property
divestitures, and private capital from co-investment partners,
which could have an adverse effect on our cash flow.


Acquisitions.During
2003, we invested $533.9 million in 82 operating
industrial buildings, aggregating approximately 6.5 million
rentable square feet, of which we invested $238.3 million
in 43 operating properties, aggregating approximately
3.7 million square feet, through two of our co-investment
joint ventures. We generally fund our acquisitions through
private capital contributions, borrowings under our credit
facility, cash, debt issuances and net proceeds from property
divestitures. In addition, in October 2003, we entered into an
Agreement of Sale with privately-held International Airport
Centers L.L.C. and certain of its affiliated entities, pursuant
to which, if fully consummated, we will acquire a
3.4 million square foot portfolio consisting of
37 airfreight buildings located adjacent to seven
international airports in the U.S. for approximately
$481.0 million, including $119.0 million of assumed
debt. Pursuant to the Agreement of Sale, we will acquire the
buildings in separate tranches, as construction is completed and
certain other customary closing conditions, including acquiring
the necessary consents, are met. The first closings occurred in
October and December 2003, and we currently expect the balance
of the portfolio to close by the third quarter of 2004. Some of
the properties in this portfolio have been allocated to one or
more of our co-investment joint ventures. We financed the first
tranche, and expect to finance the remainder of the purchase
price, through additional debt financings and proceeds from
property dispositions.

Lease Commitments.We have entered into operating ground
leases on certain land parcels, primarily on-tarmac facilities
and office space with remaining lease terms from one to
37 years. Future minimum rental payments required under
non-cancelable operating leases in effect as of
December 31, 2003, were as follows (dollars in thousands):

|           |       |   |         |         | 
|---------- | ----- | - | ------- | ------- | 
|2004       |       | $ | 20,149  |        
|2005       |       |   | 20,272  |        
|2006       |       |   | 20,922  |        
|2007       |       |   | 21,120  |        
|2008       |       |   | 21,340  |        
|Thereafter |       |   | 283,965 |        
|           |       |   |         |        
|           | Total |   | $       | 387,768 | 
|           |       |   |         |        

These operating lease payments are amortized
ratably over the terms of the related leases.

Co-investment Joint Ventures.We enter into co-investment joint
ventures with institutional investors. These co-investment joint
ventures provide us with an additional source of capital to fund
certain acquisitions, development projects and renovation
projects, as well as private capital income. As of
December 31, 2003, we had investments in co-investment
joint ventures with a gross book value of $1.9 billion,
which are consolidated for financial reporting purposes. As of
December 31, 2003, we may make additional capital
contributions to current and planned co-investment joint
ventures of up to $27.9 million. We expect to fund these
contributions with cash from operations, borrowings under our
credit facility, debt or limited partnership unit issuances or
net proceeds from property divestitures, which could adversely
effect our cash flow.

Captive Insurance Company.In December 2001, we formed a
wholly-owned captive insurance company, Arcata National
Insurance Ltd., which provides insurance coverage for all or a
portion of losses below the deductible under our third-party
policies. We capitalized Arcata National Insurance Ltd. in
accordance with the applicable regulatory requirements. Arcata
National Insurance Ltd. established annual premiums based on
projections derived from the past loss experience of our
properties. Annually, we engage an independent third party to
perform an actuarial estimate of future projected claims,
related deductibles and projected expenses necessary to fund
associated risk management programs. Premiums paid to Arcata
National Insurance Ltd. may be adjusted based on this estimate.
Premiums paid to Arcata National Insurance Ltd. have a
retrospective component, so that if expenses, including losses
and deductibles, are less than premiums collected, the excess
may be returned to the property owners (and, in turn, as
appropriate, to the

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customers) and conversely, subject to certain
limitations, if expenses, including losses, are greater than
premiums collected, an additional premium will be charged. As
with all recoverable expenses, differences between estimated and
actual insurance premiums will be recognized in the subsequent
year. Through this structure, we believe that we have more
comprehensive insurance coverage at an overall lower cost than
would otherwise be available in the market.


Potential Unknown Liabilities.Unknown liabilities may include the
following:



| |   |                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | liabilities for clean-up or remediation of
    undisclosed environmental conditions;                                                                                                       
|
| |  | claims of customers, vendors or other persons
    dealing with our predecessors prior to our formation
    transactions that had not been asserted prior to our formation
    transactions;
|
| |  | accrued but unpaid liabilities incurred in the
    ordinary course of business;                                                                                                            
|
| |  | tax liabilities; and                                                                                                                                                                       
|
| |  | claims for indemnification by the officers and
    directors of our general partners predecessors and others
    indemnified by these entities.                                           

Overview of Contractual
Obligations

The following table summarizes our debt, interest
and lease payments due by period as of December 31, 2003
(dollars in thousands):

|                            |       |           |         |           |  |           |         |           |  |       |         |         |  |   |           |           |  |   |           |           | 
|--------------------------- | ----- | --------- | ------- | --------- |  | --------- | ------- | --------- |  | ----- | ------- | ------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                            |       | Less than |         |           |  |           |         | More than |  |      
|Contractual Obligations     |       | 1 Year    |         | 1-3 Years |  | 3-5 Years |         | 5 Years   |  | Total
|                            |       |           |         |           |  |           |         |           |  |      
|Debt                        |       | $         | 98,470  |           |  | $         | 854,763 |           |  | $     | 514,704 |         |  | $ | 1,095,531 |           |  | $ | 2,563,468 |          
|Debt interest payments      |       |           | 157,424 |           |  |           | 271,085 |           |  |       | 205,978 |         |  |   | 72,533    |           |  |   | 707,020   |          
|Operating lease commitments |       |           | 20,149  |           |  |           | 41,194  |           |  |       | 42,460  |         |  |   | 283,965   |           |  |   | 387,768   |          
|                            |       |           |         |           |  |           |         |           |  |       |         |         |  |   |           |           |  |   |           |          
|                            | Total |           | $       | 276,043   |  |           | $       | 1,167,042 |  |       | $       | 763,142 |  |   | $         | 1,452,029 |  |   | $         | 3,658,256 | 
|                            |       |           |         |           |  |           |         |           |  |       |         |         |  |   |           |           |  |   |           |          

OFF-BALANCE SHEET ARRANGEMENTS

Standby Letters of Credit.As of December 31, 2003, we had
provided approximately $64.1 million in letters of credit,
of which $52.7 million was provided under our
$500.0 million unsecured credit facility. The letters of
credit were required to be issued under certain ground lease
provisions, bank guarantees and other commitments.

Guarantees.Other
than disclosed elsewhere in this report, as of December 31,
2003, we had outstanding guarantees in the aggregate amount of
$50.2 million in connection with certain acquisitions, which are
currently expected to close in 2004.

Performance and Surety Bonds.As of December 31, 2003, we and
AMB Property Corporation had outstanding performance and surety
bonds in an aggregate amount of $0.9 million. These bonds
were issued in connection with certain of our development
projects and were posted to guarantee certain tax obligations
and the construction of certain real property improvements and
infrastructure, such as grading, sewers and streets. Performance
and surety bonds are commonly required by public agencies from
real estate developers. Performance and surety bonds are
renewable and expire upon the payment of the taxes due or the
completion of the improvements and infrastructure.

Promoted Interests and Other Contractual
Obligations.Upon the achievement of
certain return thresholds and the occurrence of certain events,
we may be obligated to make payments to certain of joint venture
partners pursuant to the terms and provisions of their
contractual agreements with us. From time to time in the normal
course of our business, we enter into various contracts with
third parties that may obligate us to make payments or perform
other obligations upon the occurrence of certain events.

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SUPPLEMENTAL EARNINGS MEASURES

FFO.We believe that
net income, as defined by GAAP, is the most appropriate earnings
measure. However, we consider funds from operations, or FFO, as
defined by the National Association of Real Estate Investment
Trusts (NAREIT), to be a useful supplemental measure
of our operating performance. FFO is defined as net income,
calculated in accordance with GAAP, less gains (or losses) from
dispositions of real estate held for investment purposes and
real estate-related depreciation, and adjustments to derive our
pro rata share of FFO of consolidated and unconsolidated joint
ventures. Further, we do not adjust FFO to eliminate the effects
of non-recurring charges. We believe that FFO, as defined by
NAREIT, is a meaningful supplemental measure of our operating
performance because historical cost accounting for real estate
assets in accordance with GAAP implicitly assumes that the value
of real estate assets diminishes predictably over time, as
reflected through depreciation and amortization expenses.
However, since real estate values have historically risen or
fallen with market and other conditions, many industry investors
and analysts have considered presentation of operating results
for real estate companies that use historical cost accounting to
be insufficient. Thus, NAREIT created FFO as a supplemental
measure of operating performance for real estate investment
trusts that excludes historical cost depreciation and
amortization, among other items, from net income, as defined by
GAAP. We believe that the use of FFO, combined with the required
GAAP presentations, has been beneficial in improving the
understanding of operating results of real estate investment
trusts, such as AMB Property Corporation, our general partner,
among the investing public and making comparisons of operating
results among such companies more meaningful. We consider FFO to
be a useful measure for reviewing our comparative operating and
financial performance because, by excluding gains or losses
related to sales of previously depreciated operating real estate
assets and real estate depreciation and amortization, FFO can
help the investing public compare the operating performance of a
companys real estate between periods or as compared to
other companies.

While FFO is a relevant and widely used measure
of operating performance of real estate investment trusts, it
does not represent cash flow from operations or net income as
defined by GAAP and should not be considered as an alternative
to those measures in evaluating our liquidity or operating
performance. FFO also does not consider the costs associated
with capital expenditures related to our real estate assets nor
is FFO necessarily indicative of cash available to fund our
future cash requirements. Further, our computation of FFO may
not be comparable to FFO reported by other real estate
investment trusts that do not define the term in accordance with
the current NAREIT definition or that interpret the current
NAREIT definition differently than we do.

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The following table reflects the calculation of
FFO reconciled from net income for the years ended
December 31, (dollars in thousands):

|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |            |  
|--------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ---------- | ------- | ---------- | - | ---------- | ------- | ---------- | - | ---------- | ------- | ---------- | - | - | ------- | ---------- | - | - | ------- | ---------- | -
|                                                                            |                                                                               | 2003(1)    |         | 2002(2)    |   | 2001(2)    |         | 2000(2)    |   | 1999(2)   
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |           
|                                                                            |                                                                               | (Restated) |         | (Restated) |   | (Restated) |         | (Restated) |   | (Restated)
|Net income                                                                  |                                                                               | $          | 147,113 |            |   | $          | 139,054 |            |   | $          | 150,272 |            |   | $ | 135,432 |            |   | $ | 190,500 |           
|Income available to common unitholders
    attributable to limited partners |                                                                               |            | (6,797  | )          |   |            | (6,659  | )          |   |            | (7,591  | )          |   |   | (8,042  | )          |   |   | (8,789  | )         
|Gains from dispositions of real estate                                      |                                                                               |            | (50,325 | )          |   |            | (19,383 | )          |   |            | (41,859 | )          |   |   | (7,044  | )          |   |   | (51,262 | )         
|Real estate related depreciation and amortization:                          |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|                                                                            | Total depreciation and amortization                                           |            |         | 138,956    |   |            |         | 126,916    |   |            |         | 105,694    |   |   |         | 84,752     |   |   |         | 62,896     |  
|                                                                            | Discontinued operations depreciation                                         |            |         | 3,381      |   |            |         | 9,587      |   |            |         | 7,849      |   |   |         | 5,606      |   |   |         | 4,139      |  
|                                                                            | Furniture, fixtures and equipment depreciation                                |            |         | (720       | ) |            |         | (712       | ) |            |         | (731       | ) |   |         | (380       | ) |   |         | (654       | )
|                                                                            | Ground lease amortization                                                     |            |         |           |   |            |         | (2,301     | ) |            |         | (1,232     | ) |   |         | (734       | ) |   |         | (348       | )
|Adjustments to derive FFO from consolidated joint
    ventures:             |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|                                                                            | Joint venture partners minority interests
    (NI)                           |            |         | 34,146     |   |            |         | 28,706     |   |            |         | 25,709     |   |   |         | 11,750     |   |   |         | 5,261      |  
|                                                                            | Limited partnership unitholders minority
    interests (NI)                  |            |         | 3,493      |   |            |         | 4,477      |   |            |         | 5,718      |   |   |         | 7,090      |   |   |         | 8,213      |  
|                                                                            | Limited partnership unitholders minority
    interests (Development profits) |            |         | 344        |   |            |         | 57         |   |            |         | 764        |   |   |         |           |   |   |         |           |  
|                                                                            | Discontinued operations minority interests
    (NI)                          |            |         | 1,968      |   |            |         | 3,246      |   |            |         | 2,292      |   |   |         | 1,508      |   |   |         | 1,036      |  
|                                                                            | FFO attributable to minority interests                                        |            |         | (65,603    | ) |            |         | (52,051    | ) |            |         | (40,144    | ) |   |         | (15,055    | ) |   |         | (8,182     | )
|Adjustments to derive FFO from unconsolidated
    joint ventures:           |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|                                                                            | Our share of net income                                                       |            |         | (5,445     | ) |            |         | (5,674     | ) |            |         | (5,467     | ) |   |         | (5,212     | ) |   |         | (4,701     | )
|                                                                            | Our share of FFO                                                              |            |         | 9,755      |   |            |         | 9,291      |   |            |         | 8,014      |   |   |         | 7,188      |   |   |         | 6,677      |  
|Preferred unit distributions                                                |                                                                               |            | (18,187 | )          |   |            | (19,772 | )          |   |            | (14,981 | )          |   |   | (14,108 | )          |   |   | (14,108 | )         
|Preferred unit redemption discount/(issuance
    costs)                     |                                                                               |            | (5,413  | )          |   |            | 412     |            |   |            | (7,600  | )          |   |   |        |            |   |   |        |           
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|                                                                            | Funds from operations                                                         |            | $       | 186,666    |   |            | $       | 215,194    |   |            | $       | 186,707    |   |   | $       | 202,751    |   |   | $       | 190,678    |  
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|Basic FFO per common unit                                                   |                                                                               | $          | 2.17    |            |   | $          | 2.44    |            |   | $          | 2.09    |            |   | $ | 2.26    |            |   | $ | 2.10    |           
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|Diluted FFO per common unit                                                 |                                                                               | $          | 2.13    |            |   | $          | 2.40    |            |   | $          | 2.07    |            |   | $ | 2.25    |            |   | $ | 2.10    |           
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|Weighted average common units:                                              |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|                                                                            | Basic                                                                         |            |         | 85,859,899 |   |            |         | 88,204,208 |   |            |         | 89,286,379 |   |   |         | 89,566,375 |   |   |         | 90,792,310 |  
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           
|                                                                            | Diluted                                                                       |            |         | 87,616,365 |   |            |         | 89,689,310 |   |            |         | 90,325,801 |   |   |         | 90,024,511 |   |   |         | 90,867,934 |  
|                                                                            |                                                                               |            |         |            |   |            |         |            |   |            |         |            |   |   |         |            |   |   |         |           

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---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In the quarter ended June 30, 2003, and
    effective January 1, 2003, we discontinued our practice of
    deducting amortization of investments in leasehold interests
    from FFO as such an adjustment is not provided for in
    NAREITs FFO definition. Basic FFO per unit would have been
    $2.47, $2.10, $2.27 and $2.10 for the years ended
    December 31, 2002, 2001, 2000 and 1999, respectively, had
    we discontinued our practice of deducting amortization of
    investments in leasehold interests from FFO retroactively.
    Diluted FFO per unit would have been $2.42, $2.08, $2.26 and
    $2.10 for the years ended December 31, 2002, 2001, 2000 and
    1999, respectively, had we discontinued our practice of
    deducting amortization of investments in leasehold interests
    from FFO retroactively.
|   
|(2) | In the quarter ended September 30, 2003, we
    modified our FFO reporting to no longer add back impairment
    losses when computing FFO in accordance with NAREITs FFO
    definition. Additionally, we adopted Topic D-42 and began
    including preferred unit redemption discounts and issuance cost
    write-offs in FFO. As a result, FFO for the periods presented
    has been restated to reflect these changes.                                                                                                                                                                                                                                                                                                                                                                                                               

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BUSINESS RISKS

Our operations involve various risks that could
have adverse consequences to us. These risks include, among
others:

General Real Estate Risks



| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | Our performance and value are subject to
    general economic conditions and risks associated with our real
    estate assets.

The investment returns available from equity
investments in real estate depend on the amount of income earned
and capital appreciation generated by the properties, as well as
the expenses incurred in connection with the properties. If our
properties do not generate income sufficient to meet operating
expenses, including debt service and capital expenditures, then
our ability to make distributions to our unitholders and
payments to our noteholders could be adversely affected. In
addition, there are significant expenditures associated with an
investment in real estate (such as mortgage payments, real
estate taxes and maintenance costs) that generally do not
decline when circumstances reduce the income from the property.
Income from, and the value of, our properties may be adversely
affected by:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | changes in the general economic climate;                                                  
|
| |  | local conditions, such as oversupply of or a
    reduction in demand for industrial space;
|
| |  | the attractiveness of our properties to potential
    customers;                          
|
| |  | competition from other properties;                                                        
|
| |  | our ability to provide adequate maintenance and
    insurance;                            
|
| |  | increased operating costs;                                                                
|
| |  | increased cost of compliance with
    regulations; and                                    
|
| |  | the potential for liability under applicable laws
    (including changes in tax laws).    

In addition, periods of economic slowdown or
recession in the United States and in other countries, rising
interest rates or declining demand for real estate, or public
perception that any of these events may occur, would result in a
general decrease in rents or an increased occurrence of defaults
under existing leases, which would adversely affect our
financial condition and results of operations. Future terrorist
attacks may result in declining economic activity, which could
reduce the demand for and the value of our properties. To the
extent that future attacks impact our customers, their
businesses similarly could be adversely affected, including
their ability to continue to honor their existing leases.

Our properties are concentrated predominantly in
the industrial real estate sector. As a result of this
concentration, we would feel the impact of an economic downturn
in this sector more acutely than if our portfolio included other
property types.



| |                                                                      
| | ---------------------------------------------------------------------
| | We may be unable to renew leases or relet
    space as leases expire.

As of December 31, 2003, leases on a total
of 17.8% of our industrial properties (based on annualized base
rent) will expire on or prior to December 31, 2004. We
derive most of our income from rent received from our customers.
Accordingly, our financial condition, results of operations,
cash flow and our ability to make distributions to our
unitholders and payments to our noteholders could be adversely
affected if we are unable to promptly relet or renew these
expiring leases, if the rental rates upon renewal or reletting
are significantly lower than expected. If a tenant experiences a
downturn in its business or other type of financial distress,
then it may be unable to make timely rental payments or renew
its lease. Further, our ability to rent space and the rents that
we can charge are impacted, not only by customer demand, but by
the number of other properties we have to compete with to appeal
to customers.

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| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | Real estate investments are relatively
    illiquid, making it difficult for us to respond promptly to
    changing conditions.

Real estate assets are not as liquid as certain
other types of assets. Further, our general partner is a real
estate investment trust and the Internal Revenue Code regulates
the number of properties that we can dispose of in a year, their
tax bases and the cost of improvements that we make to the
properties. These limitations, which are applicable to us as a
subsidiary of AMB Property Corporation, may affect our ability
to sell properties. This lack of liquidity and the Internal
Revenue Code restrictions may limit our ability to vary our
portfolio promptly in response to changes in economic or other
conditions and, as a result, could adversely affect our
financial condition, results of operations, cash flow and our
ability to make distributions to our unitholders and payments to
our noteholders.



| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | We may be unable to consummate acquisitions
    on advantageous terms or acquisitions may not perform as we
    expect.

We acquire and intend to continue to acquire
primarily industrial properties. The acquisition of properties
entails various risks, including the risks that our investments
may not perform as we expect, that we may be unable to quickly
and efficiently integrate our new acquisitions into our existing
operations and that our cost estimates for bringing an acquired
property up to market standards may prove inaccurate. Further,
we face significant competition for attractive investment
opportunities from other well-capitalized real estate investors,
including both publicly-traded real estate investment trusts and
private institutional investment funds. This competition
increases as investments in real estate become increasingly
attractive relative to other forms of investment. As a result of
competition, we may be unable to acquire additional properties
as we desire or the purchase price may be significantly
elevated. In addition, we expect to finance future acquisitions
through a combination of borrowings under our unsecured credit
facility, proceeds from debt or limited partnership unit
offerings by us or our subsidiaries and proceeds from property
divestitures, which may not be available and which could
adversely affect our cash flow. Any of the above risks could
adversely affect our financial condition, results of operations,
cash flow and ability to make distributions to our unitholders
and payments to our noteholders.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | We may be unable to complete renovation and
    development projects on advantageous terms.

As part of our business, we develop new and
renovate existing properties. The real estate development and
renovation business involves significant risks that could
adversely affect our financial condition, results of operations,
cash flow and ability to make distributions to our unitholders
and payments to our noteholders, which include:



| |   |                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may not be able to obtain financing for
    development projects on favorable terms and complete
    construction on schedule or within budget, resulting in
    increased debt service expense and construction costs and delays
    in leasing the properties and generating cash flow;
|
| |  | we may not be able to obtain, or may experience
    delays in obtaining, all necessary zoning, land-use, building,
    occupancy and other governmental permits and authorizations;                                                                                                         
|
| |  | the properties may perform below anticipated
    levels, producing cash flow below budgeted amounts;                                                                                                                                                                                        
|
| |  | substantial renovation and new development
    activities, regardless of their ultimate success, typically
    require a significant amount of managements time and
    attention, diverting their attention from our day-to-day
    operations; and                                       
|
| |  | upon completion of construction, we may not be
    able to obtain, or obtain on advantageous terms, permanent
    financing for activities that we have financed through
    construction loans.                                                                                            

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| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | Our performance and value are impacted by
    the local economic conditions of and the risks associated with
    doing business in California.

As of December 31, 2003, our industrial
properties located in California represented 28.4% of the
aggregate square footage of our industrial operating properties
and 31.5% of our industrial annualized base rent. Our revenue
from, and the value of, our properties located in California may
be affected by local real estate conditions (such as an
oversupply of or reduced demand for industrial properties) and
the local economic climate. Business layoffs, downsizing,
industry slowdowns, changing demographics, and other factors may
adversely impact Californias economic climate. Because of
the number of properties we have located in California, a
downturn in Californias economy or real estate conditions
could adversely affect our financial condition, results of
operations, cash flow and ability to make distributions to our
unitholders and payments to our noteholders. In addition,
certain of our properties are subject to possible loss from
seismic activity.



| |                                                                
| | ---------------------------------------------------------------
| | We may experience losses that our insurance
    does not cover.

We carry commercial liability, property and
rental loss insurance covering all the properties that we own
and manage in types and amounts that we believe are adequate and
appropriate given the relative risks applicable to the property,
the cost of coverage and industry practice. Certain losses, such
as those due to terrorism, windstorms, floods or seismic
activity, may be insured subject to certain limitations,
including large deductibles or co-payments and policy limits.
Although we have obtained coverage for certain acts of
terrorism, with policy specifications and insured limits that we
consider commercially reasonable given the cost and availability
of such coverage, we cannot be certain that we will be able to
renew coverage on comparable terms or collect under such
policies. In addition, there are other types of losses, such as
those from riots, bio-terrorism, or acts of war, that are not
generally insured in our industry because it is not economically
feasible to do so. We may incur material losses in excess of
insurance proceeds and we may not be able to continue to obtain
insurance at commercially reasonable rates. If we experience a
loss that is uninsured or that exceeds our insured limits with
respect to one or more of our properties, then we could lose the
capital invested in the damaged properties, as well as the
anticipated future revenue from those properties and, if there
is recourse debt, then we would remain obligated for any
mortgage debt or other financial obligations related to the
properties. Moreover, as the general partner of the joint
ventures, we generally will be liable for all of the joint
ventures unsatisfied recourse obligations. Any such losses
could adversely affect our financial condition, results of
operations, cash flow and ability to make distributions to our
unitholders and payments to our noteholders.

A number of our properties are located in areas
that are known to be subject to earthquake activity, including
California where, as of December 31, 2003, we had 299
industrial buildings, aggregating approximately
24.7 million square feet and representing 28.4% of our
industrial operating properties based on aggregate square
footage and 31.5% based on industrial annualized base rent. We
carry replacement-cost earthquake insurance on all of our
properties located in areas historically subject to seismic
activity, subject to coverage limitations and deductibles that
we believe are commercially reasonable. We evaluate our
earthquake insurance coverage annually in light of current
industry practice through an analysis prepared by outside
consultants.



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to risks and liabilities in
    connection with properties owned through joint ventures, limited
    liability companies and partnerships.

As of December 31, 2003, we owned
approximately 48.1 million square feet of our properties
through several joint ventures, limited liability companies or
partnerships with third parties. Our organizational documents do
not limit the amount of available funds that we may invest in
partnerships, limited liability companies or joint ventures and
we intend to continue to develop and acquire properties through
joint ventures, limited liability companies and partnerships
with other persons or entities when warranted by the

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circumstances. Such partners may share certain
approval rights over major decisions. Partnership, limited
liability company or joint venture investments involve certain
risks, including:




| |   |                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | if our partners, co-members or joint venturers go
    bankrupt, then we and any other remaining general partners,
    members, or joint venturers would generally remain liable for
    the partnerships, limited liability companys, or
    joint ventures liabilities;        
|
| |  | our partners, co-members or joint venturers might
    have economic or other business interests or goals that are
    inconsistent with our business interests or goals that would
    affect our ability to operate the property;                                                 
|
| |  | our partners, co-members or joint venturers may
    have the power to act contrary to our instructions, requests,
    policies, or objectives; and                                                                                                                                 
|
| |  | the joint venture, limited liability and
    partnership agreements often restrict the transfer of a joint
    venturers, members or partners interest or
    buy-sell or may otherwise restrict our ability to
    sell the interest when we desire or on advantageous terms.

We generally seek to maintain sufficient control
of our partnerships, limited liability companies, and joint
ventures to permit us to achieve our business objectives,
however, we may not be able to do so, and the occurrence of one
or more of the events described above could adversely affect our
financial condition, results of operations, cash flow and
ability to make distributions to our unitholders and payments to
our noteholders.



| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | We may be unable to complete divestitures
    on advantageous terms or contribute properties.

We intend to continue to divest ourselves of
retail centers and industrial properties that do not meet our
strategic objectives, provided that we can negotiate acceptable
terms and conditions. Our ability to dispose of properties on
advantageous terms depends on factors beyond our control,
including competition from other sellers and the availability of
attractive financing for potential buyers of our properties. If
we are unable to dispose of properties on favorable terms or
redeploy the proceeds of property divestitures in accordance
with our investment strategy, then our financial condition,
results of operations, cash flow and ability to make
distributions to our unitholders and payments to our noteholders
could be adversely affected.

We also anticipate contributing or selling
properties to funds and joint ventures. If we do not have
sufficient properties available that meet the investment
criteria of current or future property funds, or if the funds
have reduced or no access to capital on favorable terms, then
such contributions or sales could be delayed or prevented,
adversely affecting our financial condition, results of
operations, cash flow and ability to make distributions to our
unitholders and payments to our noteholders.



| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Contingent or unknown liabilities could
    adversely affect our financial condition.

At the time of our formation we acquired assets
from our predecessor entities subject to all of their potential
existing liabilities, without recourse. In addition, we have and
may in the future acquire properties subject to liabilities and
without any recourse, or with only limited recourse, with
respect to unknown liabilities. As a result, if a liability were
asserted against us based upon ownership of any of these
entities or properties, then we might have to pay substantial
sums to settle it, which could adversely affect our cash flow.
Unknown liabilities with respect to entities or properties
acquired might include:



| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | liabilities for clean-up or remediation of
    undisclosed environmental conditions;                                                                                 
|
| |  | claims of customers, vendors or other persons
    dealing with our predecessors prior to the formation
    transactions or the former owners of the properties;      
|
| |  | accrued but unpaid liabilities incurred in the
    ordinary course of business;                                                                                      
|
| |  | tax liabilities; and                                                                                                                                                 
|
| |  | claims for indemnification by the general
    partners, officers and directors and others indemnified by our
    predecessors or the former owners of the properties.

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Risks Associated With Our International
Business



| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | Our international growth is subject to
    special risks and we may not be able to effectively manage our
    international growth.

We have acquired and developed, and expect to
continue to acquire and develop, properties in foreign
countries. Because local markets affect our operations, our
international investments are subject to economic fluctuations
in the foreign locations in which we invest. In addition, our
international operations are subject to the usual risks of doing
business abroad such as revisions in tax treaties or other laws
governing the taxation of our foreign revenues, restrictions on
the transfer of funds, and, in certain parts of the world,
property rights uncertainty and political instability. We cannot
predict the likelihood that any of these developments may occur.
Further, we have entered, and may in the future enter, into
agreements with non-U.S. entities that are governed by the
laws of, and are subject to dispute resolution in the courts of,
another country or region. We cannot accurately predict whether
such a forum would provide us with an effective and efficient
means of resolving disputes that may arise. And even if we are
able to obtain a satisfactory decision through arbitration or a
court proceeding, we could have difficulty enforcing any award
or judgment on a timely basis or at all.

Further, our business has grown rapidly and
continues to grow through international property acquisitions
and developments. If we fail to effectively manage our
international growth, then our financial condition, results of
operations, cash flow and ability to make distributions to our
unitholders and payments to our noteholders could be adversely
affected.



| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | Acquired properties may be located in new
    markets, where we may face risks associated with investing in an
    unfamiliar market.

We have acquired and may continue to acquire
properties in international markets that are new to us. When we
acquire properties located in these markets, we may face risks
associated with a lack of market knowledge or understanding of
the local economy, forging new business relationships in the
area and unfamiliarity with local government and permitting
procedures. We work to mitigate such risks through extensive
diligence and research and associations with experienced
partners, however there can be no guarantee that all such risks
will be eliminated.



| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to risks from potential
    fluctuations in exchange rates between the U.S. dollar and
    the currencies of the foreign countries in which we
    invest.

We are pursuing, and intend to continue to
pursue, growth opportunities in international markets. As we
invest in countries where the U.S. dollar is not the
national currency, we are subject to foreign currency risks from
the potential fluctuations in exchange rates between the
U.S. dollar and the currencies of those foreign countries.
A significant depreciation in the value of the currency of one
or more foreign countries where we have a significant investment
may materially affect our results of operations. We attempt to
mitigate any such effects by borrowing under our multi-currency
credit facility in the currency of the country we are investing
in and, under certain circumstances, by putting in place foreign
currency put option contracts hedging exchange rate
fluctuations. For leases denominated in foreign currencies, we
may use derivative financial instruments to manage the foreign
exchange risk. We cannot, however, assure you that our efforts
will successfully neutralize all foreign currency risks.

Debt Financing Risks



| |                                                           
| | ----------------------------------------------------------
| | We could incur more debt, increasing our
    debt service.

It is our policy to incur debt, either directly
or through our subsidiaries, only if it will not cause our share
of total debt-to-total market capitalization ratio to exceed
approximately 45%. The aggregate amount of indebtedness that we
may incur under our policy increases directly with an increase
in the market price per share of AMB Property Corporations
capital stock. Further, our general partners management
could alter or eliminate this policy without unitholder or
noteholder approval. If we change this policy, then we could

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become more highly leveraged, resulting in an
increase in debt service that could adversely affect the cash
available for distribution to our unitholders.




| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | We face risks associated with the use of
    debt to fund acquisitions and developments, including
    refinancing risk.

As of December 31, 2003, we had total debt
outstanding of $2.6 billion. AMB Property Corporation
guarantees our obligations with respect to the senior debt
securities referenced in our financial statements. We are
subject to risks normally associated with debt financing,
including the risk that our cash flow will be insufficient to
meet required payments of principal and interest. We anticipate
that we will repay only a small portion of the principal of our
debt prior to maturity. Accordingly, we will likely need to
refinance at least a portion of our outstanding debt as it
matures. There is a risk that we may not be able to refinance
existing debt or that the terms of any refinancing will not be
as favorable as the terms of our existing debt. If we are unable
to refinance or extend principal payments due at maturity or pay
them with proceeds of other capital transactions, then we expect
that our cash flow will not be sufficient in all years to make
distributions to our unitholders and payments to our noteholders
and to repay all such maturing debt. Furthermore, if prevailing
interest rates or other factors at the time of refinancing (such
as the reluctance of lenders to make commercial real estate
loans) result in higher interest rates upon refinancing, then
the interest expense relating to that refinanced indebtedness
would increase.

In addition, if we mortgage one or more of our
properties to secure payment of indebtedness and we are unable
to meet mortgage payments, then the property could be foreclosed
upon or transferred to the mortgagee with a consequent loss of
income and asset value. A foreclosure on one or more of our
properties could adversely affect our financial condition,
results of operations, cash flow and ability to make
distributions to our unitholders and payments to our noteholders.



| |                                                     
| | ----------------------------------------------------
| | We are dependent on external sources of
    capital.

In order for our general partner, AMB Property
Corporation, to qualify as a real estate investment trust, it is
required each year to distribute to its stockholders at least
90% of its real estate investment trust taxable income
(determined without regard to the dividends-paid deduction and
by excluding any net capital gain) and it is taxed on its income
to the extent it is not fully distributed. We are required to
make distributions to AMB Property Corporation that will enable
it to satisfy this distribution requirement and avoid tax
liability. Consequently, we may not be able to fund all future
capital needs, including acquisition and development activities,
from cash retained from operations and must rely on third-party
sources of capital. Our ability to access private debt and
equity capital on favorable terms or at all is dependent upon a
number of factors, including, general market conditions, the
markets perception of our growth potential, our current
and potential future earnings and cash distributions and the
market price of AMB Property Corporations capital stock.



| |                                                                                     
| | ------------------------------------------------------------------------------------
| | Covenants in our debt agreements could
    adversely affect our financial condition.

The terms of our credit agreements and other
indebtedness require that we comply with a number of customary
financial and other covenants, such as maintaining debt service
coverage and leverage ratios and maintaining insurance coverage.
These covenants may limit flexibility in our operations, and our
failure to comply with these covenants could cause a default
under the applicable debt agreement even if we have satisfied
our payment obligations. Further, as of December 31, 2003,
we had 42 non-recourse secured loans that are
cross-collateralized by 86 properties, totaling
$920.6 million (not including unamortized debt premium). If
we default on any of these loans, we may then be required to
repay such indebtedness, together with applicable prepayment
charges, to avoid foreclosure on all the cross-collateralized
properties within the applicable pool. Foreclosure on our
properties, or our inability to refinance our loans on favorable
terms, could adversely impact our financial condition, results
of operations, cash flow and ability to make distributions to
our unitholders and payments to our noteholders. In addition,
our credit facility and senior debt securities contain certain
cross-default provisions, which are triggered in the event that
our other material indebtedness is in default. These
cross-default provisions may require us to repay or restructure
the credit facility and the

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senior debt securities in addition to any
mortgage or other debt that is in default, which could adversely
affect our financial condition, results of operations, cash flow
and ability to make distributions to our unitholders and
payments to our noteholders.


Conflicts of Interest Risks



| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | Some of AMB Property Corporations
    directors and executive officers are involved in other real
    estate activities and investments.

Prior to the consummation of AMB Property
Corporations initial public offering in 1997, some of its
executive officers and directors acquired interests in real
estate-related businesses and investments, which they still own.
AMB Property Corporations executive officers
continued involvement in other real estate-related activities
could divert their attention from our day-to-day operations. AMB
Property Corporations executive officers have entered into
non-competition agreements with AMB Property Corporation
pursuant to which they have agreed not to engage in any
activities, directly or indirectly, in respect of commercial
real estate, and not to make any investment in respect of any
industrial or retail real estate, other than through ownership
of not more than 5% of the outstanding shares of a public
company engaged in such activities or through the existing
investments referred to in this report. State law may limit AMB
Property Corporations ability to enforce these agreements.



| |                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain of AMB Property Corporations
    executive officers and directors may have conflicts of interest
    with us in connection with other properties that they own or
    control.

In October 1986, our predecessor-in-interest
entered into a property and asset management agreement with
Inglewood Corporate Center Associates to manage an office
building, in which Messrs. Moghadam and Burke and Thomas W.
Tusher, also a director of AMB Property Corporation, held,
directly and indirectly, 26.7%, 26.7% and 20% interests,
respectively. During 2003, Inglewood transferred to a third
party such property and asset management services. Until such
time, Inglewood had been paying us property and asset management
fees, which totaled approximately $11,500 for the period from
January 1, 2003 through the date on which such management
was transferred during the second quarter of 2003. Also, during
2003, Mr. Tushers direct and indirect interests in
Inglewood were redeemed for an amount equal to the estimated
liquidation value of such ventures assets. As a result,
each of Messrs. Moghadam and Burke now holds, directly and
indirectly, a 33.3% interest in Inglewood.

Certain of AMB Property Corporations
executive officers and directors own interests in other
real-estate related businesses and investments, including retail
development projects, office buildings and de minimus
holdings of the equity securities of public and private real
estate companies. We believe that these properties and
activities generally do not directly compete with any of our
properties. However, it is possible that a property in which an
executive officer or director, or an affiliate of an executive
officer or director of AMB Property Corporation, has an interest
may compete with us in the future if we were to invest in a
property similar in type and in close proximity to that
property. In addition, AMB Property Corporations executive
officers and directors continued involvement in
these properties could divert managements attention from
our day-to-day operations. We will not acquire any properties
from AMB Property Corporations executive officers,
directors or their affiliates unless the transaction is approved
by a majority of the disinterested and independent (as defined
by the rules of the New York Stock Exchange) members of AMB
Property Corporations board of directors with respect to
that transaction.



| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | AMB Property Corporations duty to its
    stockholders may conflict with the interest of our limited
    partners and noteholders.

AMB Property Corporation has fiduciary
obligations to its stockholders, the discharge of which, may
conflict with the interests of our limited partners and
noteholders.

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Risks Associated with Government
Regulations



| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Compliance or failure to comply with the
    Americans with Disabilities Act and other similar regulations
    could result in substantial costs.

Under the Americans with Disabilities Act, places
of public accommodation must meet certain federal requirements
related to access and use by disabled persons. Noncompliance
could result in the imposition of fines by the federal
government or the award of damages to private litigants. If we
are required to make unanticipated expenditures to comply with
the Americans with Disabilities Act, including removing access
barriers, then our cash flow and the amounts available for
distribution to our unitholders and payments to our noteholders
may be adversely affected. Our properties are also subject to
various federal, state and local regulatory requirements, such
as state and local fire and life-safety requirements. We could
incur fines or private damage awards if we fail to comply with
these requirements. While we believe that our properties are
currently in material compliance with these regulatory
requirements, the requirements may change or new requirements
may be imposed that could require significant unanticipated
expenditures by us that will affect our cash flow and results of
operations.



| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | The costs of compliance with environmental
    laws and regulations could exceed our budgets for these
    items.

Under various federal, state and local laws,
ordinances and regulations, a current or previous owner or
operator of real estate may be liable for the costs of
investigation, removal or remediation of certain hazardous or
toxic substances or petroleum products at, on, under or in its
property. The costs of removal or remediation of such substances
could be substantial. These laws typically impose liability and
clean-up responsibility without regard to whether the owner or
operator knew of or caused the presence of the contaminants.
Even if more than one person may have been responsible for the
contamination, each person covered by the environmental laws may
be held responsible for all of the clean-up costs incurred. In
addition, third parties may sue the owner or operator of a site
for damages based on personal injury, property damage, or other
costs, including investigation and clean-up costs, resulting
from the environmental contamination.

Environmental laws also require that owners or
operators of buildings containing asbestos properly manage and
maintain the asbestos, adequately inform or train those who may
come into contact with asbestos and undertake special
precautions, including removal or other abatement, in the event
that asbestos is disturbed during building renovation or
demolition. These laws may impose fines and penalties on
building owners or operators who fail to comply with these
requirements and may allow third parties to seek recovery from
owners or operators for personal injury associated with exposure
to asbestos. Some of our properties may contain
asbestos-containing building materials.

In addition, some of our properties are leased or
have been leased, in part, to owners and operators of businesses
that use, store, or otherwise handle petroleum products or other
hazardous or toxic substances, creating a potential for the
release of such hazardous or toxic substances. Further, certain
of our properties are on, adjacent to or near other properties
that have contained or currently contain petroleum products or
other hazardous or toxic substances, or upon which others have
engaged, are engaged or may engage in activities that may
release such hazardous or toxic substances. From time to time,
we may acquire properties, or interests in properties, with
known adverse environmental conditions where we believe that the
environmental liabilities associated with these conditions are
quantifiable and that the acquisition will yield a superior
risk-adjusted return. In such an instance, we underwrite the
costs of environmental investigation, clean-up and monitoring
into the acquisition cost and obtain appropriate environmental
insurance for the property. Further, in connection with certain
divested properties, we have agreed to remain responsible for,
and to bear the cost of, remediating or monitoring certain
environmental conditions on the properties.

At the time of acquisition, we subject all of our
properties to a Phase I or similar environmental
assessments by independent environmental consultants and we may
have additional Phase II testing performed upon
consultants recommendation. These environmental
assessments have not revealed, and we are not aware of, any
environmental liability that we believe would have a material
adverse effect on our financial condition or results of
operations taken as a whole. Nonetheless, it is possible that
the assessments

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did not reveal all environmental liabilities and
that there are material environmental liabilities unknown to us,
or that known environmental conditions may give rise to
liabilities that are greater than we anticipated. Further, our
properties current environmental condition may be affected
by customers, the condition of land, operations in the vicinity
of the properties (such as releases from underground storage
tanks), or by unrelated third parties. If the costs of
compliance with existing or future environmental laws and
regulations exceed our budgets for these items, then our
financial condition, results of operations, cash flow, and
ability to make distributions to our unitholders and payments to
our noteholders could be adversely affected.


Federal Income Tax Risks



| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain property transfers may generate
    prohibited transaction income, resulting in a penalty tax on
    gain attributable to the transaction.

From time to time, we may transfer or otherwise
dispose of some of our properties. Under the Internal Revenue
Code, any gain resulting from transfers of properties that we
hold as inventory or primarily for sale to customers in the
ordinary course of business would be treated as income from a
prohibited transaction subject to a 100% penalty tax. Since we
acquire properties for investment purposes, we do not believe
that our occasional transfers or disposals of property are
treated as prohibited transactions. However, whether property is
held for investment purposes is a question of fact that depends
on all the facts and circumstances surrounding the particular
transaction. The Internal Revenue Service may contend that
certain transfers or disposals of properties by us are
prohibited transactions. While we believe that the Internal
Revenue Service would not prevail in any such dispute, if the
IRS were to argue successfully that a transfer or disposition of
property constituted a prohibited transaction, then our general
partner would be required to pay a 100% penalty tax on any gain
allocable to us from the prohibited transaction.

Risks Associated With Our Dependence on Our
General Partners Key Personnel

We depend on the efforts of our general
partners executive officers. While we believe that we
could find suitable replacements for these key personnel, the
loss of their services or the limitation of their availability
could adversely affect our financial condition, results of
operations, cash flow and ability to make distributions to our
unitholders and payments to our noteholders. AMB Property
Corporation does not have employment agreements with any of its
executive officers.

Risks Associated with Our Restatement of
Depreciation Expense



| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | There was a material weakness in our
    internal control over financial reporting, and our business
    could have been adversely impacted if we had failed to remedy
    the deficiencies in our controls.

The design and effectiveness of our disclosure
controls and procedures and internal control over financial
reporting may not prevent all errors, misstatements or
misrepresentations. As part of managements on-going review
of our accounting policies and internal control over financial
reporting, on October 12, 2004, management determined that
there was a material weakness in our internal control over
financial reporting related to ground lease depreciation. This
weakness resulted in an understatement of depreciation expense
and resulted in a restatement of depreciation expense for our
results in previously issued financial statements for the years
ended December 31, 2003, 2002 and 2001 filed on Forms 10-K
and 10-K/A for the year ended December 31, 2003, and for
the quarters ended March 31, 2004 and June 30, 2004
filed on Forms 10-Q for the quarters then ended. In connection
with correcting this error, management has taken appropriate
action to modify our system of internal control over financial
reporting to remediate the material weakness. While management
will continue to review the effectiveness of our disclosure
controls and procedures and internal control over financial
reporting, there can be no guarantee that our internal control
over financial reporting will be effective in accomplishing all
control objectives all of the time. Other deficiencies,
particularly a material weakness, in internal control over
financial reporting which may occur in the future could result
in misstatements of our results of operations, restatements of
our financial statements, a decline in our general
partners stock price, or otherwise materially adversely
affect our business, reputation, results of operation, financial
condition or liquidity.

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

Market risk is the risk of loss from adverse
changes in market prices, interest rates and foreign exchange
rates. Our future earnings and cash flows are dependent upon
prevailing market rates. Accordingly, we manage our market risk
by matching projected cash inflows from operating, investing and
financing activities with projected cash outflows for debt
service, acquisitions, capital expenditures, distributions to
unitholders and payments to noteholders, and other cash
requirements. The majority of our outstanding debt has fixed
interest rates, which minimizes the risk of fluctuating interest
rates. Our exposure to market risk includes interest rate
fluctuations in connection with our credit facility and other
variable rate borrowings and our ability to incur more debt
without unitholder or noteholder approval, thereby increasing
our debt service obligations, which could adversely affect our
cash flows. As of December 31, 2003, we had no interest
rate caps or swaps. See Item 2: Managements
Discussion and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital
Resources  Capital Resources  Market
Capitalization.

The table below summarizes the market risks
associated with our fixed and variable rate debt outstanding
before unamortized debt premiums of $10.8 million as of
December 31, 2003 (dollars in thousands):

|                      |  |      |        |      |  |      |         |      |  |      |         |            |  |       |         |   |  |   |         |   |  |   |           |   |  |   |           |  
|--------------------- |  | ---- | ------ | ---- |  | ---- | ------- | ---- |  | ---- | ------- | ---------- |  | ----- | ------- | - |  | - | ------- | - |  | - | --------- | - |  | - | --------- | -
|                      |  | 2004 |        | 2005 |  | 2006 |         | 2007 |  | 2008 |         | Thereafter |  | Total
|                      |  |      |        |      |  |      |         |      |  |      |         |            |  |      
|Fixed rate debt(1)    |  | $    | 96,425 |      |  | $    | 354,372 |      |  | $    | 168,961 |            |  | $     | 138,067 |   |  | $ | 365,496 |   |  | $ | 1,062,154 |   |  | $ | 2,185,475 |  
|Average interest rate |  |      | 7.0    | %    |  |      | 7.0     | %    |  |      | 6.9     | %          |  |       | 7.1     | % |  |   | 6.9     | % |  |   | 6.7       | % |  |   | 6.9       | %
|Variable rate debt(2) |  | $    | 2,045  |      |  | $    | 279,532 |      |  | $    | 51,898  |            |  | $     | 5,504   |   |  | $ | 5,637   |   |  | $ | 33,377    |   |  | $ | 377,993   |  
|Average interest rate |  |      | 3.6    | %    |  |      | 1.9     | %    |  |      | 1.6     | %          |  |       | 3.8     | % |  |   | 4.1     | % |  |   | 4.1       | % |  |   | 2.1       | %



---



|    |                                          
|--- | -----------------------------------------
|(1) | Represents 85.3% of all outstanding debt.
|   
|(2) | Represents 14.7% of all outstanding debt.

If market rates of interest on our variable rate
debt increased by 10% (or approximately 20 basis points),
then the increase in interest expense on the variable rate debt
would be $0.8 million annually. As of December 31,
2003, the estimated fair value of our fixed rate debt was
$2,472.2 million based on our estimate of current market
interest rates.

As of December 31, 2003 and 2002, variable
rate debt comprised 14.7% and 9.3%, respectively, of all our
outstanding debt. Variable rate debt was $378.0 million and
$206.1 million, respectively, as of December 31, 2003
and 2002. The increase is due to a higher outstanding balance on
our credit facility. This increase in our outstanding variable
rate debt increases our risk associated with unfavorable
interest rate fluctuations.

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Financial Instruments.We record all derivatives on the
balance sheet at fair value as an asset or liability, with an
offset to accumulated other comprehensive income or income. For
revenues or expenses denominated in non-functional currencies,
we may use derivative financial instruments to manage foreign
currency exchange rate risk. Our derivative financial
instruments in effect at December 31, 2003, were a forward
contract hedging against adverse foreign exchange fluctuations
in the Mexican peso against the U.S. dollar and a put
option hedging against adverse equity fluctuations affecting the
value of stock warrants obtained from customers. The following
table summarizes our financial instruments as of
December 31, 2003:

|                                       |                                  |                |   |        |  |  |   |       | 
|-------------------------------------- | -------------------------------- | -------------- | - | ------ |  |  | - | ----- | 
|                                       |                                  | Carrying       |   | Fair  
|Related Derivatives                    |                                  | Amount         |   | Value 
|                                       |                                  |                |   |       
|                                       |                                  |               
|                                       |                                  | (In thousands)
|MXN/ USD Forward Contract (USD short): |                                  |                |   |        |  |  |   |      
|                                       | Expected Maturity March 30, 2004 |                |   |        |  |  |   |       | 
|                                       | Contract Amount (MXN pesos)      |                |   | 37,201 |  |  |   |       | 
|                                       | Forward Exchange Rate            |                |   | 10.86  |  |  |   |       | 
|                                       | Contract Amount (USD Dollars)    |                | $ | 3,426  |  |  |   |       | 
|                                       | Fair Value at December 31, 2003  |                |   |        |  |  | $ | 3,273 | 
|Put Option:                            |                                  |                |   |        |  |  |   |      
|                                       | Contract Amount                  |                | $ | 188    |  |  |   |       | 
|                                       | Fair Value at December 31, 2003  |                |   |        |  |  | $ | 57    | 

Foreign Operations.Our exposure to market risk also
includes foreign currency exchange rate risk. The
U.S. dollar is the functional currency for our subsidiaries
operating in the United States and Mexico. The functional
currency for our subsidiaries operating outside North America is
generally the local currency of the country in which the entity
is located, mitigating the effect of foreign exchange gains and
losses. Our subsidiaries whose functional currency is not the
U.S. dollar translate their financial statements into
U.S. dollars. Assets and liabilities are translated at the
exchange rate in effect as of the financial statement date. We
translate income statement accounts using the average exchange
rate for the period and significant nonrecurring transactions
using the rate on the transaction date. Gains resulting from the
translation are included in accumulated other comprehensive
income as a separate component of partners capital and
totaled $0.7 million for the year ended December 31,
2003.

Our foreign subsidiaries may have transactions
denominated in currencies other than their functional currency.
In these instances, non-monetary assets and liabilities are
reflected at the historical exchange rate, monetary assets and
liabilities are remeasured at the exchange rate in effect at the
end of the period and income statement accounts are remeasured
at the average exchange rate for the period. For the year ended
December 31, 2003, losses from remeasurement included in
our results of operations were less than $0.1 million.

We also record gains or losses in the income
statement when a transaction with a third party, denominated in
a currency other than the entitys functional currency, is
settled and the functional currency cash flows realized are more
or less than expected based upon the exchange rate in effect
when the transaction was initiated.






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

See Item 15: Exhibits, Financial
Statement Schedules, and Reports of Form 8-K.






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

None.

53



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

On October 12, 2004, our general partner
announced a restatement of depreciation expense for our prior
period results relating to 39 buildings in our portfolio, 38 of
which are located on-tarmac, which is land owned by federal,
state or local airport authorities. As part of managements
on-going review of our accounting policies and internal control
over financial reporting, management determined that we should
have depreciated certain of our investments in buildings that
reside on land subject to ground leases over the remaining terms
of the ground leases, rather than over 40 years, which is
the period used to depreciate buildings that we hold in fee
simple. Management determined that the cause for this
depreciation error was that there was no mechanism in place to
segregate and apply appropriate depreciable lives to assets
subject to ground leases. Our general ledger did not have a
separate account designation for assets subject to ground leases
so these assets were not segregated into a separate expected
useful life category for depreciation purposes.

Management also determined that the internal
control deficiency that resulted in this restatement represents
a material weakness, as defined by the Public Company Accounting
Oversight Boards Auditing Standard No. 2. The Public
Company Accounting Oversight Board has defined material weakness
as a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that
a material misstatement of the annual or interim financial
statements will not be prevented or detected. Our
conclusion that the control issues surrounding ground lease
depreciation constituted a material weakness means that, absent
remediation of these issues, there would exist a reasonable
possibility of a material misstatement in our financial
statements for future periods.

Going forward, these assets will be depreciated
over the lesser of 40 years or the contractual term of the
underlying ground lease. In connection with correcting this
error, management has taken appropriate action to modify our
system of internal control over financial reporting to remediate
this internal control deficiency. Specifically, we have
implemented the following remediation measures with respect to
this material weakness:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Management modified our existing property
    acquisition accounting checklist system to identify ground
    leases to the appropriate accounting and finance personnel who
    create journal entries in the general ledger and to communicate
    certain information regarding such ground leases, including
    lease commencement and termination dates and any contractual
    extension options.
|
| |  | Management created new general ledger accounts to
    segregate ground lease assets from fee simple assets and
    reclassified all investments in buildings that reside on land
    subject to ground leases into the new general ledger accounts.                                                                                                                                                    
|
| |  | Management modified our existing property
    depreciation accounting policy to include a separate category
    for buildings residing on land subject to ground leases, which
    under the policy will be depreciated over the lesser of
    40 years or the contractual term of the underlying ground
    lease.                                                                                    
|
| |  | Management designated certain finance personnel
    to review our quarterly depreciation calculations, which will
    include a review for the correct depreciable lives of ground
    lease assets.                                                                                                                                                                                                   

To reflect additional depreciation expense in
this Form 10-K/A, management has restated our consolidated
financial statements contained in our Annual Report on
Form 10-K and Amendment No. 1 on our Annual Report on
Form 10-K/A for the year ended December 31, 2003
originally filed with the U.S. Securities and Exchange
Commission on March 11, 2004 and March 15, 2004,
respectively. Management and the audit committee of our general
partners board of directors discussed with our independent
auditors, PricewaterhouseCoopers LLP, and determined that this
was the proper approach. On October 12, 2004, management
and the audit committee of our general partners board of
directors concluded that our consolidated financial statements
contained in our Annual Report on Form 10-K and Amendment
No. 1 on our Annual Report on Form 10-K/A for the year
ended December 31, 2003 originally filed with the U.S.
Securities and Exchange Commission on March 11, 2004 and
March 15, 2004 respectively, should no longer be relied
upon because of this error in such financial statements as
addressed in Accounting Principles Board Opinion No. 20.

54



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##### Table of Contents



As required by Rule 13a-15(b) of the
Securities Exchange Act of 1934, as amended, we carried out an
evaluation, under the supervision and with the participation of
our management, including the chief executive officer, president
and chief financial officer of our general partner, of the
effectiveness of the design and operation of our disclosure
controls and procedures that were in effect as of the end of the
year covered by this report. Based on the material weakness
described above, the chief executive officer, president and
chief financial officer of our general partner each concluded
that our disclosure controls and procedures were not effective
at a reasonable assurance level as of December 31, 2003.
However, in light of the implementation of the new remediation
measures described above, the chief executive officer, president
and chief financial officer of our general partner believe, as
of the date of this report, management has taken appropriate
action to modify our internal control over financial reporting
relating to ground lease depreciation and remediate this
material weakness. The changes in our internal control over
financial reporting discussed above materially affected our
internal control over financial reporting.

Except as stated above, there have been no other
changes in our internal control over financial reporting during
our most recent fiscal quarter that have materially affected, or
are reasonably likely to materially affect, our internal control
over financial reporting.

55



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##### Table of Contents






PART III




Items 10, 11, 12, 13 and 14.

The information required by Items 10
through 14 will be contained in a definitive proxy
statement for AMB Property Corporations Annual Meeting of
Stockholders, which we anticipate will be filed no later than
120 days after the end of our fiscal year pursuant to
Regulation 14A and accordingly these items have been
omitted in accordance with General Instruction G(3) to Form 10-K.




PART IV






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

(a)(1) and (2) Financial Statements and
Schedules:

The following consolidated financial information
is included as a separate section of this report on
Form 10-K.

|                                                                                                                                           |  |      |     | 
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | --- | 
|                                                                                                                                           |  | Page
|                                                                                                                                           |  |     
|Report of Independent Registered Public
    Accounting Firm                                                                                |  |      | F-1 | 
|Consolidated Balance Sheets as of
    December 31, 2003 (Restated) and 2002 (Restated)                                                     |  |      | F-2 | 
|Consolidated Statements of Operations for the
    years ended December 31, 2003 (Restated), 2002 (Restated)
    and 2001 (Restated)        |  |      | F-3 | 
|Consolidated Statements of Partners Capital
    for the years ended December 31, 2003 (Restated), 2002
    (Restated) and 2001 (Restated) |  |      | F-4 | 
|Consolidated Statements of Cash Flows for the
    years ended December 31, 2003 (Restated), 2002 (Restated)
    and 2001 (Restated)        |  |      | F-5 | 
|Notes to Consolidated Financial Statements
    (Restated)                                                                                  |  |      | F-6 | 
|Report of Independent Registered Public
    Accounting Firm on Financial Statement Schedules                                               |  |      | S-1 | 
|Schedule III  Real Estate and
    Accumulated Depreciation (Restated)                                                                     |  |      | S-2 | 

All other schedules are omitted since the
required information is not present in amounts sufficient to
require submission of the schedule or because the information
required is included in the financial statements and notes
thereto.

(a)(3) Exhibits:

|        |   |             |  |                                                                                                                                                                                                                                                                                   
|------- | - | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 3 | .1          |  | Tenth Amended and Restated Agreement of Limited
    Partnership of AMB Property, L.P. dated as of November 26,
    2003 (incorporated by reference to Exhibit 3.2 of
    AMB Property, L.P.s Current Report on Form 8-K
    filed on November 26, 2003).                         
|        | 4 | .1          |  | $30,000,000 7.925% Fixed Rate Note No. 1 dated
    August 18, 2000, attaching the Parent Guarantee dated August 18,
    2000 (incorporated by reference to Exhibit 4.5 of AMB Property,
    L.P.s Annual Report on Form 10-K for the year ended
    December 31, 2000).          
|        | 4 | .2          |  | $25,000,000,000 7.925% Fixed Rate Note No. 2
    dated September 12, 2000, attaching the Parent Guarantee dated
    September 12, 2000 (incorporated by reference to Exhibit 4.6 of
    AMB Property, L.P.s Annual Report on Form 10-K for the
    year ended December 31, 2000).
|        | 4 | .3          |  | $50,000,000 8.00% Fixed Rate Note No. 3 dated
    October 26, 2000, attaching the Parent Guarantee dated October
    26, 2000 (incorporated by reference to Exhibit 4.7 of AMB
    Property, L.P.s Annual Report on Form 10-K for the year
    ended December 31, 2000).         
|        | 4 | .4          |  | $25,000,000 8.000% Fixed Rate Note No. 4 dated
    October 26, 2000, attaching the Parent Guarantee dated October
    26, 2000 (incorporated by reference to Exhibit 4.8 of AMB
    Property, L.P.s Annual Report on Form 10-K for the year
    ended December 31, 2000).        

56



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|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                 
|------- | - | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 4 | .5          |  | $50,000,000 7.20% Fixed Rate Note No. 5 dated
    December 19, 2000, attaching the Parent Guarantee dated December
    19, 2000 (incorporated herein by reference to Exhibit 4.1 of AMB
    Property, L.P.s Current Report on Form 8-K filed on
    January 8, 2001).                                                                          
|        | 4 | .6          |  | $50,000,000 7.20% Fixed Rate Note No. 6 dated
    December 19, 2000, attaching the Parent Guarantee dated December
    19, 2000 (incorporated herein by reference to Exhibit 4.2 of AMB
    Property, L.P.s Current Report on Form 8-K filed on
    January 8, 2001).                                                                          
|        | 4 | .7          |  | $50,000,000 7.20% Fixed Rate Note No. 7 dated
    December 19, 2000, attaching the Parent Guarantee dated December
    19, 2000 (incorporated herein by reference to Exhibit 4.3 of AMB
    Property, L.P.s Current Report on Form 8-K filed on
    January 8, 2001).                                                                          
|        | 4 | .8          |  | Indenture dated as of June 30, 1998, by and among
    AMB Property, L.P., AMB Property Corporation and State Street
    Bank and Trust Company of California, N.A., as trustee
    (incorporated by reference to Exhibit 4.1 of AMB Property,
    L.P.s Registration Statement on Form S-11 (No. 333-49163)).                                  
|        | 4 | .9          |  | First Supplemental Indenture dated as of June 30,
    1998 by and among AMB Property, L.P., AMB Property Corporation
    and State Street Bank and Trust Company of California, N.A., as
    trustee (incorporated by reference to Exhibit 4.2 of AMB
    Property, L.P.s Registration Statement on Form S-11 (No.
    333-49163)).            
|        | 4 | .10         |  | Second Supplemental Indenture dated as of June
    30, 1998, by and among AMB Property, L.P., AMB Property
    Corporation and State Street Bank and Trust Company of
    California, N.A., as trustee (incorporated by reference to
    Exhibit 4.3 of AMB Property, L.P.s Registration Statement
    on Form S-11 (No. 333-49163)).          
|        | 4 | .11         |  | Third Supplemental Indenture dated as of June 30,
    1998, by and among AMB Property, L.P., AMB Property Corporation
    and State Street Bank and Trust Company of California, N.A., as
    trustee (incorporated by reference to Exhibit 4.4 of AMB
    Property, L.P.s Registration Statement on Form S-11 (No.
    333-49163)).           
|        | 4 | .12         |  | Fourth Supplemental Indenture, by and among AMB
    Property, L.P., AMB Property Corporation and State Street Bank
    and Trust Company of California, N.A., as trustee (incorporated
    by reference to Exhibit 4.1 of AMB Property, L.P.s Current
    Report on Form 8-K/A filed on November 9, 2000).                                     
|        | 4 | .13         |  | Fifth Supplemental Indenture dated as of May 7,
    2002, by and among AMB Property, L.P., AMB Property Corporation
    and State Street Bank and Trust Company of California, N.A., as
    trustee (incorporated by reference to Exhibit 4.15 of AMB
    Property, L.P.s Annual Report on Form 10-K for the year
    ended December 31, 2002).
|        | 4 | .14         |  | Specimen of 7.10% Notes due 2008 (included in the
    First Supplemental Indenture incorporated by reference as
    Exhibit 4.2 of AMB Property, L.P.s Registration Statement
    on Form S-11 (No. 333-49163)).                                                                                                                               
|        | 4 | .15         |  | Specimen of 7.50% Notes due 2018 (included in the
    Second Supplemental Indenture incorporated by reference as
    Exhibit 4.3 of AMB Property, L.P.s Registration Statement
    on Form S-11 (No. 333-49163)).                                                                                                                              
|        | 4 | .16         |  | Specimen of 6.90% Reset Put Securities
    due 2015 (included in the Third Supplemental Indenture
    incorporated by reference as Exhibit 4.4 of AMB Property,
    L.P.s Registration Statement on Form S-11
    (No. 333-49163)).                                                                                                            
|        | 4 | .17         |  | $25,000,000 6.90% Fixed Rate Note No. 8
    dated January 9, 2001, attaching the Parent Guarantee dated
    January 9, 2001 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 31, 2001).                                                                                    
|        | 4 | .18         |  | $50,000,000 7.00% Fixed Rate Note No. 9
    dated March 7, 2001, attaching the Parent Guarantee dated
    March 7, 2001 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on March 16, 2001).                                                                                          
|        | 4 | .19         |  | $25,000,000 6.75% Fixed Rate Note No. 10
    dated September 6, 2001, attaching the Parent Guarantee
    dated September 6, 2001 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on September 18, 2001).                                                                             

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .20         |  | $20,000,000 5.90% Fixed Rate Note No. 11
    dated January 17, 2002, attaching the Parent Guarantee
    dated January 17, 2002 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 23, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 4  | .21         |  | $75,000,000 5.53% Fixed Rate Note No. B-1
    dated November 10, 2003, attaching the Parent Guarantee
    dated November 10, 2003 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Quarterly Report
    on Form 10-Q for the quarter ended September 30, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 4  | .22         |  | $50,000,000 Floating Rate Note No. B-1
    dated November 21, 2003, attaching the Parent Guarantee
    dated November 21, 2003 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on November 21, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .1          |  | Distribution Agreement dated May 7, 2002, by
    and among AMB Property Corporation, AMB Property, L.P., Morgan
    Stanley & Co. Incorporated, A.G. Edwards & Sons,
    Inc., Banc of America Securities LLC, Bear, Stearns &
    Co. Inc., Commerzbank Capital Markets Corp., First Union
    Securities, Inc., J.P. Morgan Securities Inc., Lehman Brothers
    Inc., and PNC Capital Markets, Inc. (incorporated by reference
    to Exhibit 10.1 of AMB Property, L.P.s Annual Report
    on Form 10-K for the year ended December 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10 | .2          |  | Terms Agreement dated as of December 14,
    2000, by and between Morgan Stanley & Co., Incorporated
    and J.P. Morgan Securities Inc. and AMB Property, L.P.
    (incorporated herein by reference to Exhibit 1.1 of AMB
    Property, L.P.s Current Report on Form 8-K filed on
    January 8, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10 | .3          |  | Terms Agreement dated as of January 4, 2001,
    by and between A.G. Edwards & Sons, Inc. and AMB
    Property, L.P. (incorporated herein by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .4          |  | Terms Agreement dated as of March 2, 2001,
    by and among First Union Securities, Inc., AMB Property, L.P.
    and AMB Property Corporation (incorporated by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on March 16, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .5          |  | Form of Change in Control and Noncompetition
    Agreement between AMB Property Corporation and Executive
    Officers (incorporated by reference to Exhibit 10.6 of
    AMB Property, L.P.s Annual Report on Form 10-K
    for the year ended December 31, 1998).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10 | .6          |  | Twelfth Amended and Restated Agreement of Limited
    Partnership of AMB Property II, L.P., dated as of November
    14, 2003 (incorporated by reference to Exhibit 10.1 of AMB
    Property, L.P.s Current Report on Form 8-K filed on
    November 17, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .7          |  | Amended and Restated Revolving Credit Agreement,
    dated as of December 11, 2002, by and among AMB
    Property, L.P., the banks listed therein, JPMorgan Chase
    Bank, as administrative agent, J.P. Morgan Europe Limited, as
    administrative agent for alternate currencies, Bank of America,
    N.A., as syndication agent, J.P. Morgan Securities Inc. and Banc
    of America Securities LLC, as joint lead arrangers and joint
    bookrunners, Bank One, NA, Commerzbank Aktiengesellschaft, New
    York and Grand Cayman Branches and Wachovia Bank, N.A., as
    documentation agents, PNC Bank, National Association, The
    Bank of Nova Scotia, acting through its San Francisco Agency,
    and Wells Fargo Bank, N.A., as managing agents, and KeyBank
    National Association, as co-agent (incorporated by reference to
    Exhibit 10.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on December 18, 2002).
|        | 10 | .8          |  | Amendment to Amended and Restated Credit
    Agreement dated as of July 10, 2003, by and among
    AMB Property, L.P., the banks listed therein, JP Morgan
    Chase Bank, as administrative agent, Bank of America, N.A., as
    syndication agent, and Bank One, N.A., Commerzbank, A.G., New
    York and Grand Cayman Branches, and Wachovia Bank, as
    documentation agent (incorporated by reference to
    Exhibit 10.3 of AMB Property, L.P.s Quarterly Report
    on Form 10-Q for the quarter ended June 30, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .9          |  | Guaranty of Payment, dated as of
    December 11, 2002, by AMB Property Corporation for the
    benefit of JP Morgan Chase Bank, as administrative agent, and
    J.P. Morgan Europe Limited, as administrative agent for
    alternate currencies, for the banks listed on the signature page
    to the Revolving Credit Agreement (incorporated by reference to
    Exhibit 10.2 of AMB Property, L.P.s Current Report on
    Form 8-K filed on December 18, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .10         |  | Qualified Borrower Guaranty, dated as of
    December 11, 2002, by AMB Property, L.P. for the benefit of
    JPMorgan Chase Bank and J.P. Morgan Europe Limited, as
    administrative agents for the banks listed on the signature page
    to the Revolving Credit Agreement (incorporated by reference to
    Exhibit 10.3 of AMB Property, L.P.s Current Report on
    Form 8-K filed on December 18, 2002).                                                                                      
|        | 10 | .11         |  | Terms Agreement dated as of August 30, 2001,
    by and among Lehman Brothers Inc., AMB Property, L.P., and AMB
    Property Corporation (incorporated by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on September 18, 2001).                                                                                                                                                                                                                            
|        | 10 | .12         |  | Terms Agreement dated as of January 14,
    2002, by and among Lehman Brothers Inc., AMB Property, L.P., and
    AMB Property Corporation (incorporated by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 23, 2002).                                                                                                                                                                                                                             
|        | 10 | .13         |  | Third Amended and Restated 1997 Stock Option and
    Incentive Plan of AMB Property Corporation and AMB Property,
    L.P. (incorporated by reference to Exhibit 10.22 of AMB
    Property, L.P.s Annual Report on Form 10-K for the
    year ended December 31, 2001).                                                                                                                                                                                                                               
|        | 10 | .14         |  | Amendment No. 1 to the Third Amended and
    Restated 1997 Stock Option and Incentive Plan of AMB Property
    Corporation and AMB Property, L.P. (incorporated by reference to
    Exhibit 10.23 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2001).                                                                                                                                                                                                        
|        | 10 | .15         |  | 2002 Stock Option and Incentive Plan of AMB
    Property Corporation and AMB Property, L.P. (incorporated by
    reference to Exhibit 10.21 of AMB Property, L.P.s
    Annual Report on Form 10-K for the year ended
    December 31, 2001).                                                                                                                                                                                                                                                          
|        | 10 | .16         |  | Amended and Restated AMB Nonqualified Deferred
    Compensation Plan (incorporated by reference to Exhibit 4.17 of
    AMB Property, L.P.s Registration Statement on Form S-8
    (No. 333-100214)).                                                                                                                                                                                                                                                                                                  
|        | 10 | .17         |  | Note Purchase Agreement dated as of
    November 5, 2003, by and between AMB Property, L.P. and
    Teachers Insurance and Annuity Association of America
    (incorporated by reference to Exhibit 99.1 of AMB Property,
    L.P.s Current Report on Form 8-K filed on
    November 6, 2003).                                                                                                                                                                                                        
|        | 10 | .18         |  | Agreement of Sale made as of October 6,
    2003, by and between AMB Property, L.P., International Airport
    Centers L.L.C. and certain affiliated entities (incorporated by
    reference to Exhibit 99.3 of AMB Property, L.P.s
    Current Report on Form 8-K filed on November 6, 2003).                                                                                                                                                                                                        
|        | 21 | .1          |  | Subsidiaries of AMB Property, L.P. (incorporated
    by reference to Exhibit 21.1 of AMB Property, L.P.s
    Annual Report on Form 10-K for the year ended December 31,
    2003).                                                                                                                                                                                                                                                                                                                    
|        | 23 | .1          |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 24 | .1          |  | Powers of Attorney (incorporated by reference to
    Exhibit 24.1 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2003).                                                                                                                                                                                                                                                                                                                                        
|        | 31 | .1          |  | Rule 13a-14 (a)/15d-14 (a) Certifications
    dated November 9, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 32 | .1          |  | 18 U.S.C. § 1350 Certifications dated
    November 9, 2004. The certifications in this exhibit are
    being furnished solely to accompany this report pursuant to
    18 U.S.C. § 1350, and are not being filed for
    purposes of Section 18 of the Securities Exchange Act of
    1934, as amended, and are not to be incorporated by reference
    into any of our filings, whether made before or after the date
    hereof, regardless of any general incorporation language in such
    filing.

(b) Exhibits:

See Item 15(a)(3) above.

(c) Financial Statement Schedules:

See Item 15(a)(1) and (2) above.

59



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, AMB Property,
L.P. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on November 9, 2004.



| |                                                      
| | -----------------------------------------------------
| | AMB PROPERTY, L.P.                                   
| | Registrant                                           
| | By: AMB Property Corporation, its General
    Partner



| |     |                    
| | --- | -------------------
| | By: | /s/ MICHAEL A. COKE

| |                            
| | ---------------------------
| |                            
| | Michael A. Coke            
| | Chief Financial Officer and
| | Executive Vice President   

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of AMB Property Corporation, the
general partner of AMB Property, L.P., and in the capacities and
on the dates indicated.

|                                          |  |                                                                                         |  |                  |  | 
|----------------------------------------- |  | --------------------------------------------------------------------------------------- |  | ---------------- |  | 
|                                          |  |                                                                                         |  |                 
|Name                                      |  | Title                                                                                   |  | Date            
|                                          |  |                                                                                         |  |                 
|                                         
|/s/ HAMID R. MOGHADAM*Hamid R. Moghadam   |  | Chairman of the Board and Chief Executive
    Officer
    (Principal Executive Officer) |  | November 9, 2004
|                                         
|/s/ W. BLAKE BAIRD*W. Blake Baird         |  | President and Director                                                                  |  | November 9, 2004
|                                         
|/s/ T. ROBERT BURKE*T. Robert Burke       |  | Director                                                                                |  | November 9, 2004
|                                         
|/s/ DAVID A. COLE*David A. Cole           |  | Director                                                                                |  | November 9, 2004
|                                         
|/s/ J. MICHAEL LOSH*J. Michael Losh       |  | Director                                                                                |  | November 9, 2004
|                                         
|/s/ FREDERICK W. REID*Frederick W. Reid   |  | Director                                                                                |  | November 9, 2004
|                                         
|/s/ JEFFREY L. SKELTON*Jeffrey L. Skelton |  | Director                                                                                |  | November 9, 2004
|                                         
|Thomas W. Tusher                          |  | Director                                                                                |  |                 
|                                         
|/s/ CARYL B. WELBORN*Caryl B. Welborn     |  | Director                                                                                |  | November 9, 2004

60



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##### Table of Contents



|                                   |  |                                                                                                                                       |  |                  |  | 
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- |  | 
|                                   |  |                                                                                                                                       |  |                 
|Name                               |  | Title                                                                                                                                 |  | Date            
|                                   |  |                                                                                                                                       |  |                 
|                                  
|/s/ MICHAEL A. COKEMichael A. Coke |  | Chief Financial Officer and Executive Vice
    President (Duly Authorized Officer and Principal Financial and
    Accounting Officer) |  | November 9, 2004



|     |                     | 
|---- | ------------------- | 
|*By: | /s/ MICHAEL A. COKE | 

|                 | 
|---------------- | 
|                 | 
|Michael A. Coke  | 
|Attorney-in-Fact | 

61



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Partners of

AMB Property, L.P.:


In our opinion, the accompanying consolidated
balance sheets and the related consolidated statements of
operations, of partners capital and of cash flows present
fairly, in all material respects, the financial position of AMB
Property, L.P. and its subsidiaries as of December 31, 2003
and 2002, and the results of their operations and their 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 of America. These
financial statements are the responsibility of AMB Property
Corporation, the general partner of AMB Property, L.P. Our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with the standards of the Public
Company Accounting Oversight Board (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, assessing the accounting principles
used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.

As discussed in Note 2 to the consolidated
financial statements, AMB Property, L.P. has restated its
financial statements for each of the three years in the period
ended December 31, 2003.

As discussed in Note 2 to the consolidated
financial statements, AMB Property, L.P. adopted Statement of
Financial Accounting Standards (SFAS) No. 150,
Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity, in 2003 and
the expense recognition provisions of SFAS No. 123,
Accounting for Stock-based Compensation, and SFAS
No. 144, Accounting for the Impairment or Disposal of
Long Lived Assets, in 2002. In addition, as discussed in
Note 2 to the consolidated financial statements, AMB Property,
L.P. restated its net income available to common unitholders for
the year ended December 31, 2001 for the application of
Emerging Issues Task Force Topic No. D-42, The Effect on the
Calculation of Earnings per Share for the Redemption or Induced
Conversion of Preferred Stock.

PricewaterhouseCoopers LLP

San Francisco, California

February 13, 2004, except for Note 2,


as to which the date is November 8, 2004


F-1



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##### Table of Contents



AMB PROPERTY, L.P.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2003 (Restated) and
2002 (Restated)


|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |           |           |           | 
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------- | ------------------------------ | ------------ | --------- | --------- | ------- | --------- | --------- | --------- | 
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | December 31,                            |                                | December 31,
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2003                                    |                                | 2002        
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |             
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | (Restated)                              |                                | (Restated)  
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                        
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | (Dollars in thousands, except          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | unit amounts)                          
|ASSETS                                                                                            
|Investments in real estate:                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   | Land                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                         | $                              | 1,403,807    |           |           | $       | 1,236,406 |          
|                                                                                                   | Buildings and improvements                                                                                                                                                                                                                                                                                                                                                                                                                 |                                         |                                | 3,888,272    |           |           |         | 3,553,886 |          
|                                                                                                   | Construction in progress                                                                                                                                                                                                                                                                                                                                                                                                                   |                                         |                                | 199,628      |           |           |         | 132,490   |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total investments in properties         |                                |              | 5,491,707 |           |         |           | 4,922,782 |          
|                                                                                                   | Accumulated depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                  |                                         |                                | (485,559     | )         |           |         | (368,205  | )        
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Net investments in properties           |                                |              | 5,006,148 |           |         |           | 4,554,577 |          
|Investments in unconsolidated joint ventures                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 52,009                         |              |           |           | 64,428  |          
|Properties held for divestiture, net                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 11,751                         |              |           |           | 107,871 |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | Net investments in real estate |              |           | 5,069,908 |         |           |           | 4,726,876 | 
|Cash and cash equivalents                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 127,678                        |              |           |           | 89,332  |          
|Restricted cash                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 28,985                         |              |           |           | 27,882  |          
|Mortgages receivable                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 43,145                         |              |           |           | 13,133  |          
|Accounts receivable, net of allowance for
    doubtful accounts of $6,581 and $6,720, respectively |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 88,452                         |              |           |           | 74,207  |          
|Other assets                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 51,391                         |              |           |           | 52,199  |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total assets                            |                                | $            | 5,409,559 |           |         | $         | 4,983,629 |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                  
|LIABILITIES AND PARTNERS
    CAPITAL                                                             
|Debt:                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   | Secured debt                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         | $                              | 1,363,890    |           |           | $       | 1,284,675 |          
|                                                                                                   | Unsecured senior debt securities                                                                                                                                                                                                                                                                                                                                                                                                           |                                         |                                | 925,000      |           |           |         | 800,000   |          
|                                                                                                   | Alliance Fund II credit facility                                                                                                                                                                                                                                                                                                                                                                                                           |                                         |                                |             |           |           |         | 45,500    |          
|                                                                                                   | Unsecured debt                                                                                                                                                                                                                                                                                                                                                                                                                             |                                         |                                | 9,628        |           |           |         | 10,186    |          
|                                                                                                   | Unsecured credit facility                                                                                                                                                                                                                                                                                                                                                                                                                  |                                         |                                | 275,739      |           |           |         | 95,000    |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total debt                              |                                |              | 2,574,257 |           |         |           | 2,235,361 |          
|Distributions payable                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 39,076                         |              |           |           | 41,213  |          
|Accounts payable and other liabilities                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         | 148,019                        |              |           |           | 140,503 |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total liabilities                       |                                |              | 2,761,352 |           |         |           | 2,417,077 |          
|Commitments and contingencies (Notes 15)                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|Minority interests:                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   | Joint venture partners                                                                                                                                                                                                                                                                                                                                                                                                                     |                                         |                                | 658,723      |           |           |         | 488,026   |          
|                                                                                                   | Preferred unitholders                                                                                                                                                                                                                                                                                                                                                                                                                      |                                         |                                | 164,084      |           |           |         | 167,266   |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total minority interests                |                                |              | 822,807   |           |         |           | 655,292   |          
|Partners capital:                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   | General partner, 81,563,502 and 81,800,038 units
    outstanding, respectively; 2,000,000 Series L preferred units
    issued and outstanding with a $50,000 liquidation preference and
    2,300,000 Series M preferred units issued and outstanding
    with a $57,500 liquidation preference at December 31, 2003
    and 3,995,800 Series A preferred units outstanding with a
    $99,895 liquidation preference at December 31, 2002 |                                         |                                | 1,657,137    |           |           |         | 1,676,079 |          
|                                                                                                   | Limited partners, 4,763,790 and 4,846,387 units,
    respectively; 800,000 Series J preferred units with a
    $40,000 liquidation preference, 800,000 Series K preferred
    units with a $40,000 liquidation preference at December 31,
    2003 and 1,300,000 Series B preferred units with a $65,000
    liquidation preference at December 31, 2002                                                                                   |                                         |                                | 168,263      |           |           |         | 235,181   |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total partners capital                 |                                |              | 1,825,400 |           |         |           | 1,911,260 |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total liabilities and partners capital |                                | $            | 5,409,559 |           |         | $         | 4,983,629 |          
|                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |              |           |           |         |          

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

F-2



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##### Table of Contents



AMB PROPERTY, L.P.

CONSOLIDATED STATEMENTS OF
OPERATIONS

For the Years Ended December 31, 2003
(Restated), 2002 (Restated) and 2001 (Restated)


|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |            |          |         |         | 
|----------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------------ | ---------------------------------------------------------------- | -------- | ---------- | ------- | ---------- | -------- | -------- | ------- | ---------- | -------- | ------- | ------- | 
|                                                            |                                                                                                                                           | 2003                                                     |                                            | 2002                                                             |          | 2001      
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |           
|                                                            |                                                                                                                                           | (Restated)                                               |                                            | (Restated)                                                       |          | (Restated)
|                                                            |                                                                                                                                           |                                                         
|                                                            |                                                                                                                                           | (Dollars in thousands, except unit and per              
|                                                            |                                                                                                                                           | unit amounts)                                           
|REVENUES                                                    |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Rental revenues                                                                                                                           |                                                          | $                                          | 601,700                                                          |          |            | $       | 578,489    |          |          | $       | 523,294    |         
|                                                            | Private capital income                                                                                                                    |                                                          |                                            | 13,337                                                           |          |            |         | 11,193     |          |          |         | 10,972     |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           | Total revenues                                           |                                            |                                                                  | 615,037  |            |         |            | 589,682  |          |         |            | 534,266  |        
|COSTS AND EXPENSES                                          |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Property operating expenses                                                                                                               |                                                          |                                            | (88,513                                                          | )        |            |         | (76,431    | )        |          |         | (63,710    | )       
|                                                            | Real estate taxes                                                                                                                         |                                                          |                                            | (71,394                                                          | )        |            |         | (67,698    | )        |          |         | (62,632    | )       
|                                                            | Depreciation and amortization                                                                                                             |                                                          |                                            | (138,956                                                         | )        |            |         | (126,916   | )        |          |         | (105,694   | )       
|                                                            | Impairment losses                                                                                                                         |                                                          |                                            | (5,251                                                           | )        |            |         | (2,846     | )        |          |         | (18,600    | )       
|                                                            | General and administrative                                                                                                                |                                                          |                                            | (47,729                                                          | )        |            |         | (47,207    | )        |          |         | (35,820    | )       
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           | Total costs and expenses                                 |                                            |                                                                  | (351,843 | )          |         |            | (321,098 | )        |         |            | (286,456 | )      
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|OTHER INCOME AND EXPENSES                                   |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Equity in earnings of unconsolidated joint
    ventures                                                                                   |                                                          |                                            | 5,445                                                            |          |            |         | 5,674      |          |          |         | 5,467      |         
|                                                            | Interest and other income                                                                                                                 |                                                          |                                            | 4,648                                                            |          |            |         | 10,460     |          |          |         | 16,340     |         
|                                                            | Gains from dispositions of real estate                                                                                                    |                                                          |                                            | 7,429                                                            |          |            |         | 2,480      |          |          |         | 41,859     |         
|                                                            | Merchant development profits, net                                                                                                         |                                                          |                                            | 14,441                                                           |          |            |         | 1,171      |          |          |         | 17,276     |         
|                                                            | Loss on investments in other companies                                                                                                    |                                                          |                                            |                                                                 |          |            |         |           |          |          |         | (20,758    | )       
|                                                            | Interest, including amortization                                                                                                          |                                                          |                                            | (146,773                                                         | )        |            |         | (146,200   | )        |          |         | (124,833   | )       
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Total other income and expenses            |                                                                  |          | (114,810   | )       |            |          | (126,415 | )       |            |          | (64,649 | )      
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          |                                            | Income before minority interests and discontinued
    operations |          |            | 148,384 |            |          |          | 142,169 |            |          |         | 183,161 | 
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Minority interests share of income:                                                                                                      |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |            |         
|                                                            |                                                                                                                                           | Joint venture partners share of operating
    income    |                                            |                                                                  | (34,146  | )          |         |            | (28,706  | )        |         |            | (25,709  | )      
|                                                            |                                                                                                                                           | Joint venture partners share of development
    profits |                                            |                                                                  | (8,098   | )          |         |            | (139     | )        |         |            | (4,107   | )      
|                                                            |                                                                                                                                           | Preferred unitholders                                    |                                            |                                                                  | (13,419  | )          |         |            | (13,873  | )        |         |            | (22,201  | )      
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Total minority interests share of income  |                                                                  |          | (55,663    | )       |            |          | (42,718  | )       |            |          | (52,017 | )      
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|Income from continuing operations                           |                                                                                                                                           |                                                          | 92,721                                     |                                                                  |          |            | 99,451  |            |          |          | 131,144 |           
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|Discontinued operations:                                    |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Income attributable to discontinued operations,
    net of minority interests                                                             |                                                          |                                            | 9,033                                                            |          |            |         | 21,772     |          |          |         | 19,128     |         
|                                                            | Gains from dispositions of real estate, net of
    minority interests                                                                     |                                                          |                                            | 45,359                                                           |          |            |         | 17,831     |          |          |         |           |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Total discontinued operations              |                                                                  |          | 54,392     |         |            |          | 39,603   |         |            |          | 19,128  |        
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Net income                                                                                                                                |                                                          |                                            | 147,113                                                          |          |            |         | 139,054    |          |          |         | 150,272    |         
|                                                            |                                                                                                                                           | Series A, L and M preferred unit
    distributions       |                                            |                                                                  | (6,999   | )          |         |            | (8,496   | )        |         |            | (8,500   | )      
|                                                            |                                                                                                                                           | Series B preferred unit distributions                    |                                            |                                                                  | (4,828   | )          |         |            | (5,606   | )        |         |            | (5,608   | )      
|                                                            |                                                                                                                                           | Series J preferred unit distributions                    |                                            |                                                                  | (3,180   | )          |         |            | (3,303   | )        |         |            | (873     | )      
|                                                            |                                                                                                                                           | Series K preferred unit distributions                    |                                            |                                                                  | (3,180   | )          |         |            | (2,367   | )        |         |            |         |        
|                                                            |                                                                                                                                           | Preferred unit redemption discount/(issuance
    costs)  |                                            |                                                                  | (5,413   | )          |         |            | 412      |          |         |            | (7,600   | )      
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Net income available to common unitholders |                                                                  | $        | 123,513    |         |            | $        | 119,694  |         |            | $        | 127,691 |        
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|Income available to common unitholders
    attributable to: |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | General partner                                                                                                                           |                                                          | $                                          | 116,716                                                          |          |            | $       | 113,035    |          |          | $       | 120,100    |         
|                                                            | Limited partners                                                                                                                          |                                                          |                                            | 6,797                                                            |          |            |         | 6,659      |          |          |         | 7,591      |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Net income available to common unitholders |                                                                  | $        | 123,513    |         |            | $        | 119,694  |         |            | $        | 127,691 |        
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|Basic income per common unit                                |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Income from continuing operations (includes
    preferred unit distributions and preferred unit redemption
    discount/(issuance costs)) |                                                          | $                                          | 0.81                                                             |          |            | $       | 0.91       |          |          | $       | 1.21       |         
|                                                            | Discontinued operations                                                                                                                   |                                                          |                                            | 0.63                                                             |          |            |         | 0.45       |          |          |         | 0.22       |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Net income available to common unitholders |                                                                  | $        | 1.44       |         |            | $        | 1.36     |         |            | $        | 1.43    |        
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|Diluted income per common unit                              |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Income from continuing operations (includes
    preferred unit distributions and preferred unit redemption
    discount/(issuance costs)) |                                                          | $                                          | 0.79                                                             |          |            | $       | 0.89       |          |          | $       | 1.20       |         
|                                                            | Discontinued operations                                                                                                                   |                                                          |                                            | 0.62                                                             |          |            |         | 0.44       |          |          | $       | 0.21       |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            |                                                                                                                                           |                                                          | Net income available to common unitholders |                                                                  | $        | 1.41       |         |            | $        | 1.33     |         |            | $        | 1.41    |        
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|WEIGHTED AVERAGE COMMON UNITS
    OUTSTANDING               |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Basic                                                                                                                                     |                                                          |                                            | 85,859,899                                                       |          |            |         | 88,204,208 |          |          |         | 89,286,379 |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           
|                                                            | Diluted                                                                                                                                   |                                                          |                                            | 87,616,365                                                       |          |            |         | 89,689,310 |          |          |         | 90,325,801 |         
|                                                            |                                                                                                                                           |                                                          |                                            |                                                                  |          |            |         |            |          |          |         |           

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

F-3



---



##### Table of Contents



AMB PROPERTY, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS
CAPITAL

For the Years Ended December 31, 2003
(Restated), 2002 (Restated) and 2001 (Restated)


|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |          |         | 
|---------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------------- | --------- | ---------------- | - | --------------- | ------- | ------------ | - | ----- | ---------- | ---------- | - | ----- | --------- | ---------- | - | ---------- | --------- | ---------- | - | - | ------- | ------- | - |  | --------- | -------- | - | - | ------- | ------- | - | - | --------- | -------- | ------- | 
|                                               |                                                                                                                      |                                             |           |                  |   |                
|                                               |                                                                                                                      | General Partner                             |           | Limited Partners |   |                
|                                               |                                                                                                                      |                                             |           |                  |   |                
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |      
|                                               |                                                                                                                      | Preferred Units                             |           | Common Units     |   | Preferred Units |         | Common Units |   |      
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |      
|                                               |                                                                                                                      | Units                                       |           | Amount           |   | Units           |         | Amount       |   | Units |            | Amount     |   | Units |           | Amount     |   | Total     
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |           
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         | (Restated)   |   |       |            |            |   |       |           | (Restated) |   | (Restated)
|                                               |                                                                                                                      |                                            
|                                               |                                                                                                                      | (Dollars in thousands, except unit amounts)
|Balance at December 31, 2000                   |                                                                                                                      |                                             | 4,000,000 |                  |   | $               | 96,100  |              |   |       | 83,909,340 |            |   | $     | 1,671,830 |            |   |            | 1,300,000 |            |   | $ | 62,319  |         |   |  | 5,827,917 |          |   | $ | 115,654 |         |   | $ | 1,945,903 |         
|                                               | Comprehensive income:                                                                                                |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |          |        
|                                               | Net income                                                                                                           |                                             |           |                 |   |                 |         | 8,500        |   |       |            |           |   |       |           | 120,100    |   |            |           |           |   |   |         | 6,481   |   |  |           |         |   |   |         | 7,591   |   |   |           |          |        
|                                               | Unrealized gain on securities                                                                                        |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 3,732      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         | 230     |   |   |           |          |        
|                                               | Total comprehensive income                                                                                           |                                             |           |                 |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           | 146,634  |        
|                                               | Contributions                                                                                                        |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           |           |   |            |           | 800,000    |   |   |         | 38,906  |   |  |           |         |   |   |         |        |   |   |           | 38,906   |        
|                                               | Issuance of common limited partnership units in
    connection with the issuance of restricted stock and options     |                                             |           |                 |   |                 |         |             |   |       |            | 237,920    |   |       |           | 5,853      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 5,853    |        
|                                               | Issuance of common limited partnership units in
    connection with the exercise of stock options                    |                                             |           |                 |   |                 |         |             |   |       |            | 201,960    |   |       |           | 4,274      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 4,274    |        
|                                               | Conversion of operating partnership units to
    common stock                                                        |                                             |           |                 |   |                 |         |             |   |       |            | 635,798    |   |       |           | 15,255     |   |            |           |           |   |   |         |        |   |  |           | (635,798 | ) |   |         | (12,650 | ) |   |           | 2,605    |        
|                                               | Conversion of operating partnership units to cash                                                                    |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           |           |   |            |           |           |   |   |         |        |   |  |           | (223,092 | ) |   |         | (4,343  | ) |   |           | (4,343   | )      
|                                               | Retirement of units                                                                                                  |                                             |           |                 |   |                 |         |             |   |       |            | (1,392,600 | ) |       |           | (32,892    | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | (32,892  | )      
|                                               | Deferred compensation                                                                                                |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | (5,853     | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | (5,853   | )      
|                                               | Deferred compensation amortization                                                                                   |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 2,725      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 2,725    |        
|                                               | Reallocation of interests                                                                                            |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | (256       | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         | 256     |   |   |           |         |        
|                                               | Distributions                                                                                                        |                                             |           |                 |   |                 |         | (8,500       | ) |       |            |           |   |       |           | (133,479   | ) |            |           |           |   |   |         | (6,481  | ) |  |           |         |   |   |         | (8,065  | ) |   |           | (156,525 | )      
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |         
|Balance at December 31, 2001 (Restated)        |                                                                                                                      |                                             | 4,000,000 |                  |   |                 | 96,100  |              |   |       | 83,592,418 |            |   |       | 1,651,289 |            |   |            | 2,100,000 |            |   |   | 101,225 |         |   |  | 4,969,027 |          |   |   | 98,673  |         |   |   | 1,947,287 |         
|                                               | Comprehensive income:                                                                                                |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |          |        
|                                               | Net income                                                                                                           |                                             |           |                 |   |                 |         | 8,496        |   |       |            |           |   |       |           | 112,623    |   |            |           |           |   |   |         | 11,276  |   |  |           |         |   |   |         | 6,659   |   |   |           |          |        
|                                               | Unrealized gain on securities                                                                                        |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 412        |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           |          |        
|                                               | Currency translation adjustment                                                                                      |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 31         |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           |          |        
|                                               |                                                                                                                      | Total comprehensive income                  |           |                  |  |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |          | 139,497 | 
|                                               | Contributions                                                                                                        |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           |           |   |            |           | 800,000    |   |   |         | 38,932  |   |  |           |         |   |   |         |        |   |   |           | 38,932   |        
|                                               | Issuance of common limited partnership units in
    connection with the issuance of restricted stock and options     |                                             |           |                 |   |                 |         |             |   |       |            | 170,604    |   |       |           | 7,478      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 7,478    |        
|                                               | Issuance of common limited partnership units in
    connection with the exercise of stock options                    |                                             |           |                 |   |                 |         |             |   |       |            | 565,976    |   |       |           | 14,830     |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 14,830   |        
|                                               | Conversion of operating partnership units to
    common stock                                                        |                                             |           |                 |   |                 |         |             |   |       |            | 122,640    |   |       |           | 2,309      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 2,309    |        
|                                               | Conversion of operating partnership units to cash                                                                    |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           |           |   |            |           |           |   |   |         |        |   |  |           | (122,640 | ) |   |         | (2,309  | ) |   |           | (2,309   | )      
|                                               | Retirement of units                                                                                                  |                                             |           | (4,200           | ) |                 |         | (106         | ) |       |            | (2,651,600 | ) |       |           | (69,399    | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | (69,505  | )      
|                                               | Deferred compensation                                                                                                |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | (7,478     | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | (7,478   | )      
|                                               | Deferred compensation amortization                                                                                   |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 5,265      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 5,265    |        
|                                               | Reallocation of interests                                                                                            |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | (54        | ) |            |           |           |   |   |         | 946     |   |  |           |         |   |   |         | (982    | ) |   |           | (90      | )      
|                                               | Distributions                                                                                                        |                                             |           |                 |   |                 |         | (8,496       | ) |       |            |           |   |       |           | (137,221   | ) |            |           |           |   |   |         | (11,276 | ) |  |           |         |   |   |         | (7,963  | ) |   |           | (164,956 | )      
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |         
|Balance at December 31, 2002 (Restated)        |                                                                                                                      |                                             | 3,995,800 |                  |   |                 | 95,994  |              |   |       | 81,800,038 |            |   |       | 1,580,085 |            |   |            | 2,900,000 |            |   |   | 141,103 |         |   |  | 4,846,387 |          |   |   | 94,078  |         |   |   | 1,911,260 |         
|                                               | Comprehensive income:                                                                                                |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |          |        
|                                               | Net income                                                                                                           |                                             |           |                 |   |                 |         | 6,999        |   |       |            |           |   |       |           | 116,716    |   |            |           |           |   |   |         | 11,188  |   |  |           |         |   |   |         | 6,797   |   |   |           |          |        
|                                               | Unrealized gain on securities                                                                                        |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 812        |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           |          |        
|                                               | Currency translation adjustment                                                                                      |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 662        |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           |          |        
|                                               | Total comprehensive income                                                                                           |                                             |           |                 |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           | 143,174  |        
|                                               | Contributions                                                                                                        |                                             |           | 4,300,000        |   |                 |         | 103,373      |   |       |            |           |   |       |           |           |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 103,373  |        
|                                               | Issuance of common limited partnership units
    in connection with the issuance of restricted stock and
    options |                                             |           |                 |   |                 |         |             |   |       |            | 256,611    |   |       |           | 11,473     |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 11,473   |        
|                                               | Issuance of common limited partnership units
    in connection with the exercise of stock options                    |                                             |           |                 |   |                 |         |             |   |       |            | 317,753    |   |       |           | 6,947      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 6,947    |        
|                                               | Issuance of common limited partnership units
    for the acquisition of properties                                   |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           |           |   |            |           |           |   |   |         |        |   |  |           | 145,548  |   |   |         | 4,487   |   |   |           | 4,487    |        
|                                               | Conversion of operating partnership units to
    common stock                                                        |                                             |           |                 |   |                 |         |             |   |       |            | 2,000      |   |       |           | 58         |   |            |           |           |   |   |         |        |   |  |           | (2,000   | ) |   |         | (38     | ) |   |           | 20       |        
|                                               | Conversion of operating partnership units to
    cash                                                                |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           |           |   |            |           |           |   |   |         |        |   |  |           | (226,145 | ) |   |         | (4,340  | ) |   |           | (4,340   | )      
|                                               | Retirement of units                                                                                                  |                                             |           | (3,995,800       | ) |                 |         | (95,994      | ) |       |            | (812,900   | ) |       |           | (21,239    | ) |            |           | (1,300,000 | ) |   |         | (63,288 | ) |  |           |         |   |   |         |        |   |   |           | (180,521 | )      
|                                               | Deferred compensation                                                                                                |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | (11,470    | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | (11,470  | )      
|                                               | Deferred compensation amortization                                                                                   |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | 8,076      |   |            |           |           |   |   |         |        |   |  |           |         |   |   |         |        |   |   |           | 8,076    |        
|                                               | Reallocation of interests                                                                                            |                                             |           |                 |   |                 |         |             |   |       |            |           |   |       |           | (1,102     | ) |            |           |           |   |   |         |        |   |  |           |         |   |   |         | (2,686  | ) |   |           | (3,788   | )      
|                                               | Distributions                                                                                                        |                                             |           |                 |   |                 |         | (6,999       | ) |       |            |           |   |       |           | (137,254   | ) |            |           |           |   |   |         | (11,188 | ) |  |           |         |   |   |         | (7,850  | ) |   |           | (163,291 | )      
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |         
|Balance as of December 31, 2003
    (Restated) |                                                                                                                      |                                             | 4,300,000 |                  |   | $               | 103,373 |              |   |       | 81,563,502 |            |   | $     | 1,553,764 |            |   |            | 1,600,000 |            |   | $ | 77,815  |         |   |  | 4,763,790 |          |   | $ | 90,448  |         |   | $ | 1,825,400 |         
|                                               |                                                                                                                      |                                             |           |                  |   |                 |         |              |   |       |            |            |   |       |           |            |   |            |           |            |   |   |         |         |   |  |           |          |   |   |         |         |   |   |           |         

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

F-4



---



##### Table of Contents



AMB PROPERTY, L.P.

CONSOLIDATED STATEMENTS OF CASH
FLOWS

For the Years Ended December 31, 2003
(Restated), 2002 (Restated) and 2001 (Restated)


|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |         |         |          |        | 
|------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------------ | ------- | ---------- | -------- | ------- | ------- | -------- | -------- | ------- | ------- | -------- | ------ | 
|                                                                                            |                                                                 | 2003                                                                  |                                                         | 2002                                             |         | 2001      
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |           
|                                                                                            |                                                                 | (Restated)                                                            |                                                         | (Restated)                                       |         | (Restated)
|                                                                                            |                                                                 |                                                                      
|                                                                                            |                                                                 | (Dollars in thousands)                                               
|CASH FLOWS FROM OPERATING ACTIVITIES                                                        |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|Net income                                                                                  |                                                                 | $                                                                     | 147,113                                                 |                                                  |         | $          | 139,054  |         |         | $        | 150,272  |        
|Adjustments to net income:                                                                  |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            | Straight-line rents                                             |                                                                       |                                                         | (10,662                                          | )       |            |          | (11,013 | )       |          |          | (10,093 | )      
|                                                                                            | Depreciation and amortization                                   |                                                                       |                                                         | 138,956                                          |         |            |          | 126,916 |         |          |          | 105,694 |        
|                                                                                            | Impairment losses                                               |                                                                       |                                                         | 5,251                                            |         |            |          | 2,846   |         |          |          | 18,600  |        
|                                                                                            | Stock-based compensation amortization                           |                                                                       |                                                         | 8,075                                            |         |            |          | 5,265   |         |          |          | 2,725   |        
|                                                                                            | Equity in earnings of unconsolidated joint
    ventures         |                                                                       |                                                         | (5,445                                           | )       |            |          | (5,674  | )       |          |          | (5,467  | )      
|                                                                                            | Equity in loss of AMB Investment Management                     |                                                                       |                                                         |                                                 |         |            |          |        |         |          |          | 43      |        
|                                                                                            | Gains from dispositions of real estate                          |                                                                       |                                                         | (7,429                                           | )       |            |          | (2,480  | )       |          |          | (41,859 | )      
|                                                                                            | Merchant development profits, net of minority
    interests     |                                                                       |                                                         | (14,441                                          | )       |            |          | (1,171  | )       |          |          | (17,276 | )      
|                                                                                            | Loss on investments in other companies                          |                                                                       |                                                         |                                                 |         |            |          |        |         |          |          | 20,758  |        
|                                                                                            | Debt premiums, discounts and finance cost
    amortization, net |                                                                       |                                                         | 2,049                                            |         |            |          | (58     | )       |          |          | (3,562  | )      
|                                                                                            | Total minority interests share of net income                   |                                                                       |                                                         | 55,663                                           |         |            |          | 42,718  |         |          |          | 52,017  |        
|                                                                                            | Discontinued operations:                                        |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |         |        
|                                                                                            |                                                                 | Depreciation and amortization                                         |                                                         |                                                  | 3,381   |            |          |         | 9,587   |          |          |         | 7,849   |         
|                                                                                            |                                                                 | Joint venture partners share of net income                           |                                                         |                                                  | 1,471   |            |          |         | 2,049   |          |          |         | 1,183   |         
|                                                                                            |                                                                 | Gains from dispositions of real estate, net of
    minority interests |                                                         |                                                  | (45,359 | )          |          |         | (17,831 | )        |          |         |        |         
|                                                                                            | Changes in assets and liabilities:                              |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |         |        
|                                                                                            |                                                                 | Accounts receivable and other assets                                  |                                                         |                                                  | (14,603 | )          |          |         | (8,269  | )        |          |         | 14,303  |         
|                                                                                            |                                                                 | Accounts payable and other liabilities                                |                                                         |                                                  | 7,516   |            |          |         | 6,862   |          |          |         | (6,625  | )       
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            |                                                                 |                                                                       | Net cash provided by operating activities               |                                                  |         | 271,536    |          |         |         | 288,801  |          |         |         | 288,562  |       
|CASH FLOWS FROM INVESTING ACTIVITIES                                                        |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|Change in restricted cash                                                                   |                                                                 |                                                                       | 1,103                                                   |                                                  |         |            | (19,221  | )       |         |          | 13,703   |        
|Cash paid for property acquisitions                                                         |                                                                 |                                                                       | (477,261                                                | )                                                |         |            | (355,964 | )       |         |          | (402,208 | )      
|Additions to land, buildings, development costs
    and other first generation improvements |                                                                 |                                                                       | (227,628                                                | )                                                |         |            | (152,196 | )       |         |          | (174,651 | )      
|Additions to second generation building
    improvements and lease costs                    |                                                                 |                                                                       | (56,250                                                 | )                                                |         |            | (54,931  | )       |         |          | (47,842  | )      
|Net proceeds from divestiture of real estate                                                |                                                                 |                                                                       | 423,996                                                 |                                                  |         |            | 257,383  |         |         |          | 242,505  |        
|Additions to interests in unconsolidated joint
    ventures                                 |                                                                 |                                                                       | (20,147                                                 | )                                                |         |            |         |         |         |          |         |        
|Distributions received from unconsolidated joint
    ventures                               |                                                                 |                                                                       | 38,196                                                  |                                                  |         |            | 6,458    |         |         |          | 5,341    |        
|Repayment/(issuance) of mortgage receivable                                                 |                                                                 |                                                                       | (30,012                                                 | )                                                |         |            | 74,081   |         |         |          |         |        
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            |                                                                 |                                                                       | Net cash used in investing activities                   |                                                  |         | (348,003   | )        |         |         | (244,390 | )        |         |         | (363,152 | )     
|CASH FLOWS FROM FINANCING ACTIVITIES                                                        |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|Issuance of common units                                                                    |                                                                 |                                                                       | 6,947                                                   |                                                  |         |            | 14,830   |         |         |          | 4,274    |        
|Repurchase and retirement of common and preferred
    units                                 |                                                                 |                                                                       | (121,239                                                | )                                                |         |            | (69,505  | )       |         |          | (32,892  | )      
|Borrowings on secured debt                                                                  |                                                                 |                                                                       | 192,750                                                 |                                                  |         |            | 167,960  |         |         |          | 362,052  |        
|Payments on secured debt                                                                    |                                                                 |                                                                       | (157,310                                                | )                                                |         |            | (146,118 | )       |         |          | (88,866  | )      
|Borrowings on unsecured credit facility                                                     |                                                                 |                                                                       | 603,550                                                 |                                                  |         |            | 230,000  |         |         |          | 210,000  |        
|Payments on unsecured credit facility                                                       |                                                                 |                                                                       | (431,000                                                | )                                                |         |            | (147,000 | )       |         |          | (414,000 | )      
|Borrowings on Alliance Fund II credit facility                                              |                                                                 |                                                                       | 8,000                                                   |                                                  |         |            | 67,250   |         |         |          | 125,000  |        
|Payments on Alliance Fund II credit facility                                                |                                                                 |                                                                       | (53,500                                                 | )                                                |         |            | (145,250 | )       |         |          | (1,500   | )      
|Payment of financing fees                                                                   |                                                                 |                                                                       | (3,187                                                  | )                                                |         |            | (6,837   | )       |         |          | (7,296   | )      
|Net proceeds from issuances of senior debt
    securities                                   |                                                                 |                                                                       | 124,566                                                 |                                                  |         |            | 19,883   |         |         |          | 99,406   |        
|Net proceeds from issuances of preferred units                                              |                                                                 |                                                                       | 103,373                                                 |                                                  |         |            | 38,932   |         |         |          | 63,727   |        
|Repurchase of preferred units                                                               |                                                                 |                                                                       | (71,883                                                 | )                                                |         |            | (7,927   | )       |         |          | (114,400 | )      
|Contributions from co-investment partners                                                   |                                                                 |                                                                       | 171,042                                                 |                                                  |         |            | 146,572  |         |         |          | 134,770  |        
|Distributions paid to partners                                                              |                                                                 |                                                                       | (163,427                                                | )                                                |         |            | (123,361 | )       |         |          | (148,460 | )      
|Distributions to minority interests, including
    preferred units                          |                                                                 |                                                                       | (96,660                                                 | )                                                |         |            | (67,579  | )       |         |          | (64,512  | )      
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            |                                                                 |                                                                       | Net cash provided by/(used in) financing
    activities |                                                  |         | 112,022    |          |         |         | (28,150  | )        |         |         | 127,303  |       
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            |                                                                 |                                                                       |                                                         | Effect of exchange rate changes on cash          |         |            | 2,791    |         |         |          |         |         |         |          |       | 
|                                                                                            |                                                                 |                                                                       |                                                         | Net increase in cash and cash equivalents        |         |            | 35,555   |         |         |          | 16,261   |         |         |          | 52,713 | 
|                                                                                            |                                                                 |                                                                       |                                                         | Cash and cash equivalents at beginning of period |         |            | 89,332   |         |         |          | 73,071   |         |         |          | 20,358 | 
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            |                                                                 |                                                                       |                                                         | Cash and cash equivalents at end of period       |         | $          | 127,678  |         |         | $        | 89,332   |         |         | $        | 73,071 | 
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|Supplemental Disclosures of Cash Flow
    Information                                       |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|Cash paid for interest, net of capitalized
    interest                                     |                                                                 | $                                                                     | 153,300                                                 |                                                  |         | $          | 165,154  |         |         | $        | 147,637  |        
|Non-cash transactions:                                                                      |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            | Acquisition of properties                                       |                                                                       | $                                                       | 533,864                                          |         |            | $        | 403,318 |         |          | $        | 428,254 |        
|                                                                                            | Assumption of debt                                              |                                                                       |                                                         | (42,246                                          | )       |            |          | (39,687 | )       |          |          | (9,724  | )      
|                                                                                            | Acquisition capital                                             |                                                                       |                                                         | (9,870                                           | )       |            |          | (7,667  | )       |          |          | (16,322 | )      
|                                                                                            | Minority interests contributions, including
    units issued   |                                                                       |                                                         | (4,487                                           | )       |            |          |        |         |          |          |        |        
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        
|                                                                                            |                                                                 | Net cash paid                                                         |                                                         | $                                                | 477,261 |            |          | $       | 355,964 |          |          | $       | 402,208 |         
|                                                                                            |                                                                 |                                                                       |                                                         |                                                  |         |            |          |         |         |          |          |        

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

F-5



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##### Table of Contents



AMB PROPERTY, L.P.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

December 31, 2003 and 2002




|   |                                                            
|-- | -----------------------------------------------------------
|1. | Organization and Formation of the Operating
    Partnership

AMB Property Corporation, a Maryland corporation
(the Company), commenced operations as a fully
integrated real estate company effective with the completion of
its initial public offering on November 26, 1997. The
Company elected to be taxed as a real estate investment trust
(REIT) under Sections 856 through 860 of the
Internal Revenue Code of 1986 (the Code), commencing
with its taxable year ended December 31, 1997, and believes
its current organization and method of operation will enable it
to maintain its status as a real estate investment trust. The
Company, through its controlling interest in its subsidiary, AMB
Property, L.P., a Delaware limited partnership (the
Operating Partnership), is engaged in the
acquisition, ownership, operation, management, renovation,
expansion and development of primarily industrial properties in
key distribution markets throughout North America, Europe and
Asia. Unless the context otherwise requires, the
Company means AMB Property Corporation, the
Operating Partnership and their other controlled subsidiaries
and the Operating Partnership means AMB Property,
L.P. and its subsidiaries.

As of December 31, 2003, the Company owned
an approximate 94.5% general partnership interest in the
Operating Partnership, excluding preferred units. The remaining
5.5% limited partnership interests are owned by non-affiliated
investors and certain current and former directors and officers
of the Company. For local law purposes, certain properties are
owned through limited partnerships, limited liability companies
and other entities. The ownership of such properties through
such entities does not materially affect the Operating
Partnerships overall ownership interests in the
properties. As the sole general partner of the Operating
Partnership, the Company has full, exclusive and complete
responsibility and discretion in the day-to-day management and
control of the Operating Partnership. Net operating results of
the Operating Partnership are allocated after preferred unit
distributions based on the respective partners ownership
interests.

The Operating Partnership enters into
co-investment joint ventures with institutional investors. These
co-investment joint ventures provide the Operating Partnership
with an additional source of capital and income. As of
December 31, 2003, the Operating Partnership had
investments in six co-investment joint ventures, which are
consolidated for financial reporting purposes.

AMB Capital Partners, LLC, a Delaware limited
liability company (AMB Capital Partners), provides
real estate investment services to clients and co-investment
joint venture clients on a fee basis. Headlands Realty
Corporation, a Maryland corporation, conducts a variety of
businesses that include incremental income programs and
development projects available for sale to third parties. IMD
Holding Corporation, a Delaware corporation, also conducts a
variety of businesses that include development projects
available for sale to third parties. AMB Capital Partners,
Headlands Realty Corporation and IMD Holding Corporation are
wholly-owned subsidiaries of the Operating Partnership.

Any references to the number of buildings, square
footage, customers and occupancy data in the financial statement
footnotes are unaudited.

As of December 31, 2003, the Operating
Partnership owned 948 operating industrial buildings and six
retail and other properties, aggregating approximately
87.6 million rentable square feet, located in 34 markets
throughout North America and in France, Germany and Japan. The
Operating Partnerships strategy is to become a leading
provider of distribution properties in supply-constrained
submarkets located near key international passenger and cargo
airports, highway systems and seaports in major metropolitan
areas of North America, Europe and Asia. These markets are
generally tied to global trade. As of December 31, 2003,
the industrial buildings, principally warehouse distribution
buildings, encompassed approximately 87.1 million rentable
square feet and were 93.1% leased. As of December 31, 2003,
the retail centers, principally grocer-anchored community
shopping centers, encompassed approximately 0.5 million
rentable square feet and were 75.2% leased.

F-6



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

As of December 31, 2003, through AMB Capital
Partners, the Operating Partnership also managed, but did not
have an ownership interest in, industrial, retail and other
properties, totaling approximately 0.5 million rentable
square feet. In addition, the Operating Partnership had
investments in industrial operating properties, totaling
approximately 7.9 million rentable square feet, through
unconsolidated joint ventures. As of December 31, 2003, the
Operating Partnership also had investments in industrial
development projects, some of which were held for sale, totaling
approximately 5.5 million square feet.



|   |                                               
|-- | ----------------------------------------------
|2. | Summary of Significant Accounting
    Policies

Restatement.On
October 12, 2004, the Company announced a restatement of
depreciation expense for its prior period results relating to 39
buildings in its portfolio, 38 of which are located on-tarmac,
which is land owned by federal, state or local airport
authorities. As part of managements on-going review of its
accounting policies and internal control over financial
reporting, management determined that it should have depreciated
certain of its investments in buildings that reside on land
subject to ground leases over the remaining terms of the ground
leases, rather than over 40 years, which is the period used
to depreciate buildings that the Company holds in fee simple.
The Company did not segregate these assets into a separate
expected useful life category for depreciation purposes. In
connection with correcting this error, the Company has taken
appropriate action to modify its system of internal control over
financial reporting to remediate this internal control
deficiency. Going forward, these assets will be depreciated over
the lesser of 40 years or the contractual term of the
underlying ground lease. To reflect additional depreciation
expense, management has restated the Companys consolidated
financial statements contained in its previously issued
consolidated financial statements for the years ended
December 31, 2003, 2002 and 2001 filed on Forms 10-K
and 10-K/A for the year ended December 31, 2003.

The effect of the restatement of depreciation
expense is reflected in the restated consolidated financial
statements contained in this Form 10-K/A, which includes a
reduction in diluted earnings per unit by $0.02 from $1.43 to
$1.41 for 2001, by $0.04 from $1.37 to $1.33 for 2002 and by
$0.06 from $1.47 to $1.41 for 2003; a reduction in net income
available to common unitholders from $129.6 million to
$127.7 million for 2001, from $123.0 million to
$119.7 million for 2002 and from $128.7 million to
$123.5 million for 2003; and an increase in depreciation
and amortization expense from $103.6 million to
$105.7 million for 2001, from $123.4 million to
$126.9 million for 2002 and from $133.5 million to
$139.0 million for 2003.

Restatements on Consolidated Balance
Sheets

|                                          |                        |                        |           |                   |  |               |           |             |  |   |           |         |  |   |           |         | 
|----------------------------------------- | ---------------------- | ---------------------- | --------- | ----------------- |  | ------------- | --------- | ----------- |  | - | --------- | ------- |  | - | --------- | ------- | 
|                                          |                        |                        |           |                  
|                                          |                        | December 31, 2003      |           | December 31, 2002
|                                          |                        |                        |           |                  
|                                          |                        | As previously          |           |                   |  | As previously |           |            
|                                          |                        | reported               |           | As restated       |  | reported      |           | As restated
|                                          |                        |                        |           |                   |  |               |           |            
|                                          |                        |                       
|                                          |                        | (Amounts in thousands)
|Accumulated depreciation and amortization |                        | $                      | (474,452  | )                 |  | $             | (485,559  | )           |  | $ | (362,540  | )       |  | $ | (368,205  | )      
|Net investments in properties             |                        | $                      | 5,017,255 |                   |  | $             | 5,006,148 |             |  | $ | 4,560,242 |         |  | $ | 4,554,577 |        
|Minority interests:                       |                        |                        |           |                   |  |               |           |             |  |   |           |         |  |   |           |        
|                                          | Joint venture partners |                        | $         | 659,487           |  |               | $         | 658,723     |  |   | $         | 488,524 |  |   | $         | 488,026 | 
|Total partners capital                   |                        | $                      | 1,835,743 |                   |  | $             | 1,825,400 |             |  | $ | 1,916,427 |         |  | $ | 1,911,260 |        

F-7



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Restatements on Consolidated Statements of
Operations

|                                           |                                                                               |                                                  |          |                    |   |                    |          |             |   |               |          |             |   |   |          |         |   |   |          |         |   |   |          |         |  
|------------------------------------------ | ----------------------------------------------------------------------------- | ------------------------------------------------ | -------- | ------------------ | - | ------------------ | -------- | ----------- | - | ------------- | -------- | ----------- | - | - | -------- | ------- | - | - | -------- | ------- | - | - | -------- | ------- | -
|                                           |                                                                               |                                                  |          |                    |   |                   
|                                           |                                                                               | For the Year Ended                               |          | For the Year Ended |   | For the Year Ended
|                                           |                                                                               | December 31, 2003                                |          | December 31, 2002  |   | December 31, 2001 
|                                           |                                                                               |                                                  |          |                    |   |                   
|                                           |                                                                               | As Previously                                    |          |                    |   | As Previously      |          |             |   | As Previously |          |            
|                                           |                                                                               | Reported                                         |          | As Restated        |   | Reported           |          | As Restated |   | Reported      |          | As Restated
|                                           |                                                                               |                                                  |          |                    |   |                    |          |             |   |               |          |            
|                                           |                                                                               |                                                 
|                                           |                                                                               | (Amounts in thousands, except per share amounts)
|Depreciation and amortization              |                                                                               | $                                                | (133,514 | )                  |   | $                  | (138,956 | )           |   | $             | (123,380 | )           |   | $ | (126,916 | )       |   | $ | (103,565 | )       |   | $ | (105,694 | )      
|Minority interests share of income:       |                                                                               |                                                  |          |                    |   |                    |          |             |   |               |          |             |   |   |          |         |   |   |          |         |   |   |          |        
|                                           | Joint venture partners share of operating
    income                         |                                                  | $        | (34,412            | ) |                    | $        | (34,146     | ) |               | $        | (28,940     | ) |   | $        | (28,706 | ) |   | $        | (25,973 | ) |   | $        | (25,709 | )
|Net income                                 |                                                                               | $                                                | 152,289  |                    |   | $                  | 147,113  |             |   | $             | 142,356  |             |   | $ | 139,054  |         |   | $ | 152,137  |         |   | $ | 150,272  |        
|Net income available to common unitholders |                                                                               | $                                                | 128,689  |                    |   | $                  | 123,513  |             |   | $             | 122,996  |             |   | $ | 119,694  |         |   | $ | 129,556  |         |   | $ | 127,691  |        
|Basic income per common unit:              |                                                                               |                                                  |          |                    |   |                    |          |             |   |               |          |             |   |   |          |         |   |   |          |         |   |   |          |        
|                                           | Income from continuing operations (includes
    preferred unit distributions) |                                                  | $        | 0.87               |   |                    | $        | 0.81        |   |               | $        | 0.94        |   |   | $        | 0.91    |   |   | $        | 1.23    |   |   | $        | 1.21    |  
|                                           | Net income available to common unitholders                                    |                                                  | $        | 1.50               |   |                    | $        | 1.44        |   |               | $        | 1.39        |   |   | $        | 1.36    |   |   | $        | 1.45    |   |   | $        | 1.43    |  
|Diluted income per common unit:            |                                                                               |                                                  |          |                    |   |                    |          |             |   |               |          |             |   |   |          |         |   |   |          |         |   |   |          |        
|                                           | Income from continuing operations (includes
    preferred unit distributions) |                                                  | $        | 0.85               |   |                    | $        | 0.79        |   |               | $        | 0.93        |   |   | $        | 0.89    |   |   | $        | 1.22    |   |   | $        | 1.20    |  
|                                           | Net income available to common unitholders                                    |                                                  | $        | 1.47               |   |                    | $        | 1.41        |   |               | $        | 1.37        |   |   | $        | 1.33    |   |   | $        | 1.43    |   |   | $        | 1.41    |  

Basis of
Presentation.These consolidated
financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America (GAAP). The accompanying consolidated
financial statements include the financial position, results of
operations and cash flows of the Operating Partnership, its
wholly-owned qualified REIT and taxable REIT subsidiaries, the
Operating Partnership and joint ventures, in which the Operating
Partnership has a controlling interest. Third-party equity
interests in the Operating Partnership and joint ventures are
reflected as minority interests in the consolidated financial
statements. The Operating Partnership also has non-controlling
partnership interests in unconsolidated real estate joint
ventures, which are accounted for under the equity method. All
significant intercompany amounts have been eliminated.

Use of Estimates.The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.

Reclassifications.Certain items in the consolidated financial statements for prior
periods have been reclassified to conform to current
classifications.

F-8



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Foreign Operations.The U.S. dollar is the functional currency for the
Operating Partnerships subsidiaries operating in the
United States and Mexico. The functional currency for the
Operating Partnerships subsidiaries operating outside
North America is generally the local currency of the country in
which the entity is located. The Operating Partnerships
subsidiaries whose functional currency is not the
U.S. dollar translate their financial statements into
U.S. dollars. Assets and liabilities are translated at the
exchange rate in effect as of the financial statement date. The
Operating Partnership translates income statement accounts using
the average exchange rate for the period and significant
nonrecurring transactions using the rate on the transaction
date. Gains and losses resulting from the translation are
included in accumulated other comprehensive income as a separate
component of partners capital.

The Operating Partnerships foreign
subsidiaries may have transactions denominated in currencies
other than their functional currency. In these instances,
non-monetary assets and liabilities are reflected at the
historical exchange rate, monetary assets and liabilities are
remeasured at the exchange rate in effect at the end of the
period and income statement accounts are remeasured at the
average exchange rate for the period. Gains and losses from
remeasurement are generally included in the Operating
Partnerships results of operations.

The Operating Partnership also records gains or
losses in the income statement when a transaction with a third
party, denominated in a currency other than the entitys
functional currency, is settled and the functional currency cash
flows realized are more or less than expected based upon the
exchange rate in effect when the transaction was initiated.

Investments in Real
Estate.Investments in real estate and
leasehold interests are stated at cost unless circumstances
indicate that cost cannot be recovered, in which case, the
carrying value of the property is reduced to estimated fair
value. Carrying values for financial reporting purposes are
reviewed for impairment on a property-by-property basis whenever
events or changes in circumstances indicate that the carrying
value of a property may not be recoverable. Impairment is
recognized when estimated expected future cash flows
(undiscounted and without interest charges) are less than the
carrying value of the property. The estimation of expected
future net cash flows is inherently uncertain and relies on
assumptions regarding current and future economics and market
conditions and the availability of capital. If impairment
analysis assumptions change, then an adjustment to the carrying
value of the Operating Partnerships long-lived assets
could occur in the future period in which the assumptions
change. To the extent that a property is impaired, the excess of
the carrying amount of the property over its estimated fair
value is charged to earnings. As a result of recent leasing
activity and the current economic environment, the Operating
Partnership re-evaluated the carrying value of its investments
and recorded an impairment charge of $5.3 million,
$2.9 million and $18.6 million in 2003, 2002 and 2001,
respectively, on certain of its investments. The Operating
Partnership believes that there are no additional impairments of
the carrying values of its investments in real estate as of
December 31, 2003. Also during the year ended
December 31, 2003, the Operating Partnership recorded a
reduction of depreciation expense of $2.1 million to
reflect the recovery, through the settlement of a lawsuit, of
capital expenditures paid in prior years.

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial
Accounting Standard (SFAS) No. 141, Business
Combinations. SFAS No. 141 requires the Operating
Partnership to record at acquisition an intangible asset or
liability for the value attributable to above or below-market
leases, in-place leases and lease origination costs. The
requirements are applicable to all acquisitions subsequent to
July 1, 2001. The Operating Partnership regularly reviews
the impact of above or below-market leases, in-place leases and
lease origination costs for all new acquisitions and records an
intangible asset or liability accordingly when deemed material.
The adoption of SFAS No. 141 did not have a material
impact on the Operating Partnerships financial position or
results of operations.

F-9



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Depreciation and amortization are calculated
using the straight-line method over the estimated useful lives
of the real estate investments. The estimated lives and
components of depreciation and amortization expense for the
years ended December 31, are as follows (dollars in
thousands):

|                                            |                         |                                                                    |         |            |  |            |        |            |         |   |        |        |         |   |        |       |         | 
|------------------------------------------- | ----------------------- | ------------------------------------------------------------------ | ------- | ---------- |  | ---------- | ------ | ---------- | ------- | - | ------ | ------ | ------- | - | ------ | ----- | ------- | 
|Depreciation and Amortization Expense       |                         | Estimated Lives                                                    |         | 2003       |  | 2002       |        | 2001      
|                                            |                         |                                                                    |         |            |  |            |        |           
|                                            |                         | (Restated)                                                         |         | (Restated) |  | (Restated) |        | (Restated)
|Building costs on land owned by the Company |                         |                                                                    | Various |            |  | $          | 74,820 |            |         | $ | 75,853 |        |         | $ | 69,764 |      
|Building costs on ground leases             |                         |                                                                    | Various |            |  |            | 11,581 |            |         |   | 8,346  |        |         |   | 5,827  |      
|Buildings and improvements:                 |                         |                                                                    |         |            |  |            |        |            |         |   |        |        |         |   |        |      
|                                            | Roof/ HVAC/parking lots |                                                                    |         | 10         |  |            |        | 5,280      |         |   |        | 5,471  |         |   |        | 3,836 |        
|                                            | Plumbing/signage        |                                                                    |         | 7          |  |            |        | 1,319      |         |   |        | 1,170  |         |   |        | 805   |        
|                                            | Painting and other      |                                                                    |         | Various    |  |            |        | 10,696     |         |   |        | 13,370 |         |   |        | 7,664 |        
|Tenant improvements                         |                         |                                                                    | Various |            |  |            | 16,026 |            |         |   | 13,762 |        |         |   | 12,305 |      
|Lease commissions                           |                         |                                                                    | Various |            |  |            | 20,306 |            |         |   | 16,004 |        |         |   | 11,311 |      
|                                            |                         |                                                                    |         |            |  |            |        |            |         |   |        |        |         |   |        |      
|                                            |                         | Total real estate depreciation and amortization                    |         |            |  |            |        |            | 140,028 |   |        |        | 133,976 |   |        |       | 111,512 | 
|Other depreciation and amortization         |                         |                                                                    | Various |            |  |            | 2,309  |            |         |   | 2,527  |        |         |   | 2,031  |      
|Discontinued operations depreciation       |                         |                                                                    | Various |            |  |            | (3,381 | )          |         |   | (9,587 | )      |         |   | (7,849 | )    
|                                            |                         |                                                                    |         |            |  |            |        |            |         |   |        |        |         |   |        |      
|                                            |                         | Total depreciation and amortization from
    continuing operations |         |            |  |            |        | $          | 138,956 |   |        | $      | 126,916 |   |        | $     | 105,694 | 
|                                            |                         |                                                                    |         |            |  |            |        |            |         |   |        |        |         |   |        |      

The cost of buildings and improvements includes
the purchase price of the property or interest in property,
including legal fees and acquisition costs. Project costs
directly associated with the development and construction of a
real estate project, which include interest and property taxes,
are capitalized as construction in progress. Capitalized
interest related to construction projects for the years ended
December 31, 2003, 2002 and 2001, was $8.5 million,
$6.9 million and $13.7 million, respectively.

Expenditures for maintenance and repairs are
charged to operations as incurred. Maintenance expenditures
include painting and repair costs. The Operating Partnership
expenses costs as incurred and does not accrue in advance of
planned major maintenance activities. Significant renovations or
betterments that extend the economic useful life of assets are
capitalized and include parking lot, HVAC and roof replacement
costs.

Investments in Consolidated and Unconsolidated
Joint Ventures.Minority interests
represent the limited partnership interests in the Operating
Partnership and interests held by certain third parties in
several real estate joint ventures, aggregating approximately
38.1 million square feet, which are consolidated for
financial reporting purposes. Such investments are consolidated
because the Operating Partnership owns a majority interest or it
exercises significant control over major operating decisions
such as approval of budgets, selection of property managers,
asset management, investment activity and changes in financing.
When the Operating Partnership contributes properties to its
joint ventures, it recognizes a gain on the contributed
properties acquired by the third-party co-investors.

In May 2003, the FASB issued
SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity (SFAS 150). This Statement
establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a
financial instrument that is within its scope as a liability (or
an asset in some circumstances). SFAS 150 was effective
beginning in the third quarter of 2003, however, the FASB
deferred the implementation of SFAS 150 as it applied to
certain minority interests in finite-lived entities
indefinitely. The disclosure requirements for certain minority
interests in finite-lived entities still apply. The Operating

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AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Partnership adopted the requirements of
SFAS 150 in the third quarter of 2003, and, considering the
aforementioned deferral, there was no impact on the Operating
Partnerships financial position, results of operations or
cash flows. However, the minority interests associated with
certain of the Operating Partnerships consolidated joint
ventures, those that have finite lives under the terms of the
partnership agreements, represent mandatorily redeemable
interests as defined in SFAS 150. As of December 31,
2003, the aggregate book value of these minority interests in
the accompanying consolidated balance sheet was
$659.5 million and the Operating Partnership believes that
the aggregate settlement value of these interests was
approximately $729.2 million. This amount is based on the
estimated liquidation values of the assets and liabilities and
the resulting proceeds that the Operating Partnership would
distribute to its joint venture partners upon dissolution, as
required under the terms of the respective partnership
agreements. Subsequent changes to the estimated fair values of
the assets and liabilities of the consolidated joint ventures
will affect the Operating Partnerships estimate of the
aggregate settlement value. The partnership agreements do not
limit the amount that the minority partners would be entitled to
in the event of liquidation of the assets and liabilities and
dissolution of the respective partnerships. SFAS 150 was
effective beginning in the third quarter of 2003, however, the
FASB deferred the implementation of SFAS 150 as it applied
to certain minority interests in finite-lived entities. The
Operating Partnership adopted the disclosure requirements of
SFAS 150 in the third quarter of 2003, and, considering the
aforementioned deferral, there was no impact on the Operating
Partnerships financial position, results of operations or
cash flows.

The Operating Partnership has non-controlling
limited partnership interests in unconsolidated joint ventures.
These investments are not consolidated because the Operating
Partnership does not exercise significant control over major
operating decisions such as approval of budgets, selection of
property managers, investment activity and changes in financing.
The Operating Partnership accounts for the joint ventures using
the equity method of accounting. When the Operating Partnership
contributes properties to its joint ventures in exchange for
cash, it recognizes a gain representing the portion of the
contributed properties acquired by the third-party investors.

In December 2003, the FASB issued Interpretation
No. 46R, Consolidation of Variable Interest Entities(FIN 46R). FIN 46R requires a variable
interest entity to be consolidated by a company if that company
is subject to a majority of the risk of loss from the variable
interest entitys activities or entitled to receive a
majority of the entitys residual returns or both.
FIN 46R requires disclosures about variable interest
entities that a company is not required to consolidate, but in
which it has a significant variable interest. The consolidation
requirements apply to existing entities in the first reporting
period that ends after March 15, 2004. The Operating
Partnership will adopt the consolidation requirements of
FIN 46R in the first quarter of 2004 and does not believe
that any of its consolidated or unconsolidated joint ventures
are variable interest entities under the provisions of
FIN 46R.

Cash and Cash
Equivalents.Cash and cash equivalents
include cash held in financial institutions and other highly
liquid short-term investments with original maturities of three
months or less.

Restricted Cash.Restricted cash includes cash held in escrow in connection with
property purchases, Section 1031 exchange accounts and debt
or real estate tax payments.

Mortgages
Receivable.Through a wholly-owned
subsidiary, the Operating Partnership holds a mortgage loan
receivable on AMB Pier One, LLC, an unconsolidated joint
venture. The Operating Partnership also holds short-term
mortgages on properties totaling $30.1 million at
December 31, 2003. The book value of the mortgages
approximates fair value.

Accounts Receivable.Accounts receivable includes all current accounts receivable,
net of allowances, other accruals and deferred rent receivable
of $50.4 million and $46.3 million as of
December 31, 2003 and 2002, respectively. The Operating
Partnership regularly reviews the credit worthiness of its
customers and

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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

adjusts its allowance for doubtful accounts,
straight-line rent receivable balance and tenant improvement and
leasing costs amortization accordingly.

Concentration of Credit
Risk.Other real estate companies
compete with the Operating Partnership in its real estate
markets. This results in competition for customers to occupy
space. The existence of competing properties could have a
material impact on the Operating Partnerships ability to
lease space and on the amount of rent received. As of
December 31, 2003, the Operating Partnership did not have
any single tenant that accounted for greater than 3.1% of
annualized base rental revenues.

Deferred Financing
Costs.Costs incurred in connection
with financings are capitalized and amortized to interest
expense using the effective-interest method over the term of the
related loan. As of December 31, 2003 and 2002, deferred
financing costs were $18.6 million and $19.6 million,
respectively, net of accumulated amortization. Such amounts are
included in other assets on the accompanying consolidated
balance sheets.

Financial
Instruments.The Operating Partnership
adopted SFAS No. 133, Accounting for Derivative
Instruments and for Hedging Activities, as amended, on
January 1, 2001. SFAS No. 133 provides
comprehensive guidelines for the recognition and measurement of
derivatives and hedging activities and, specifically, requires
all derivatives to be recorded on the balance sheet at fair
value as an asset or liability, with an offset to accumulated
other comprehensive income or income. For revenues or expenses
denominated in non-functional currencies, the Operating
Partnership may use derivative financial instruments to manage
foreign currency exchange rate risk. The Operating
Partnerships derivative financial instruments in effect at
December 31, 2003 were a forward contract hedging against
adverse foreign exchange fluctuations in the Mexican peso
against the U.S. dollar and stock warrants obtained from
customers.

In April 2003, the FASB issued
SFAS No. 149, Amendment of Statement No. 133
on Derivative Instruments and Hedging Activities. This
Statement amends and clarifies financial accounting and
reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under
FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. The Operating
Partnership adopted the requirements of SFAS 149 in the
third quarter of 2003. The adoption did not impact the Operating
Partnerships financial position, results of operations or
cash flows.

Debt.The Operating
Partnerships debt includes both fixed and variable rate
secured debt, unsecured fixed rate debt, unsecured variable rate
debt and a credit facility. Based on borrowing rates available
to the Operating Partnership at December 31, 2003, the book
value and the estimated fair value of the fixed rate debt (both
secured and unsecured) were $2.2 billion and
$2.5 billion, respectively. The carrying value of the
variable rate debt approximates fair value.

Debt Premiums.Debt
premiums represent the excess of the fair value of debt over the
principal value of debt assumed in connection with the
Companys initial public offering and subsequent property
acquisitions. The debt premiums are being amortized as an offset
to interest expense over the term of the related debt instrument
using the effective interest method. As of December 31,
2003 and 2002, the net unamortized debt premium was
$10.8 million and $9.8 million, respectively, and are
included as a component of secured debt on the accompanying
consolidated balance sheets.

Rental Revenues and Allowance for Doubtful
Accounts.The Operating Partnership,
as a lessor, retains substantially all of the benefits and risks
of ownership of the properties and accounts for its leases as
operating leases. Rental income is recognized on a straight-line
basis over the term of the leases. Reimbursements from customers
for real estate taxes and other recoverable operating expenses
are recognized as revenue in the period the applicable expenses
are incurred. The Operating Partnership also records lease
termination fees when a customer terminates its lease by
executing a definitive termination agreement with the Operating
Partnership and the payment of the termination fee is not
subject to any conditions that must be met before the fee is due
to the Operating Partnership. In addition, the Operating
Partnership nets its allowance for

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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

doubtful accounts against rental income for
financial reporting purposes. Such amounts totaled
$5.6 million, $1.8 million and $5.2 million for
the years ended December 31, 2003, 2002 and 2001,
respectively.

Private Capital Income.Private capital income consists
primarily of acquisition and development fees, asset management
fees and priority distributions earned by AMB Capital Partners
from joint ventures and clients. Private capital income also
includes promoted interests and incentive fees from the
Operating Partnerships co-investment joint ventures. For
the year ended December 31, 2003, private capital income
includes incentive distributions of $2.5 million earned
from AMB Partners II, L.P. (Partners II).

Stock-based compensation expense.In 2002, the Operating Partnership
adopted the expense recognition provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. The Operating
Partnership values stock options issued by the Company, our
general partner, using the Black-Scholes option-pricing model
and recognizes this value as an expense over the three to
five-year vesting periods. Under this standard, recognition of
expense for stock options is applied to all options granted
after the beginning of the year of adoption. Under SFAS
No. 123, related stock-based compensation expense was
$2.4 million and $0.9 million in 2003 and 2002,
respectively. The expense is included in general and
administrative expenses in the accompanying consolidated
statements of operations. Prior to 2002, the Operating
Partnership followed the intrinsic method set forth in APB
Opinion 25, Accounting for Stock Issued to Employees. Had
compensation cost for the Operating Partnerships
stock-based compensation plans been determined based on the fair
value at the grant dates for awards prior to 2002 consistent
with the method of SFAS No. 123, the Operating
Partnerships pro forma net income available to common
unitholders would have been:

|                            |         |            |       |            |  |            |       |      |  |   |       |      | 
|--------------------------- | ------- | ---------- | ----- | ---------- |  | ---------- | ----- | ---- |  | - | ----- | ---- | 
|                            |         | 2003       |       | 2002       |  | 2001      
|                            |         |            |       |            |  |           
|                            |         | (Restated) |       | (Restated) |  | (Restated)
|Reduction to net income     |         | $          | 1,613 |            |  | $          | 2,402 |      |  | $ | 3,877 |     
|Adjusted earnings per unit: |         |            |       |            |  |            |       |      |  |   |       |     
|                            | Basic   |            | $     | 1.42       |  |            | $     | 1.33 |  |   | $     | 1.38 | 
|                            | Diluted |            | $     | 1.39       |  |            | $     | 1.30 |  |   | $     | 1.36 | 

Interest and Other Income.Interest and other income consists
primarily of interest income from mortgages receivable and on
cash and cash equivalents.

Loss on Investments in Other Companies.Investments in other companies were
accounted for on a cost basis and realized gains and losses were
included in current earnings. For its investments in private
companies, the Operating Partnership periodically reviewed its
investments and management determined if the value of such
investments had been permanently impaired. During 2001, the
Operating Partnership recognized losses on its investments in
other companies totaling $20.8 million, including its
investment in Webvan Group, Inc. The Operating Partnership had
previously recognized gains and losses on its investment in
Webvan Group, Inc. as a component of other comprehensive income.
As of December 31, 2001, the Operating Partnership had
realized losses on 100% of its investments in such other
companies. The Operating Partnership recognized no gains or
losses in 2003 or 2002 related to its investments in other
companies.

Discontinued Operations.The Operating Partnership reported
real estate dispositions as discontinued operations separately
as prescribed under the provisions of SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets. Beginning in 2002, SFAS No. 144 requires the
Operating Partnership to separately report as discontinued
operations the historical operating results attributable to
operating properties sold and held for disposition and the
applicable gain or loss on the disposition of the properties.
The consolidated statements of operations for prior periods are
also adjusted to conform with this classification. There is no
impact on the Operating Partnerships previously reported
consolidated financial position, net income or cash flows.

F-13



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Preferred Unit Redemption Issuance Costs.In July 2003, the U.S. Securities
and Exchange Commission (SEC) announced that it had
revised its position relating to the application of Emerging
Issues Task Force Topic No. D-42, The Effect on the
Calculation of Earnings per Share for the Redemption or Induced
Conversion of Preferred Stock,
(Topic D-42). As a result of this announcement,
original issuance costs related to preferred equity are to be
reflected as a reduction of net income available to common
unitholders in determining earnings per unit for the period in
which the preferred units are redeemed. The announcement
requires retroactive application of the revised position in
previously issued financial statements. As a result, the
Operating Partnerships financial statements for the year
ending December 31, 2001, have been restated to reflect a
reduction in net income available to common unitholders of
$3.2 million, representing the original issuance costs of
AMB Property II, L.P.s series C preferred units,
which were redeemed in December 2001. Diluted earnings per unit
for the year ended December 31, 2001, was $1.41 (restated)
compared to $1.47 as previously reported. The SECs revised
position on Topic D-42 did not require the Operating
Partnership to file amendments to previously filed reports and
will not impact any other previously reported periods.



|   |                             
|-- | ----------------------------
|3. | Transactions with Affiliates

AMB Capital Partners provides real estate
investment services to clients on a fee basis. The fees are
recorded as private capital income in the accompanying
consolidated statements of operations. For the year ended
December 31, 2003, private capital income includes
incentive distributions of $2.5 million earned from
Partners II. Headlands Realty Corporation conducts a
variety of businesses that include incremental income programs
and development projects available for sale to third parties.
IMD Holding Corporation also conducts a variety of businesses
that include development projects available for sale to third
parties. On December 31, 2001, AMB Investment Management.
Inc. (AMB Investment Management) was reorganized
through a series of related transactions into AMB Capital
Partners. The Operating Partnership is the managing member of
AMB Capital Partners. On May 31, 2001, the Operating
Partnership acquired 100% of the common stock of AMB Investment
Management and Headlands Realty Corporation from current and
former executive officers of the Company, a former executive
officer of AMB Investment Management, and a director of
Headlands Realty Corporation, thereby acquiring 100% of both
entities capital stock. The Operating Partnership began
consolidating its investments in AMB Investment Management
(predecessor-in-interest to AMB Capital Partners) and Headlands
Realty Corporation on May 31, 2001. Prior to May 31,
2001, the Operating Partnership reflected its investment using
the equity method and did not include expenses incurred by these
two unconsolidated preferred stock subsidiaries in general and
administrative expenses, they were netted with private capital
income. The net impact of consolidating AMB Investment
Management and Headlands Realty Corporation was not material.
General and administrative expenses for the twelve months ended
December 31, 2001, would have been $39.4 million had
the subsidiaries been consolidated beginning January 1,
2001.



|   |                                                     
|-- | ----------------------------------------------------
|4. | Real Estate Acquisition and Development
    Activity

During the year ended December 31, 2003, the
Operating Partnership invested $533.9 million in 82
industrial buildings, aggregating approximately 6.5 million
square feet, of which the Operating Partnership invested
$238.3 million in 43 industrial buildings, aggregating
approximately 3.7 million square feet, through two of the
Operating Partnerships co-investment joint ventures.

During 2003, the Operating Partnership completed
industrial developments valued at $105.7 million,
aggregating approximately 1.6 million square feet. The
Operating Partnership also initiated new industrial development
projects in North America and Spain valued at
$226.4 million, aggregating approximately 4.9 million
square feet. As of December 31, 2003, the Operating
Partnership had in its development pipeline:
(1) 16 industrial projects, which will total
approximately 5.0 million square feet and will have an
aggregate estimated investment of $233.0 million upon
completion and (2) four development projects available for
sale, which will total approximately 0.6 million square
feet and will have an aggregate estimated investment of

F-14



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

$38.8 million upon completion. As of
December 31, 2003, the Operating Partnership and its
Development Alliance Partners had funded an aggregate of
$112.2 million and needed to fund an estimated additional
$159.6 million in order to complete current and planned
projects. The Operating Partnerships development pipeline
includes projects expected to be completed through the second
quarter of 2006.

During 2002, the Operating Partnership invested
$403.3 million in operating properties, consisting of 43
industrial buildings, aggregating approximately 5.4 million
square feet, and a parking lot adjacent to Los Angeles
International Airport. The Operating Partnerships
acquisitions included the investment of $166.5 million in
31 industrial buildings, aggregating approximately
3.1 million square feet, through three of the Operating
Partnerships co-investment joint ventures.

During 2002, the Operating Partnership completed
industrial developments valued at $135.4 million,
aggregating approximately 3.1 million square feet. The
Operating Partnership also initiated new industrial development
projects in North America, France and Singapore valued at
$90.6 million, aggregating approximately 1.8 million
square feet.



|   |                                                                                           
|-- | ------------------------------------------------------------------------------------------
|5. | Gains from Dispositions of Real Estate,
    Development Sales, and Discontinued Operations

Gains from Dispositions of Real Estate.On February 19, 2003, the
Operating Partnership contributed $94.0 million in
operating properties, consisting of 24 industrial
buildings, aggregating approximately 2.4 million square
feet, to its newly formed unconsolidated joint venture,
Industrial Fund I, LLC. The Operating Partnership
recognized a gain of $7.4 million on the contribution,
representing the portion of the contributed properties acquired
by the third-party investors in exchange for cash.

In 2002, the Operating Partnership divested
itself of two industrial buildings and one retail center,
aggregating approximately 0.8 million square feet, for an
aggregate price of $50.6 million, with a resulting loss of
$0.8 million. In June 2002, the Operating Partnership also
contributed $76.9 million in operating properties,
consisting of 15 industrial buildings, aggregating approximately
1.9 million square feet, to its consolidated co-investment
joint venture, AMB-SGP, L.P. The Operating Partnership
recognized a gain of $3.3 million on the contribution,
representing the portion of the contributed properties acquired
by the third-party investors to the extent of cash proceeds
received.

During 2001, the Operating Partnership divested
itself of 24 industrial and two retail buildings,
aggregating approximately 3.2 million square feet, for an
aggregate price of $193.4 million, with a resulting net
gain of $24.1 million, which is net of minority
interests share. The resulting net gain is before the gain
on the Operating Partnerships contributed properties of
$17.8 million. During 2001, the Operating Partnership also
contributed operating properties valued at $539.2 million,
consisting of 111 industrial buildings, aggregating
approximately 10.8 million square feet, to three of its
co-investment joint ventures. The properties contributed to the
co-investment joint ventures were reflected at the Operating
Partnerships historical cost because the Operating
Partnership controls these joint ventures and, therefore, they
were under common control. The Operating Partnership recognized
a gain of $17.8 million related to these contributions
representing the portion of the contributed properties acquired
by the third-party co-investors.

Development Sales.During 2003, the Operating Partnership
sold seven development-for-sale and other projects, aggregating
approximately 0.5 million square feet, for an aggregate
price of $74.8 million, resulting in an after-tax gain of
$14.4 million. The other projects included the sale of the
Operating Partnerships purchase right on Platinum
Distribution Center and the sale of the North Bay Business
Center, which the Operating Partnership purchased in October
2003.

During 2002, the Operating Partnership sold seven
development-for-sale projects, aggregating approximately
0.2 million square feet, for an aggregate price of
$17.0 million, with a resulting gain of $1.2 million.

F-15



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

During 2001, the Operating Partnership sold two
development-for-sale projects, aggregating approximately
0.3 million square feet, for an aggregate price of
$52.3 million, with a resulting gain of $17.3 million.

Discontinued Operations.The Operating Partnership reported its
property divestitures as discontinued operations separately as
prescribed under the provisions of SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets. Beginning in 2002, SFAS No. 144 requires the
Operating Partnership to separately report as discontinued
operations the historical operating results attributable to
operating properties sold and held for disposition and the
applicable gain or loss on the disposition of the properties.
Although the application of SFAS No. 144 may affect the
presentation of the Operating Partnerships results of
operations for the periods that it has already reported in
filings with the SEC, there will be no effect on its previously
reported financial position, net income or cash flows.

During 2003, the Operating Partnership divested
itself of 24 industrial buildings and two retail centers,
aggregating approximately 2.8 million square feet, for an
aggregate price of $272.3 million, with a resulting net
gain of $42.9 million.

During 2002, the Operating Partnership divested
itself of 56 industrial buildings, one retail center and an
undeveloped land parcel, aggregating approximately
4.9 million square feet, for an aggregate price of
$193.4 million, with a resulting net gain of
$10.6 million. In November 2002, the Operating
Partnerships joint venture partner in Partners II
increased its ownership in Partners II from 50% to 80% by
acquiring 30% of the Operating Partnerships interest in
Partners II. The Operating Partnership recognized a gain of
$6.3 million on the sale of its 30% interest.

Properties Held for Divestiture.As of December 31, 2003, the
Operating Partnership had decided to divest itself of one
industrial building and one undeveloped land parcel with a net
book value of $11.8 million. The properties either are not
in the Operating Partnerships core markets or do not meet
its current strategic objectives. The divestitures of the
properties are subject to negotiation of acceptable terms and
other customary conditions. Properties held for divestiture are
stated at the lower of cost or estimated fair value less costs
to sell. The following summarizes the condensed results of
operations of the properties held for divestiture and sold under
SFAS No. 144 for the years ended December 31, (dollars
in thousands):

|                                        |                                                |      |        |       |  |      |        |        |  |   |        |        | 
|--------------------------------------- | ---------------------------------------------- | ---- | ------ | ----- |  | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                        |                                                | 2003 |        | 2002  |  | 2001
|                                        |                                                |      |        |       |  |     
|Rental revenues                         |                                                | $    | 19,700 |       |  | $    | 48,028 |        |  | $ | 44,474 |       
|Straight-line rents                     |                                                |      | (259   | )     |  |      | 2,330  |        |  |   | 298    |       
|Property operating expenses             |                                                |      | (2,145 | )     |  |      | (5,845 | )      |  |   | (5,306 | )     
|Real estate taxes                       |                                                |      | (1,544 | )     |  |      | (6,203 | )      |  |   | (6,548 | )     
|Depreciation and amortization           |                                                |      | (3,381 | )     |  |      | (9,587 | )      |  |   | (7,849 | )     
|Interest, including amortization        |                                                |      | (1,867 | )     |  |      | (4,902 | )      |  |   | (4,758 | )     
|Joint venture partners share of income |                                                |      | (1,471 | )     |  |      | (2,049 | )      |  |   | (1,183 | )     
|                                        |                                                |      |        |       |  |      |        |        |  |   |        |       
|                                        | Income attributable to discontinued operations |      | $      | 9,033 |  |      | $      | 21,772 |  |   | $      | 19,128 | 
|                                        |                                                |      |        |       |  |      |        |        |  |   |        |       

As of December 31, 2003 and 2002, assets and
liabilities attributable to properties held for divestiture
under the provisions of SFAS No. 144 consisted of the
following (dollars in thousands):

|                                       |  |              |   |              |  |   |     | 
|-------------------------------------- |  | ------------ | - | ------------ |  | - | --- | 
|                                       |  | December 31, |   | December 31,
|                                       |  | 2003         |   | 2002        
|                                       |  |              |   |             
|Accounts receivable, net               |  | $            |  |              |  | $ | 398 | 
|Other assets                           |  | $            |  |              |  | $ | 1   | 
|Secured debt                           |  | $            |  |              |  | $ |    | 
|Accounts payable and other liabilities |  | $            | 3 |              |  | $ | 235 | 

F-16



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                     
|-- | --------------------
|6. | Mortgages Receivable

Through a wholly-owned subsidiary, the Operating
Partnership holds a mortgage loan receivable on AMB Pier One,
LLC, an unconsolidated joint venture. As of December 31,
2003 and 2002, the outstanding balance on the note was
$13.0 million and $13.1 million, respectively. The
Operating Partnership also holds various other mortgages
receivable from property sales. The Operating Partnerships
mortgages receivable at December 31, 2003 and 2002,
consisted of the following:

|                                         |                            |                        |                |          |               |      |               |      |       |      |        |               |   |   |        |        |     |   |      |   |      |  |      |  | 
|---------------------------------------- | -------------------------- | ---------------------- | -------------- | -------- | ------------- | ---- | ------------- | ---- | ----- | ---- | ------ | ------------- | - | - | ------ | ------ | --- | - | ---- | - | ---- |  | ---- |  | 
|                                         |                            |                        |                |          |               |      |               |      |       |      |        | Companys    
|                                         |                            |                        |                |          |               |      |               |      |       |      |        | Ownership    
|Mortgage Receivable                      |                            | Market                 |                | Maturity |               | 2003 |               | 2002 |       | Rate |        | Percentage(1)
|                                         |                            |                        |                |          |               |      |               |      |       |      |        |              
|1. Pier 1                                |                            |                        | SF Bay Area    |          |               |      | May 2026      |      |       | $    | 13,042 |               |   | $ | 13,133 |        |     |   | 13.0 | % |      |  | 100% | 
|2. Platinum Distribution Center          |                            |                        | No. New Jersey |          |               |      | February 2004 |      |       |      | 19,500 |               |   |   |       |        |     |   | 6.0  | % |      |  | 20%  | 
|3. Platinum Distribution Center          |                            |                        | No. New Jersey |          |               |      | November 2006 |      |       |      | 1,300  |               |   |   |       |        |     |   | 12.0 | % |      |  | 20%  | 
|4. North Bay Distribution Center/BAB     |                            | San Francisco Bay Area |                |          | December 2004 |      |               |      | 7,040 |      |        |               |  |   |        |        | 5.5 | % |      |   | 100% | 
|5. North Bay Distribution Center/Corovan |                            | San Francisco Bay Area |                |          | December 2004 |      |               |      | 2,263 |      |        |               |  |   |        |        | 7.3 | % |      |   | 100% | 
|                                         |                            |                        |                |          |               |      |               |      |       |      |        |               |   |   |        |        |     |   |      |   |      |  |      | 
|                                         | Total Mortgages Receivable |                        |                |          |               |      |               |      |       |      | $      | 43,145        |   |   | $      | 13,133 |     |   |      |   |      |  |      |  | 
|                                         |                            |                        |                |          |               |      |               |      |       |      |        |               |   |   |        |        |     |   |      |   |      |  |      | 



---



|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the Operating Partnerships
    ownership percentage in the co-investment joint venture that
    holds the mortgage investment.

F-17



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |     
|-- | ----
|7. | Debt

As of December 31, 2003 and 2002, debt
consisted of the following (dollars in thousands):

|                                                                                                                                                                                                                  |                                        |                         |           |              |           |   |         |           |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ----------------------- | --------- | ------------ | --------- | - | ------- | --------- | --------- | 
|                                                                                                                                                                                                                  |                                        | December 31,            |           | December 31,
|                                                                                                                                                                                                                  |                                        | 2003                    |           | 2002        
|                                                                                                                                                                                                                  |                                        |                         |           |             
|Wholly-owned secured debt, varying interest rates
    from 4.0% to 10.4%, due June 2004 to January 2014 (weighted
    average interest rate of 8.1% at December 31, 2003 and 2002)                                |                                        | $                       | 291,516   |              |           | $ | 381,764 |          
|Joint venture secured debt, varying interest
    rates from 2.6% to 10.6%, due July 2004 to June 2023 (weighted
    average interest rates of 6.7% and 7.0% at December 31,
    2003 and 2002, respectively)      |                                        |                         | 1,061,585 |              |           |   | 893,093 |          
|Unsecured senior debt securities, varying
    interest rates from 1.5% to 8.0%, due June 2005 to June 2018
    (weighted average interest rates of 6.8% and 7.2% at
    December 31, 2003 and 2002, respectively) |                                        |                         | 925,000   |              |           |   | 800,000 |          
|Alliance Fund II credit facility                                                                                                                                                                                  |                                        |                         |          |              |           |   | 45,500  |          
|Unsecured debt, due June 2013 and November 2015,
    interest rate of 7.5%                                                                                                                                        |                                        |                         | 9,628     |              |           |   | 10,186  |          
|Unsecured credit facility, variable interest
    rate, due December 2005 (weighted average interest rates of 1.9%
    and 2.0% at December 31, 2003 and 2002, respectively)                                       |                                        |                         | 275,739   |              |           |   | 95,000  |          
|                                                                                                                                                                                                                  |                                        |                         |           |              |           |   |         |          
|                                                                                                                                                                                                                  | Total debt before unamortized premiums |                         |           | 2,563,468    |           |   |         | 2,225,543 |          
|                                                                                                                                                                                                                  | Unamortized premiums                   |                         |           | 10,789       |           |   |         | 9,818     |          
|                                                                                                                                                                                                                  |                                        |                         |           |              |           |   |         |          
|                                                                                                                                                                                                                  |                                        | Total consolidated debt |           | $            | 2,574,257 |   |         | $         | 2,235,361 | 
|                                                                                                                                                                                                                  |                                        |                         |           |              |           |   |         |          

Secured debt generally requires monthly principal
and interest payments. The secured debt is secured by deeds of
trust on certain properties and is generally non-recourse. As of
December 31, 2003 and 2002, the total gross investment book
value of those properties securing the debt was
$2.6 billion and $2.6 billion, respectively, including
$1.8 billion and $1.6 billion, respectively, in
consolidated joint ventures. All of the secured debt bears
interest at fixed rates, except for five loans with an aggregate
principal amount of $52.3 million as of December 31,
2003, which bear interest at variable rates (weighted average
interest rate of 3.2% as of December 31, 2003). The secured
debt has various covenants. Management believes that the
Operating Partnership was in compliance with its financial
covenants as of December 31, 2003 and 2002. As of
December 31, 2003, the Operating Partnership had
42 non-recourse, secured loans, which are
cross-collateralized by 86 properties, totaling
$920.6 million (not including unamortized debt premiums).

In June 1998, the Operating Partnership issued
$400.0 million of unsecured senior debt securities.
Interest on the unsecured senior debt securities is payable
semi-annually. The 2015 notes are putable and callable in
September 2005. In August 2000, the Operating Partnership
commenced a medium-term note program and subsequently issued
$400.0 million of medium-term notes, which are guaranteed
by the Company. In May 2002, the Operating Partnership commenced
a new medium-term note program for the issuance of up to
$400.0 million in principal amount of medium-term notes
(unsecured senior debt securities). On November 10, 2003,
the Operating Partnership issued $75.0 million aggregate
principal amount of senior unsecured notes to Teachers Insurance
and Annuity Association of America. The Company guaranteed the
principal amount and interest on the notes, which mature on
November 1, 2013, and bear interest at 5.53% per annum.
Teachers has agreed that until November 10, 2005, the
Operating Partnership can require Teachers to return the notes
to it for cancellation for an obligation of equal dollar amount
under a first mortgage loan to be secured by properties
determined by the Operating Partnership, except that in the
event the ratings on Operating Partnerships senior
unsecured debt are downgraded by two ratings agencies to BBB-,
the Operating Partnership will only have ten days after the last
of these downgrades to exercise this right. During

F-18



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

the period when the Operating Partnership can
exercise its cancellation right and until any mortgage loans
close, Teachers has agreed not to sell, contract to sell,
pledge, transfer or otherwise dispose of, any portion of the
notes. On November 21, 2003, the Operating Partnership
issued $50.0 million aggregate principal amount of floating
rate senior unsecured notes. The Company guaranteed the
principal amount and interest on the notes, which mature on
November 21, 2006, and bear interest at a floating rate of
3-month LIBOR telerate plus 40 basis points. As of
December 31, 2003, $275.0 million of capacity remained
under the May 2002 medium- term note program. The senior debt
securities are subject to various covenants. Management believes
that the Operating Partnership was in compliance with its
financial covenants as of December 31, 2003 and 2002.

In December 2002, the Operating Partnership
renewed its $500.0 million unsecured credit facility. The
Company guarantees the Operating Partnerships obligations
under the credit facility. The credit facility matures in
December 2005, has a one-year extension option and is subject to
a 20 basis point annual facility fee. The credit facility
includes a multi-currency component, which was amended effective
July 10, 2003, to increase from $150.0 million to
$250.0 million the amount that may be drawn in either
British pounds sterling, Euros or Yen (provided that such
currency is readily available and freely transferable and
convertible to U.S. dollars, the Reuters Monitor Money
Rates Service reports LIBOR for such currency in interest
periods of 1, 2, 3 or 6 months and the Operating
Partnership has an investment grade credit rating).
U.S. dollar borrowings under the credit facility currently
bear interest at LIBOR plus 60 basis points. Euro
borrowings under the credit facility currently bear interest at
EURIBOR plus 60 basis points. Yen borrowings under the
credit facility currently bear interest at the Japanese Yen
TIBOR rate plus 60 basis points. Both the facility fee and
the interest rate are based on the Operating Partnerships
credit rating, which is currently investment grade. The
Operating Partnership has the ability to increase available
borrowings to $700.0 million by adding additional banks to
the facility or obtaining the agreement of existing banks to
increase their commitments. The Operating Partnership uses its
unsecured credit facility principally for acquisitions, funding
its development activity and for general working capital
requirements. Monthly debt service payments on the credit
facility are interest only. The total amount available under the
credit facility fluctuates based upon the borrowing base, as
defined in the agreement governing the credit facility,
generally the value of the Operating Partnerships
unencumbered properties. As of December 31, 2003, the
outstanding balance on the credit facility was
$275.7 million and the remaining amount available was
$171.6 million, net of outstanding letters of credit of
$52.7 million (excluding the additional $200.0 million
of potential additional capacity). The outstanding balance
included borrowings denominated in Euros and Yen and translated
to U.S. dollars at December 31, 2003, of
$83.1 million and $47.6 million, respectively.
Management believes that the Operating Partnership was in
compliance with its financial covenants at December 31,
2003.

In August 2001, AMB Institutional Alliance
Fund II, L.P. (Alliance Fund II) obtained
a $150.0 million credit facility secured by the unfunded
capital commitments of the investors in AMB Institutional
Alliance REIT II, Inc. (Alliance REIT II)
and the Alliance Fund II. In April 2003, the Alliance
Fund II repaid the credit facility with capital
contributions and secured debt financing proceeds and terminated
the credit facility.

F-19



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

As of December 31, 2003, the scheduled
maturities of the Operating Partnerships total debt,
excluding unamortized debt premiums, were as follows (dollars in
thousands):

|           |       |         |        |         |  |            |         |           |  |            |         |         |  |   |       |       |  |   |         |         |  |   |         |           | 
|---------- | ----- | ------- | ------ | ------- |  | ---------- | ------- | --------- |  | ---------- | ------- | ------- |  | - | ----- | ----- |  | - | ------- | ------- |  | - | ------- | --------- | 
|           |       | Wholly- |        |         |  | Unsecured  |         |           |  |            |         |        
|           |       | owned   |        | Joint   |  | Senior     |         |           |  |            |         |        
|           |       | Secured |        | Venture |  | Debt       |         | Unsecured |  | Credit     |         |        
|           |       | Debt    |        | Debt    |  | Securities |         | Debt      |  | Facilities |         | Total  
|           |       |         |        |         |  |            |         |           |  |            |         |        
|2004       |       | $       | 57,735 |         |  | $          | 40,135  |           |  | $          |        |         |  | $ | 600   |       |  | $ |        |         |  | $ | 98,470  |          
|2005       |       |         | 44,567 |         |  |            | 62,951  |           |  |            | 250,000 |         |  |   | 647   |       |  |   | 275,739 |         |  |   | 633,904 |          
|2006       |       |         | 82,857 |         |  |            | 62,304  |           |  |            | 75,000  |         |  |   | 698   |       |  |   |        |         |  |   | 220,859 |          
|2007       |       |         | 14,661 |         |  |            | 53,158  |           |  |            | 75,000  |         |  |   | 752   |       |  |   |        |         |  |   | 143,571 |          
|2008       |       |         | 32,940 |         |  |            | 162,383 |           |  |            | 175,000 |         |  |   | 810   |       |  |   |        |         |  |   | 371,133 |          
|2009       |       |         | 4,246  |         |  |            | 107,187 |           |  |            |        |         |  |   | 873   |       |  |   |        |         |  |   | 112,306 |          
|2010       |       |         | 51,054 |         |  |            | 128,639 |           |  |            | 75,000  |         |  |   | 941   |       |  |   |        |         |  |   | 255,634 |          
|2011       |       |         | 524    |         |  |            | 275,618 |           |  |            | 75,000  |         |  |   | 1,014 |       |  |   |        |         |  |   | 352,156 |          
|2012       |       |         | 2,451  |         |  |            | 146,946 |           |  |            |        |         |  |   | 1,093 |       |  |   |        |         |  |   | 150,490 |          
|2013       |       |         | 442    |         |  |            | 2,045   |           |  |            | 75,000  |         |  |   | 920   |       |  |   |        |         |  |   | 78,407  |          
|Thereafter |       |         | 39     |         |  |            | 20,219  |           |  |            | 125,000 |         |  |   | 1,280 |       |  |   |        |         |  |   | 146,538 |          
|           |       |         |        |         |  |            |         |           |  |            |         |         |  |   |       |       |  |   |         |         |  |   |         |          
|           | Total |         | $      | 291,516 |  |            | $       | 1,061,585 |  |            | $       | 925,000 |  |   | $     | 9,628 |  |   | $       | 275,739 |  |   | $       | 2,563,468 | 
|           |       |         |        |         |  |            |         |           |  |            |         |         |  |   |       |       |  |   |         |         |  |   |         |          



|   |                 
|-- | ----------------
|8. | Leasing Activity

Future minimum base rental income due under
non-cancelable leases with customers in effect as of
December 31, 2003, was as follows (dollars in thousands):

|           |       |   |         |           | 
|---------- | ----- | - | ------- | --------- | 
|2004       |       | $ | 480,830 |          
|2005       |       |   | 390,969 |          
|2006       |       |   | 310,269 |          
|2007       |       |   | 238,375 |          
|2008       |       |   | 171,272 |          
|Thereafter |       |   | 420,000 |          
|           |       |   |         |          
|           | Total |   | $       | 2,011,715 | 
|           |       |   |         |          

The schedule does not reflect future rental
revenues from the renewal or replacement of existing leases and
excludes property operating expense reimbursements. In addition
to minimum rental payments, certain customers pay reimbursements
for their pro rata share of specified operating expenses, which
amounted to $103.6 million, $108.0 million and
$100.4 million for the years ended December 31, 2003,
2002 and 2001, respectively. These amounts are included as
rental revenue and operating expenses in the accompanying
consolidated statements of operations. Some leases contain
options to renew.



|   |             
|-- | ------------
|9. | Income Taxes

As a partnership, the allocated share of income
of the Operating Partnership is included in the income tax
returns of the partners. Accordingly, no accounting for income
taxes is required in the accompanying consolidated financial
statements. The Operating Partnership may be subject to certain
state, local and foreign taxes on its income and property. In
addition, the Operating Partnership is required to pay federal
and state income tax on its net taxable income, if any, from the
activities conducted by the Operating Partnerships taxable
REIT subsidiaries.

F-20



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following is a reconciliation of net income
available to common unitholders attributable to the general
partner to taxable income available to common unitholders for
the years ended December 31, (dollars in thousands):

|                                                                                   |                                                |            |          |            |  |            |          |         |  |   |          |         | 
|---------------------------------------------------------------------------------- | ---------------------------------------------- | ---------- | -------- | ---------- |  | ---------- | -------- | ------- |  | - | -------- | ------- | 
|                                                                                   |                                                | 2003       |          | 2002       |  | 2001      
|                                                                                   |                                                |            |          |            |  |           
|                                                                                   |                                                | (Restated) |          | (Restated) |  | (Restated)
|Net income available to common unitholders
    attributable to the general partner |                                                | $          | 116,716  |            |  | $          | 113,035  |         |  | $ | 120,100  |        
|Book depreciation and amortization                                                 |                                                |            | 138,956  |            |  |            | 126,916  |         |  |   | 105,694  |        
|Book depreciation discontinued operations                                          |                                                |            | 3,381    |            |  |            | 9,587    |         |  |   | 7,849    |        
|Impairment losses                                                                  |                                                |            | 5,251    |            |  |            | 2,846    |         |  |   | 18,600   |        
|Tax depreciation and amortization                                                  |                                                |            | (129,608 | )          |  |            | (125,888 | )       |  |   | (117,400 | )      
|Book/tax difference on gain on divestitures of
    real estate                     |                                                |            | 13,783   |            |  |            | 25,178   |         |  |   | (7,563   | )      
|Other book/tax differences, net(1)                                                 |                                                |            | (5,507   | )          |  |            | (40,039  | )       |  |   | 15,567   |        
|                                                                                   |                                                |            |          |            |  |            |          |         |  |   |          |        
|                                                                                   | Taxable income available to common unitholders |            | $        | 142,972    |  |            | $        | 111,635 |  |   | $        | 142,847 | 
|                                                                                   |                                                |            |          |            |  |            |          |         |  |   |          |        



---



|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(1) | Primarily due to straight-line rent, prepaid
    rent, joint venture accounting and debt premium amortization
    timing differences.



|    |                                                                          
|--- | -------------------------------------------------------------------------
|10. | Minority Interests in Consolidated Joint
    Ventures and Preferred Units

Minority interests in the Operating Partnership
represent the limited partnership interests in the Operating
Partnership and interests held by certain third parties in
several real estate joint ventures, aggregating approximately
38.1 million square feet, which are consolidated for
financial reporting purposes. Such investments are consolidated
because the Operating Partnership owns a majority interest or
exercises significant control over major operating decisions
such as approval of budgets, selection of property managers,
asset management, investment activity and changes in financing.

The Operating Partnership enters into
co-investment joint ventures with institutional investors. The
Operating Partnerships co-investment joint ventures are
engaged in the acquisition, ownership, operation, management
and, in some cases, the renovation, expansion and development,
of industrial buildings in target markets nationwide.

F-21



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Operating Partnerships co-investment
joint ventures total investments in properties at
December 31, 2003 and 2002 (dollars in thousands) were:

|                                             |  |                                                                   |  |               |     |      |  |      |           |  |  |   |           | 
|-------------------------------------------- |  | ----------------------------------------------------------------- |  | ------------- | --- | ---- |  | ---- | --------- |  |  | - | --------- | 
|                                             |  |                                                                   |  | Operating     |     |      |  |     
|                                             |  |                                                                   |  | Partnerships |     |      |  |     
|                                             |  |                                                                   |  | Ownership     |     |      |  |     
|Co-investment Joint Venture                  |  | Joint Venture Partner                                             |  | Percentage    |     | 2003 |  | 2002
|                                             |  |                                                                   |  |               |     |      |  |     
|AMB/ Erie, L.P.                              |  | Erie Insurance Company and affiliates                             |  |               | 50% |      |  | $    | 156,174   |  |  | $ | 180,169   | 
|AMB Institutional Alliance Fund I,
    L.P.  |  | AMB Institutional Alliance REIT I, Inc.(1)                        |  |               | 21% |      |  |      | 417,902   |  |  |   | 403,760   | 
|AMB Partners II, L.P.                        |  | City and County of San Francisco
    Employees Retirement System |  |               | 20% |      |  |      | 428,837   |  |  |   | 240,179   | 
|AMB-SGP, L.P.                                |  | Industrial JV Pte Ltd(2)                                          |  |               | 50% |      |  |      | 408,507   |  |  |   | 379,207   | 
|AMB Institutional Alliance Fund II,
    L.P. |  | AMB Institutional Alliance
    REIT II, Inc.(3)                   |  |               | 20% |      |  |      | 449,709   |  |  |   | 355,670   | 
|AMB-AMS, L.P.(4)                             |  | BPMT and TNO(5)                                                   |  |               | 39% |      |  |      |          |  |  |   |          | 
|                                             |  |                                                                   |  |               |     |      |  |      |           |  |  |   |           | 
|Total                                        |  |                                                                   |  |               |     |      |  | $    | 1,861,129 |  |  | $ | 1,558,985 | 
|                                             |  |                                                                   |  |               |     |      |  |      |           |  |  |   |           | 



---



|    |                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|(1) | Included 15 institutional investors as
    stockholders as of December 31, 2003.                                                   
|   
|(2) | A subsidiary of the real estate investment
    subsidiary of the Government of Singapore Investment Corporation.                   
|   
|(3) | Included 13 institutional investors as
    stockholders as of December 31, 2003.                                                   
|   
|(4) | AMB-AMS, L.P. is a commitment to form a
    co-investment partnership with two Dutch pension funds advised
    by Mn Services NV.  
|   
|(5) | BPMT is Stichting Bedrijfspensioenfonds voor de
    Metaal en Technische Bedrijfstakken and TNO is Stichting
    Pensioenfonds TNO.

On November 26, 2003, the Operating
Partnership redeemed all 1,300,000 of its outstanding
8 5/8% Series B Cumulative Redeemable Preferred
Partnership Units, for an aggregate redemption price of
$65.6 million, including accrued and unpaid dividends.

On July 14, 2003, AMB Property II,
L.P., one of the Operating Partnerships subsidiaries,
repurchased 66,300 of its outstanding 7.95% Series F
Cumulative Redeemable Preferred Limited Partnership Units from a
single institutional investor. AMB Property II, L.P.
repurchased the units for an aggregate cost of
$3.3 million, including accrued and unpaid dividends.

On July 31, 2002, AMB Property II, L.P.
repurchased 130,000 of its 7.95% Series F Cumulative
Redeemable Preferred Limited Partnership Units and all 20,000 of
its outstanding 7.95% Series G Cumulative Redeemable
Preferred Limited Partnership Units from a single institutional
investor. AMB Property II, L.P. repurchased the units for an
aggregate cost of $7.1 million, including accrued and
unpaid dividends and a redemption discount of $0.4 million.

On April 17, 2002, the Operating Partnership
issued and sold 800,000 7.95% Series K Cumulative
Redeemable Preferred Limited Partnership Units at a price of
$50.00 per unit in a private placement. Distributions are
cumulative from the date of issuance and payable quarterly in
arrears. The series K preferred units are redeemable by the
Operating Partnership on or after April 17, 2007, subject
to certain conditions, for

F-22



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

cash at a redemption price equal to
$50.00 per unit, plus accumulated and unpaid distributions
thereon, if any, to the redemption date. The series K
preferred units are exchangeable, at specified times and subject
to certain conditions, on a one-for-one basis, for shares of the
Companys series K preferred stock. The Operating
Partnership used the net proceeds of $39.0 million for
general corporate purposes, which included the partial repayment
of indebtedness and the acquisition and development of
additional properties.

The following table distinguishes the minority
interest liability as of December 31, 2003 and 2002
(dollars in thousands):

|                                    |                                                                  |                          |         |                   |         |   |         |        |         | 
|----------------------------------- | ---------------------------------------------------------------- | ------------------------ | ------- | ----------------- | ------- | - | ------- | ------ | ------- | 
|                                    |                                                                  | December 31, 2003        |         | December 31, 2002
|                                    |                                                                  |                          |         |                  
|                                    |                                                                  | (Restated)               |         | (Restated)       
|Joint venture partners              |                                                                  | $                        | 658,723 |                   |         | $ | 488,026 |       
|Held through AMB Property II, L.P.: |                                                                  |                          |         |                   |         |   |         |       
|                                    | Series D preferred units (liquidation
    preference of $79,767) |                          |         | 77,684            |         |   |         | 77,684 |        
|                                    | Series E preferred units (liquidation
    preference of $11,022) |                          |         | 10,788            |         |   |         | 10,788 |        
|                                    | Series F preferred units (liquidation
    preference of $10,057) |                          |         | 9,900             |         |   |         | 13,082 |        
|                                    | Series H preferred units (liquidation
    preference of $42,000) |                          |         | 40,912            |         |   |         | 40,912 |        
|                                    | Series I preferred units (liquidation
    preference of $25,500) |                          |         | 24,800            |         |   |         | 24,800 |        
|                                    |                                                                  |                          |         |                   |         |   |         |       
|                                    |                                                                  | Total minority interests |         | $                 | 822,807 |   |         | $      | 655,292 | 
|                                    |                                                                  |                          |         |                   |         |   |         |       

The following table distinguishes the minority
interests share of income, including minority interests
share of development profits, but excluding minority interests
share of discontinued operations (dollars in thousands):

|                                    |                                                                  |                                               |        |            |        |            |        |       |        |   |        |       |        | 
|----------------------------------- | ---------------------------------------------------------------- | --------------------------------------------- | ------ | ---------- | ------ | ---------- | ------ | ----- | ------ | - | ------ | ----- | ------ | 
|                                    |                                                                  | 2003                                          |        | 2002       |        | 2001      
|                                    |                                                                  |                                               |        |            |        |           
|                                    |                                                                  | (Restated)                                    |        | (Restated) |        | (Restated)
|Joint Venture Partners              |                                                                  | $                                             | 42,244 |            |        | $          | 28,845 |       |        | $ | 29,816 |      
|Held through AMB Property II, L.P.: |                                                                  |                                               |        |            |        |            |        |       |        |   |        |      
|                                    | Series C preferred units (repurchased in
    December 2001)      |                                               |        |           |        |            |        |      |        |   |        | 8,540 |       
|                                    | Series D preferred units (liquidation
    preference of $79,767) |                                               |        | 6,182      |        |            |        | 6,182 |        |   |        | 6,180 |       
|                                    | Series E preferred units (liquidation
    preference of $11,022) |                                               |        | 854        |        |            |        | 854   |        |   |        | 856   |       
|                                    | Series F preferred units (liquidation
    preference of $10,057) |                                               |        | 931        |        |            |        | 1,342 |        |   |        | 1,580 |       
|                                    | Series G preferred units (repurchased in
    July 2002)          |                                               |        |           |        |            |        | 43    |        |   |        | 80    |       
|                                    | Series H preferred units (liquidation
    preference of $42,000) |                                               |        | 3,412      |        |            |        | 3,412 |        |   |        | 3,412 |       
|                                    | Series I preferred units (liquidation
    preference of $25,500) |                                               |        | 2,040      |        |            |        | 2,040 |        |   |        | 1,553 |       
|                                    |                                                                  |                                               |        |            |        |            |        |       |        |   |        |      
|                                    |                                                                  | Total minority interests share of net income |        | $          | 55,663 |            |        | $     | 42,718 |   |        | $     | 52,017 | 
|                                    |                                                                  |                                               |        |            |        |            |        |       |        |   |        |      

F-23



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                                 
|--- | ------------------------------------------------
|11. | Investments in Unconsolidated Joint
    Ventures

The Operating Partnerships investment in
unconsolidated joint ventures at December 31, 2003 and
2002, totaled $52.0 million and $64.4 million,
respectively. The Operating Partnerships unconsolidated
joint ventures net equity investments at December 31,
2003 and 2002 (dollars in thousands) were:

|                                                   |  |             |  |                   |  |        |            |      |  |      |        |            |  |   |        |  |  |  |    |  
|-------------------------------------------------- |  | ----------- |  | ----------------- |  | ------ | ---------- | ---- |  | ---- | ------ | ---------- |  | - | ------ |  |  |  | -- | -
|                                                   |  |             |  |                   |  | Square |            |      |  |      |        | Ownership 
|Unconsolidated Joint Ventures                      |  | Market      |  | Alliance Partner  |  | Feet   |            | 2003 |  | 2002 |        | Percentage
|                                                   |  |             |  |                   |  |        |            |      |  |      |        |           
|1. Elk Grove Du Page                               |  | Chicago     |  | Hamilton Partners |  |        | 4,046,721  |      |  | $    | 31,548 |            |  | $ | 58,966 |  |  |  | 56 | %
|2. Pico Rivera                                     |  | Los Angeles |  | Majestic Realty   |  |        | 855,600    |      |  |      | 1,091  |            |  |   | 2,444  |  |  |  | 50 | %
|3. Monte Vista Spectrum                            |  | Los Angeles |  | Majestic Realty   |  |        | 576,852    |      |  |      | 487    |            |  |   | 2,983  |  |  |  | 50 | %
|4. Industrial Fund I, LLC                          |  | Various     |  | Citigroup         |  |        | 2,446,334  |      |  |      | 4,173  |            |  |   |       |  |  |  | 15 | %
|5. Sterling Distribution Center                    |  | Los Angeles |  | Majestic Realty   |  |        | 1,880,000  |      |  |      | 12,643 |            |  |   |       |  |  |  | 50 | %
|6. Airport Logistics Park of Singapore
    Phase I |  | Singapore   |  | Boustead Projects |  |        | 233,773    |      |  |      | 2,067  |            |  |   | 35     |  |  |  | 50 | %
|                                                   |  |             |  |                   |  |        |            |      |  |      |        |            |  |   |        |  |  |  |    |  
|Total Unconsolidated Joint Ventures                |  |             |  |                   |  |        | 10,039,280 |      |  | $    | 52,009 |            |  | $ | 64,428 |  |  |  |    |  
|                                                   |  |             |  |                   |  |        |            |      |  |      |        |            |  |   |        |  |  |  |    |  

On February 19, 2003, the Operating
Partnership formed Industrial Fund I, LLC, a joint venture
with Citigroup Global Investments Real Estate LP, LLC, a
Delaware limited liability company, and certain of its private
investor clients. The Operating Partnership contributed
$94.0 million in operating properties, consisting of 24
industrial buildings, aggregating approximately 2.4 million
square feet, to Industrial Fund I, LLC in which it retained
a 15% interest. The Operating Partnership recognized a gain of
$7.4 million on the contribution, representing the gain on
the contributed properties acquired by the third-party investors.

Under the agreements governing the joint
ventures, the Operating Partnership and the other parties to the
joint venture may be required to make additional capital
contributions and, subject to certain limitations, the joint
ventures may incur additional debt.

The Operating Partnership also has a 0.1%
unconsolidated equity interest (with an approximate 33% economic
interest) in AMB Pier One, LLC, a joint venture to redevelop the
Operating Partnerships office space in San Francisco.
The investment is not consolidated because the Operating
Partnership does not exercise significant control over major
operating decisions such as approval of budgets, selection of
property managers, investment activity and changes in financing.
The Operating Partnership has an option to purchase the
remaining equity interest beginning January 1, 2007, and
expiring December 31, 2009, based on the fair market value
as stipulated in the operating agreement.



|    |                  
|--- | -----------------
|12. | Partners Capital

Holders of common limited partnership units of
the Operating Partnership and class B common limited
partnership units of AMB Property II, L.P. have the right,
commencing generally on or after the first anniversary of the
holder becoming a limited partner of the Operating Partnership
or AMB Property II, L.P., as applicable (or such other date
agreed to by the Operating Partnership or AMB Property II,
L.P. and the applicable unit holders), to require the Operating
Partnership or AMB Property II, L.P. to redeem part or all
of their common units or class B common units, as
applicable, for cash (based upon the fair market value, as
defined in the applicable partnership agreement, of an
equivalent number of shares of common stock at the time of
redemption) or the Operating Partnership or AMB
Property II, L.P. may, in its sole and absolute discretion
(subject to the limits on ownership and transfer of common stock
set forth in the Companys charter), elect to have the
Company exchange those common units or class B common
limited partnership units, as applicable, for shares of the
Companys common stock on a one-for-one basis, subject to
adjustment in the event of stock splits, stock dividends,
issuance of certain rights, certain extraordinary distributions
and similar events. With each redemption or exchange of the
Operating Partnerships common units, the Companys
percentage ownership in the Operating Partnership will increase.
Common limited partners and

F-24



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

class B common limited partners may exercise
this redemption right from time to time, in whole or in part,
subject to the limitations that limited partners may not
exercise this right if such exercise would result in any person
actually or constructively owning shares of common stock in
excess of the ownership limit or any other amount specified by
the Companys board of directors, assuming common stock was
issued in the exchange. During 2003, the Operating Partnership
redeemed 226,145 of its common limited partnership units for
cash and 2,000 of its common limited partnership units for
shares of the Companys common stock. In November 2003, AMB
Property II, L.P. issued 145,548 of its class B common
limited partnership units in connection with a property
acquisition. During 2002, the Operating Partnership redeemed
122,640 of its common limited partnership units for shares of
the Companys common stock.

During 2003, the Company repurchased and retired
812,900 shares of its common stock for an aggregate
purchase price of $21.2 million, including commissions and
the Operating Partnership retired the same number of common
general partnership units. During 2002, the Company repurchased
and retired 2,651,600 shares of its common stock for
$69.4 million, including commissions and the Operating
Partnership retired the same number of common general
partnership units. In December 2003, the Companys board of
directors approved a new two-year common stock repurchase
program for the repurchase of up to $200.0 million worth of
common stock.

On November 25, 2003, the Company issued and
sold 2,300,000 shares of 6.75% Series M Cumulative
Redeemable Preferred Stock for $25.00 per share. Dividends
are cumulative from the date of issuance and payable quarterly
in arrears at a rate per share equal to $1.6875 per annum.
The series M preferred stock is redeemable by the Company
on or after November 25, 2008, subject to certain
conditions, for cash at a redemption price equal to
$25.00 per share, plus accumulated and unpaid dividends
thereon, if any, to the redemption date. The Company contributed
the net proceeds of $55.4 million to the Operating
Partnership, and in exchange, the Operating Partnership issued
to the Company 2,300,000 6.75% Series M Cumulative
Redeemable Preferred Units.

On June 23, 2003, the Company issued and
sold 2,000,000 shares of 6.5% Series L Cumulative
Redeemable Preferred Stock for $25.00 per share. Dividends
are cumulative from the date of issuance and payable quarterly
in arrears at a rate per share equal to $1.625 per annum.
The series L preferred stock is redeemable by the Company
on or after June 23, 2008, subject to certain conditions,
for cash at a redemption price equal to $25.00 per share,
plus accumulated and unpaid dividends thereon, if any, to the
redemption date. The Company contributed the net proceeds of
$48.0 million to the Operating Partnership, and in
exchange, the Operating Partnership issued to the Company
2,000,000 6.5% Series L Cumulative Redeemable Preferred
Units. The Operating Partnership used the proceeds, in addition
to proceeds previously contributed to the Operating Partnership
from other equity issuances, to redeem all 3,995,800 shares
of its 8.5% Series A Cumulative Redeemable Preferred Units
from the Company on July 28, 2003. The Company, in turn,
used those proceeds to redeem all 3,995,800 shares of its
8.5% Series A Cumulative Redeemable Preferred Stock for
$100.2 million, including accumulated and unpaid dividends
through the redemption date. During 2003, the Operating
Partnership recognized a reduction of net income available to
common unitholders of $3.7 million for the original
preferred unit issuance costs.

In July 2002, the Company repurchased
4,200 shares of its series A preferred stock for an
aggregate cost of $0.1 million, including accrued and
unpaid dividends and the Operating Partnership retired the same
number of its series A preferred units.

As of December 31, 2003, the Operating
Partnership had outstanding 81,563,502 common general
partnership units, 4,763,790 common limited partnership units,
800,000 7.95% Series J Cumulative Redeemable Partnership
Units, 800,000 7.95% Series K Cumulative Redeemable
Partnership Units, 2,000,000 6.5%

F-25



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Series L Cumulative Redeemable Partnership
Units and 2,300,000 6.75% Series M Cumulative Redeemable
Partnership Units. The following table sets forth the
distributions paid per unit:

|                      |  |                                          |  |      |      |      |  |      |      |  |  |   |      | 
|--------------------- |  | ---------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ---- | 
|Paying Entity         |  | Security                                 |  | 2003 |      | 2002 |  | 2001
|                      |  |                                          |  |      |      |      |  |     
|Operating Partnership |  | Common limited partnership units         |  | $    | 1.66 |      |  | $    | 1.64 |  |  | $ | 1.58 | 
|Operating Partnership |  | Series B preferred units                 |  | $    | 3.71 |      |  | $    | 4.31 |  |  | $ | 4.31 | 
|Operating Partnership |  | Series J preferred units                 |  | $    | 3.98 |      |  | $    | 3.98 |  |  | $ | 1.24 | 
|Operating Partnership |  | Series K preferred units                 |  | $    | 3.98 |      |  | $    | 2.96 |  |  |   | n/a  | 
|Operating Partnership |  | Series L preferred units                 |  | $    | 0.85 |      |  |      | n/a  |  |  |   | n/a  | 
|Operating Partnership |  | Series M preferred units                 |  | $    | 0.17 |      |  |      | n/a  |  |  |   | n/a  | 
|AMB Property II, L.P. |  | Class B common limited partnership units |  | $    | 0.22 |      |  |      | n/a  |  |  |   | n/a  | 
|AMB Property II, L.P. |  | Series C preferred units                 |  |      | n/a  |      |  |      | n/a  |  |  | $ | 3.88 | 
|AMB Property II, L.P. |  | Series D preferred units                 |  | $    | 3.88 |      |  | $    | 3.88 |  |  | $ | 3.88 | 
|AMB Property II, L.P. |  | Series E preferred units                 |  | $    | 3.88 |      |  | $    | 3.88 |  |  | $ | 3.88 | 
|AMB Property II, L.P. |  | Series F preferred units                 |  | $    | 3.98 |      |  | $    | 3.98 |  |  | $ | 3.98 | 
|AMB Property II, L.P. |  | Series G preferred units                 |  |      | n/a  |      |  | $    | 2.14 |  |  | $ | 3.98 | 
|AMB Property II, L.P. |  | Series H preferred units                 |  | $    | 4.06 |      |  | $    | 4.06 |  |  | $ | 4.06 | 
|AMB Property II, L.P. |  | Series I preferred units                 |  | $    | 4.00 |      |  | $    | 4.00 |  |  | $ | 3.04 | 



|    |                                                                     
|--- | --------------------------------------------------------------------
|13. | Stock Incentive Plan, 401(k) Plan and Deferred
    Compensation Plan

Stock Incentive
Plan.The Company and the Operating
Partnership have Stock Option and Incentive Plans (Stock
Incentive Plans) for the purpose of attracting and
retaining eligible officers, directors and employees. When the
Company issues stock options or restricted stock, the Operating
Partnership issues corresponding general partnership units on a
one-for-one basis. The Company has reserved for issuance
18,950,000 shares of common stock under the Stock Incentive
Plans. As of December 31, 2003, the Company had 10,286,057
non-qualified options outstanding granted to certain directors,
officers and employees. Each option is exchangeable for one
share of the Companys common stock. As of
December 31, 2003, the options had a weighted average
exercise price of $23.92 and the exercise prices range from
$18.94 to $30.83. Each options exercise price is equal to
the Companys market price on the date of grant. The
options have an original ten-year term and generally vest pro
rata in annual installments over a three- to five-year period
from the date of grant.

In 2002, the Operating Partnership adopted the
expense recognition provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. The Operating
Partnership values stock options issued by the Company, its
general partner, using the Black-Scholes option-pricing model
and recognizes this value as an expense over the period in which
the options vest. Under this standard, recognition of expense
for stock options is applied to all options granted after the
beginning of the year of adoption. Prior to 2002, the Operating
Partnership followed the intrinsic method set forth in APB
Opinion 25, Accounting for Stock Issued to
Employees. In accordance with SFAS No. 123, the
Operating Partnership will recognize the associated expense over
the three to five-year vesting periods. Under
SFAS No. 123, related stock-based compensation expense
was $2.4 million and $0.9 million for the years ended
December 31, 2003 and 2002, respectively. The expense is
included in general and administrative expenses in the
accompanying consolidated statements of operations. The adoption
of SFAS No. 123 is prospective and the 2002 and 2003
expense relates only to stock options granted in 2002 and
subsequent periods. Prior to January 1, 2002, the Operating
Partnership applied APB Opinion No. 25, Accounting
for Stock Issued to Employees and related interpretations
in accounting for its Stock Incentive Plan. Opinion 25 measures
compensation cost using the intrinsic value based method of
accounting. Under this method, compensation cost is the excess,
if any, of the quoted market price of the stock

F-26



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

at the date of grant over the amount an employee
must pay to acquire the stock. Accordingly, no compensation cost
had been recognized for the Companys Stock Incentive Plan
as of December 31, 2001.

As permitted by SFAS No. 148,
Accounting for Stock-based Compensation 
Transition and Disclosure  An Amendment of FASB
Statement No. 123, the Operating Partnership has
changed its method of accounting for stock options beginning
January 1, 2002. The Operating Partnership has not
retroactively changed its method of accounting for stock options
but has provided additional required disclosures. Had
compensation cost for the Companys stock-based
compensation plans been determined based on the fair value at
the grant dates for awards prior to 2002 consistent with the
method of SFAS No. 123, the Operating
Partnerships pro forma net income available to common
unitholders would have been reduced by $1.6 million,
$2.4 million and $3.9 million and pro forma basic and
diluted earnings per unit would have been reduced to $1.42
(restated) and $1.39 (restated); $1.33 (restated) and
$1.30 (restated); and $1.38 (restated) and $1.36
(restated), respectively, for the years ended December 31,
2003, 2002 and 2001.

The fair value of each option grant was estimated
at the date of grant using the Black-Scholes option-pricing
model with the following assumptions used for grants in 2003,
2002 and 2001, respectively: dividend yields of 6.1%, 5.9% and
6.4%; expected volatility of 17.7%, 13.3% and 14.9%; risk-free
interest rates of 3.4%, 4.0% and 5.2%; and expected lives of
seven, seven and 10 years.

Following is a summary of the option activity for
the years ended December 31 (options in thousands):

|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|--------------------------------------------- |  | ------------ | --------- | ---------------- |  | ------------------- | ----- |  |  |  | ----- | 
|                                              |  | Shares Under |           | Weighted Average |  | Options Exercisable
|                                              |  | Option       |           | Exercise Price   |  | at Year End        
|                                              |  |              |           |                  |  |                    
|Outstanding as of December 31, 2000           |  |              | 5,767     |                  |  | $                   | 20.83 |  |  |  | 3,326 | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Granted                                       |  |              | 1,924     |                  |  |                     | 24.61 |  |  |  |       | 
|Exercised                                     |  |              | (202      | )                |  |                     | 21.15 |  |  |  |       | 
|Forfeited                                     |  |              | (52       | )                |  |                     | 22.45 |  |  |  |       | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Outstanding as of December 31, 2001           |  |              | 7,437     |                  |  |                     | 22.16 |  |  |  | 4,623 | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Granted                                       |  |              | 1,990     |                  |  |                     | 26.48 |  |  |  |       | 
|Exercised                                     |  |              | (566      | )                |  |                     | 21.41 |  |  |  |       | 
|Forfeited                                     |  |              | (96       | )                |  |                     | 24.48 |  |  |  |       | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Outstanding as of December 31, 2002           |  |              | 8,765     |                  |  |                     | 23.16 |  |  |  | 5,526 | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Granted                                       |  |              | 1,854     |                  |  |                     | 27.18 |  |  |  |       | 
|Exercised                                     |  |              | (318      | )                |  |                     | 21.94 |  |  |  |       | 
|Forfeited                                     |  |              | (15       | )                |  |                     | 25.67 |  |  |  |       | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Outstanding as of December 31, 2003           |  |              | 10,286    |                  |  | $                   | 23.92 |  |  |  | 7,210 | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Remaining average contractual life            |  |              | 6.7 years |                  |  |                     |       |  |  |  |       | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 
|Fair value of options granted during the year |  | $            | 2.04      |                  |  |                     |       |  |  |  |       | 
|                                              |  |              |           |                  |  |                     |       |  |  |  |       | 

In 2003, 2002 and 2001, the Company issued
272,620, 204,072 and 238,790 restricted shares, respectively, to
certain officers of the Company as part of the performance pay
program and in connection with employment with the Company. As
of December 31, 2003, 52,209 shares of restricted
stock have been forfeited. The 974,222 outstanding restricted
shares are subject to repurchase rights, which generally lapse
over a period from three to five years.

401(k) Plan.In
November 1997, the Company and the Operating Partnership
established a Section 401(k) Savings/ Retirement Plan (the
401(k) Plan), which is a continuation of the 401(k)
Plan of the

F-27



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

predecessor, to cover eligible employees of the
Operating Partnership and any designated affiliates. During 2003
and 2002, the 401(k) Plan permitted eligible employees of the
Operating Partnership to defer up to 20% of their annual
compensation, subject to certain limitations imposed by the
Code. The employees elective deferrals are immediately
vested and non-forfeitable upon contribution to the 401(k) Plan.
During 2003 and 2002, the Operating Partnership matched employee
contributions to the 401(k) Plan in an amount equal to 50% of
the first 5.5% of annual compensation deferred by each employee.
The Operating Partnership may also make discretionary
contributions to the 401(k) Plan. In 2003 and 2002, the
Operating Partnership paid $0.4 million and
$0.4 million, respectively, for its 401(k) match. No
discretionary contributions were made by the Operating
Partnership to the 401(k) Plan in 2003, 2002 and 2001.

Deferred Compensation
Plan.Effective September 1,
1999, the Company and the Operating Partnership established a
non-qualified deferred compensation plan for officers of the
Company and certain of its affiliates. As of January 1,
2002, the plan enables participants to defer income up to 100%
of annual base pay and up to 100% of annual bonuses on a pre-tax
basis. The Operating Partnership may make discretionary matching
contributions to participant accounts at any time. The Operating
Partnership made no such discretionary matching contributions in
2003, 2002 or 2001. The participants elective deferrals
and any matching contributions are immediately 100% vested. As
of December 31, 2003 and 2002, the total amount of
compensation deferred was $6.5 million and
$2.9 million, respectively.



|    |                
|--- | ---------------
|14. | Income Per Unit

When the Company issues stock options or
restricted stock, the Operating Partnership issues corresponding
general partnership units on a one-for-one basis. The Operating
Partnerships only dilutive securities outstanding for the
years ended December 31, 2003, 2002 and 2001 were stock
options and restricted stock granted under the Stock Incentive
Plans. The effect on income per unit was to increase weighted
average units outstanding. Such dilution was computed using the
treasury stock method.

|                              |                                    |                                       |  |            |            |      |  |            |            |  |  |            |            | 
|----------------------------- | ---------------------------------- | ------------------------------------- |  | ---------- | ---------- | ---- |  | ---------- | ---------- |  |  | ---------- | ---------- | 
|                              |                                    | 2003                                  |  | 2002       |            | 2001
|                              |                                    |                                       |  |            |            |     
|WEIGHTED AVERAGE COMMON UNITS |                                    |                                       |  |            |            |      |  |            |            |  |  |           
|                              | Basic                              |                                       |  | 85,859,899 |            |      |  | 88,204,208 |            |  |  | 89,286,379 |           
|                              | Stock options and restricted stock |                                       |  | 1,756,466  |            |      |  | 1,485,102  |            |  |  | 1,039,422  |           
|                              |                                    |                                       |  |            |            |      |  |            |            |  |  |           
|                              |                                    | Diluted weighted average common units |  |            | 87,616,365 |      |  |            | 89,689,310 |  |  |            | 90,325,801 | 
|                              |                                    |                                       |  |            |            |      |  |            |            |  |  |           



|    |                              
|--- | -----------------------------
|15. | Commitments and Contingencies



| |            
| | -----------
| | Commitments

Lease Commitments.The Operating Partnership holds operating ground leases on land
parcels at its on-tarmac facilities, leases on office spaces for
corporate use, and a leasehold interest that it holds for
investment purposes. The remaining lease terms are from one to
37 years. Operating lease payments are being amortized

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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

ratably over the terms of the related leases.
Future minimum rental payments required under non-cancelable
operating leases in effect as of December 31, 2003, were as
follows (dollars in thousands):

|           |       |   |         |         | 
|---------- | ----- | - | ------- | ------- | 
|2004       |       | $ | 20,149  |        
|2005       |       |   | 20,272  |        
|2006       |       |   | 20,922  |        
|2007       |       |   | 21,120  |        
|2008       |       |   | 21,340  |        
|Thereafter |       |   | 283,965 |        
|           |       |   |         |        
|           | Total |   | $       | 387,768 | 
|           |       |   |         |        

Standby Letters of
Credit.As of December 31, 2003,
the Operating Partnership had provided approximately
$64.1 million in letters of credit, of which
$52.7 million was provided under the Operating
Partnerships $500.0 million unsecured credit
facility. The letters of credit were required to be issued under
certain ground lease provisions, bank guarantees and other
commitments.

Guarantees.Other
than disclosed elsewhere in this report, as of December 31,
2003, the Company and the Operating Partnership had outstanding
guarantees in the aggregate amount of $50.2 million in
connection with certain acquisitions, which are currently
expected to close in 2004.

Performance and Surety
Bonds.As of December 31, 2003,
the Operating Partnership had outstanding performance and surety
bonds in an aggregate amount of $0.9 million. These bonds
were issued in connection with certain of its development
projects and were posted to guarantee certain tax obligations
and the construction of certain real property improvements and
infrastructure, such as grading, sewers and streets. Performance
and surety bonds are commonly required by public agencies from
real estate developers. Performance and surety bonds are
renewable and expire upon the payment of the taxes due or the
completion of the improvements and infrastructure.

Promoted Interests and Other Contractual
Obligations.Upon the achievement of
certain return thresholds and the occurrence of certain events,
the Operating Partnership may be obligated to make payments to
certain of joint venture partners pursuant to the terms and
provisions of their contractual agreements with the Operating
Partnership. From time to time in the normal course of the
Operating Partnerships business, the Operating Partnership
enters into various contracts with third parties that may
obligate it to make payments or perform other obligations upon
the occurrence of certain events.

Contingencies

Litigation.In the
normal course of business, from time to time, the Operating
Partnership may be involved in legal actions relating to the
ownership and operations of its properties. Management does not
expect that the liabilities, if any, that may ultimately result
from such legal actions will have a material adverse effect on
the consolidated financial position, results of operations or
cash flows of the Operating Partnership.

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

F-29



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

General Uninsured
Losses.The Operating Partnership
carries property and rental loss, liability, flood,
environmental and terrorism insurance. The Operating Partnership
believes that the policy terms and conditions, limits and
deductibles are adequate and appropriate under the
circumstances, given the relative risk of loss, the cost of such
coverage and industry practice. In addition, certain of the
Operating Partnerships properties are located in areas
that are subject to earthquake activity; therefore, the
Operating Partnership has obtained limited earthquake insurance
on those properties. There are, however, certain types of
extraordinary losses, such as those due to acts of war that may
be either uninsurable or not economically insurable. Although we
have obtained coverage for certain acts of terrorism, with
policy specifications and insured limits that we believe are
commercially reasonable, it is not certain that we will be able
to collect under such policies. Should an uninsured loss occur,
the Operating Partnership could lose its investment in, and
anticipated profits and cash flows from, a property.

Captive Insurance
Company.In December 2001, the
Operating Partnership formed a wholly-owned captive insurance
company, Arcata National Insurance Ltd. (Arcata),
which provides insurance coverage for all or a portion of losses
below the deductible under the Operating Partnerships
third-party policies. The Operating Partnership capitalized
Arcata in accordance with the applicable regulatory
requirements. Arcata established annual premiums based on
projections derived from the past loss experience at the
Operating Partnerships properties. Annually, the Operating
Partnership engages an independent third party to perform an
actuarial estimate of future projected claims, related
deductibles and projected expenses necessary to fund associated
risk management programs. Premiums paid to Arcata may be
adjusted based on this estimate. Premiums paid to Arcata have a
retrospective component, so that if expenses, including losses
and deductibles, are less than premiums collected, the excess
may be returned to the property owners (and, in turn, as
appropriate, to the customers) and conversely, subject to
certain limitations, if expenses, including losses, are greater
than premiums collected, an additional premium will be charged.
As with all recoverable expenses, differences between estimated
and actual insurance premiums will be recognized in the
subsequent year. Through this structure, the Operating
Partnership believes that it has more comprehensive insurance
coverage at an overall lower cost than would otherwise be
available in the market.

F-30



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                                     
|--- | ------------------------------------
|16. | Quarterly Financial Data (Unaudited)

Selected quarterly financial results for 2003 and
2002 were as follows (dollars in thousands, except unit and per
unit amounts):

|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |            |         | 
|---------------------------------------------------------------- | --------------------------------- | ------------------------------------------ | ------- | ---------- | ------ | ------------ | ------- | ----------- | ------ | ---------- | ------- | ---------- | ------ | - | ------- | ---------- | ------ | - | ------- | ---------- | ------- | 
|                                                                 |                                   |                                            |         |           
|                                                                 |                                   | Quarter (unaudited)(1)                     |         |           
|                                                                 |                                   |                                            |         |           
|2003                                                             |                                   | March 31                                   |         | June 30    |        | September 30 |         | December 31 |        | Year      
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |           
|                                                                 |                                   | (Restated)                                 |         | (Restated) |        | (Restated)   |         | (Restated)  |        | (Restated)
|Total revenues                                                   |                                   | $                                          | 150,994 |            |        | $            | 149,892 |             |        | $          | 150,167 |            |        | $ | 163,984 |            |        | $ | 615,037 |           
|Income before minority interests and discontinued
    operations |                                   |                                            | 37,543  |            |        |              | 27,378  |             |        |            | 38,659  |            |        |   | 44,804  |            |        |   | 148,384 |           
|Total minority interests share of income                        |                                   |                                            | (10,826 | )          |        |              | (11,749 | )           |        |            | (16,544 | )          |        |   | (16,544 | )          |        |   | (55,663 | )         
|Income from continuing operations                                |                                   |                                            | 26,717  |            |        |              | 15,629  |             |        |            | 22,115  |            |        |   | 28,260  |            |        |   | 92,721  |           
|Total discontinued operations                                    |                                   |                                            | 37,837  |            |        |              | 5,164   |             |        |            | 7,729   |            |        |   | 3,662   |            |        |   | 54,392  |           
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Net income                        |                                            |         | 64,554     |        |              |         | 20,793      |        |            |         | 29,844     |        |   |         | 31,922     |        |   |         | 147,113    |        
|Preferred unit distributions                                     |                                   |                                            | (5,115  | )          |        |              | (5,186  | )           |        |            | (4,462  | )          |        |   | (3,424  | )          |        |   | (18,187 | )         
|Preferred unit redemption discount/(issuance
    costs)          |                                   |                                            |        |            |        |              |        |             |        |            | (3,671  | )          |        |   | (1,742  | )          |        |   | (5,413  | )         
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 |                                   | Net income available to common unitholders |         | $          | 59,439 |              |         | $           | 15,607 |            |         | $          | 21,711 |   |         | $          | 26,756 |   |         | $          | 123,513 | 
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|Basic income per common unit(2)                                  |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Income from continuing operations |                                            | $       | 0.25       |        |              | $       | 0.12        |        |            | $       | 0.16       |        |   | $       | 0.28       |        |   | $       | 0.81       |        
|                                                                 | Discontinued operations           |                                            |         | 0.44       |        |              |         | 0.06        |        |            |         | 0.09       |        |   |         | 0.04       |        |   |         | 0.63       |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 |                                   | Net income available to common unitholders |         | $          | 0.69   |              |         | $           | 0.18   |            |         | $          | 0.25   |   |         | $          | 0.32   |   |         | $          | 1.44    | 
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|Diluted income per common unit(2)                                |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Income from continuing operations |                                            | $       | 0.25       |        |              | $       | 0.12        |        |            | $       | 0.16       |        |   | $       | 0.26       |        |   | $       | 0.79       |        
|                                                                 | Discontinued operations           |                                            |         | 0.43       |        |              |         | 0.06        |        |            | $       | 0.09       |        |   |         | 0.04       |        |   |         | 0.62       |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 |                                   | Net income available to common unitholders |         | $          | 0.68   |              |         | $           | 0.18   |            |         | $          | 0.25   |   |         | $          | 0.30   |   |         | $          | 1.41    | 
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|WEIGHTED AVERAGE COMMON UNITS OUTSTANDING                        |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Basic                             |                                            |         | 85,944,112 |        |              |         | 85,852,418  |        |            |         | 85,776,261 |        |   |         | 85,858,038 |        |   |         | 85,859,899 |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Diluted                           |                                            |         | 87,360,543 |        |              |         | 87,302,896  |        |            |         | 87,399,544 |        |   |         | 88,360,432 |        |   |         | 87,616,365 |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           



---



|    |                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Certain reclassifications have been made to the
    quarterly data to conform with the annual presentation with no
    net effect to net income or net income available to common
    unitholders.
|   
|(2) | The sum of quarterly financial data may vary from
    the annual data due to rounding.                                                                                                            

F-31



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |            |         | 
|---------------------------------------------------------------- | --------------------------------- | ------------------------------------------ | ------- | ---------- | ------ | ------------ | ------- | ----------- | ------ | ---------- | ------- | ---------- | ------ | - | ------- | ---------- | ------ | - | ------- | ---------- | ------- | 
|                                                                 |                                   |                                            |         |           
|                                                                 |                                   | Quarter (unaudited)(1)                     |         |           
|                                                                 |                                   |                                            |         |           
|2002                                                             |                                   | March 31                                   |         | June 30    |        | September 30 |         | December 31 |        | Year      
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |           
|                                                                 |                                   | (Restated)                                 |         | (Restated) |        | (Restated)   |         | (Restated)  |        | (Restated)
|Total revenues                                                   |                                   | $                                          | 141,258 |            |        | $            | 141,574 |             |        | $          | 149,102 |            |        | $ | 157,748 |            |        | $ | 589,682 |           
|Income before minority interests and discontinued
    operations |                                   |                                            | 38,370  |            |        |              | 38,007  |             |        |            | 33,690  |            |        |   | 32,102  |            |        |   | 142,169 |           
|Total minority interests share of income                        |                                   |                                            | (11,001 | )          |        |              | (10,546 | )           |        |            | (12,061 | )          |        |   | (9,110  | )          |        |   | (42,718 | )         
|Income from continuing operations                                |                                   |                                            | 27,369  |            |        |              | 27,461  |             |        |            | 21,629  |            |        |   | 22,992  |            |        |   | 99,451  |           
|Total discontinued operations                                    |                                   |                                            | 6,645   |            |        |              | 5,329   |             |        |            | 8,700   |            |        |   | 18,929  |            |        |   | 39,603  |           
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Net income                        |                                            |         | 34,014     |        |              |         | 32,790      |        |            |         | 30,329     |        |   |         | 41,921     |        |   |         | 139,054    |        
|Preferred unit distributions                                     |                                   |                                            | (4,445  | )          |        |              | (5,098  | )           |        |            | (5,115  | )          |        |   | (5,114  | )          |        |   | (19,772 | )         
|Preferred unit redemption discount/(issuance
    costs)          |                                   |                                            |        |            |        |              |        |             |        |            | 412     |            |        |   |        |            |        |   | 412     |           
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 |                                   | Net income available to common unitholders |         | $          | 29,569 |              |         | $           | 27,692 |            |         | $          | 25,626 |   |         | $          | 36,807 |   |         | $          | 119,694 | 
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|Basic income per common unit(2)                                  |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Income from continuing operations |                                            | $       | 0.27       |        |              | $       | 0.25        |        |            | $       | 0.19       |        |   | $       | 0.20       |        |   | $       | 0.91       |        
|                                                                 | Discontinued operations           |                                            |         | 0.07       |        |              |         | 0.06        |        |            |         | 0.10       |        |   |         | 0.22       |        |   |         | 0.45       |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 |                                   | Net income available to common unitholders |         | $          | 0.34   |              |         | $           | 0.31   |            |         | $          | 0.29   |   |         | $          | 0.42   |   |         | $          | 1.36    | 
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|Diluted income per common unit(2)                                |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Income from continuing operations |                                            | $       | 0.26       |        |              | $       | 0.25        |        |            | $       | 0.18       |        |   | $       | 0.20       |        |   | $       | 0.89       |        
|                                                                 | Discontinued operations           |                                            |         | 0.07       |        |              |         | 0.06        |        |            |         | 0.10       |        |   |         | 0.21       |        |   |         | 0.44       |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 |                                   | Net income available to common unitholders |         | $          | 0.33   |              |         | $           | 0.31   |            |         | $          | 0.28   |   |         | $          | 0.41   |   |         | $          | 1.33    | 
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|WEIGHTED AVERAGE COMMON UNITS OUTSTANDING                        |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Basic                             |                                            |         | 88,262,128 |        |              |         | 88,643,124  |        |            |         | 88,575,091 |        |   |         | 87,136,382 |        |   |         | 88,204,208 |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           
|                                                                 | Diluted                           |                                            |         | 89,724,953 |        |              |         | 90,462,332  |        |            |         | 90,379,023 |        |   |         | 88,495,159 |        |   |         | 89,689,310 |        
|                                                                 |                                   |                                            |         |            |        |              |         |             |        |            |         |            |        |   |         |            |        |   |         |           



---



|    |                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Certain reclassifications have been made to the
    quarterly data to conform with the annual presentation with no
    net effect to net income or net income available to common
    unitholders.
|   
|(2) | The sum of quarterly financial data may vary from
    the annual data due to rounding.                                                                                                            



|    |                    
|--- | -------------------
|17. | Segment Information

The Operating Partnership mainly operates
industrial properties and manages its business by markets.
Industrial properties represent more than 98% of the Operating
Partnerships portfolio by rentable square feet and consist
primarily of warehouse distribution facilities suitable for
single or multiple customers and are

F-32



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

typically comprised of multiple buildings that
are leased to customers engaged in various types of businesses.
The Operating Partnerships geographic markets for
industrial properties are managed separately because each market
requires different operating, pricing and leasing strategies.
The remaining 2% of the Operating Partnerships portfolio
is comprised of retail and other properties located in Southeast
Florida, Atlanta, Boston and Baltimore. The Operating
Partnership does not separately manage its retail operations by
market. Retail properties are generally leased to one or more
anchor customers, such as grocery and drug stores, and various
retail businesses. The accounting policies of the segments are
the same as those described in the summary of significant
accounting policies. The Operating Partnership evaluates
performance based upon property net operating income of the
combined properties in each segment.

The industrial domestic target markets category
includes Austin, Baltimore/ Washington D.C., Boston and
Minneapolis. The industrial domestic non-target markets category
captures all of the Operating Partnerships other
U.S. markets, except for those markets listed individually
in the table. The international target markets category includes
France, Germany, Japan an Mexico. Summary information for the
reportable segments is as follows (dollars in thousands):

|                                             |                               |                                       |         |                 |         |      |         |         |         |      |         |         |         |  |         |        |         |  |         |         |         |  |         |        |         | 
|-------------------------------------------- | ----------------------------- | ------------------------------------- | ------- | --------------- | ------- | ---- | ------- | ------- | ------- | ---- | ------- | ------- | ------- |  | ------- | ------ | ------- |  | ------- | ------- | ------- |  | ------- | ------ | ------- | 
|                                             |                               |                                       |         |                
|                                             |                               | Rental Revenues                       |         | Property NOI(1)
|                                             |                               |                                       |         |                
|Segments                                     |                               | 2003                                  |         | 2002            |         | 2001 |         | 2003    |         | 2002 |         | 2001   
|                                             |                               |                                       |         |                 |         |      |         |         |         |      |         |        
|Industrial domestic hub and gateway markets: |                               |                                       |         |                 |         |      |         |         |         |      |         |         |         |  |         |        |         |  |         |         |         |  |         |       
|                                             | Atlanta                       |                                       | $       | 29,080          |         |      | $       | 30,444  |         |      | $       | 28,264  |         |  | $       | 23,048 |         |  | $       | 23,970  |         |  | $       | 22,722 |        
|                                             | Chicago                       |                                       |         | 43,837          |         |      |         | 45,114  |         |      |         | 40,997  |         |  |         | 29,934 |         |  |         | 31,446  |         |  |         | 28,213 |        
|                                             | Dallas/ Fort Worth            |                                       |         | 17,015          |         |      |         | 26,697  |         |      |         | 25,210  |         |  |         | 11,457 |         |  |         | 18,915  |         |  |         | 17,641 |        
|                                             | Los Angeles                   |                                       |         | 94,025          |         |      |         | 77,700  |         |      |         | 61,620  |         |  |         | 74,633 |         |  |         | 61,250  |         |  |         | 49,095 |        
|                                             | Northern New Jersey/ New York |                                       |         | 52,709          |         |      |         | 47,422  |         |      |         | 44,924  |         |  |         | 34,735 |         |  |         | 31,845  |         |  |         | 31,648 |        
|                                             | San Francisco Bay Area        |                                       |         | 109,819         |         |      |         | 129,858 |         |      |         | 106,202 |         |  |         | 90,008 |         |  |         | 109,000 |         |  |         | 88,898 |        
|                                             | Miami                         |                                       |         | 32,902          |         |      |         | 35,164  |         |      |         | 33,176  |         |  |         | 23,308 |         |  |         | 25,516  |         |  |         | 24,366 |        
|                                             | Seattle                       |                                       |         | 31,813          |         |      |         | 25,656  |         |      |         | 23,215  |         |  |         | 24,863 |         |  |         | 20,394  |         |  |         | 18,620 |        
|                                             | On-Tarmac                     |                                       |         | 48,909          |         |      |         | 30,617  |         |      |         | 19,558  |         |  |         | 26,639 |         |  |         | 17,161  |         |  |         | 11,282 |        
|                                             |                               |                                       |         |                 |         |      |         |         |         |      |         |         |         |  |         |        |         |  |         |         |         |  |         |       
|                                             |                               | Total industrial domestic hub markets |         |                 | 460,109 |      |         |         | 448,672 |      |         |         | 383,166 |  |         |        | 338,625 |  |         |         | 339,497 |  |         |        | 292,485 | 
|Total industrial domestic target markets     |                               |                                       | 103,070 |                 |         |      | 104,595 |         |         |      | 101,032 |         |         |  | 74,178  |        |         |  | 75,567  |         |         |  | 73,504  |       
|Total industrial domestic non-target markets |                               |                                       | 28,809  |                 |         |      | 46,932  |         |         |      | 49,454  |         |         |  | 21,000  |        |         |  | 35,235  |         |         |  | 38,111  |       
|International target markets                 |                               |                                       | 6,101   |                 |         |      | 739     |         |         |      |        |         |         |  | 5,697   |        |         |  | 686     |         |         |  |        |       
|Straight-line rents                          |                               |                                       | 10,662  |                 |         |      | 11,013  |         |         |      | 10,093  |         |         |  | 10,662  |        |         |  | 11,013  |         |         |  | 10,093  |       
|Total retail and other markets               |                               |                                       | 12,390  |                 |         |      | 16,896  |         |         |      | 24,321  |         |         |  | 7,541   |        |         |  | 10,597  |         |         |  | 15,677  |       
|Discontinued operations                      |                               |                                       | (19,441 | )               |         |      | (50,358 | )       |         |      | (44,772 | )       |         |  | (15,910 | )      |         |  | (38,235 | )       |         |  | (32,918 | )     
|                                             |                               |                                       |         |                 |         |      |         |         |         |      |         |         |         |  |         |        |         |  |         |         |         |  |         |       
|                                             |                               | Total                                 |         | $               | 601,700 |      |         | $       | 578,489 |      |         | $       | 523,294 |  |         | $      | 441,793 |  |         | $       | 434,360 |  |         | $      | 396,952 | 
|                                             |                               |                                       |         |                 |         |      |         |         |         |      |         |         |         |  |         |        |         |  |         |         |         |  |         |       



---



|    |                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Property net operating income (NOI) is
    defined as rental revenue, including reimbursements, less
    property operating expenses, which excludes depreciation,
    amortization, general and administrative expenses and interest
    expense. For a reconciliation of NOI to net income, see the
    table below.

The Operating Partnership considers NOI to be an
appropriate supplemental performance measure because NOI
reflects the operating performance of the Operating
Partnerships real estate portfolio on a segment basis and
the Operating Partnership uses NOI to make decisions about
resource allocations and to

F-33



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##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

assess regional property level performance.
However, NOI should not be viewed as an alternative measure of
the Operating Partnerships financial performance since it
does not reflect general and administrative expenses, interest
expense, depreciation and amortization costs, capital
expenditures and leasing costs, or trends in development and
construction activities that could materially impact the
Operating Partnerships results from operations. Further,
the Operating Partnerships NOI may not be comparable to
that of other real estate investment trusts, as they may use
different methodologies for calculating NOI. The following table
is a reconciliation from NOI to reported net income:

|                                                        |            |            |          |            |  |            |          |         |  |   |          |         | 
|------------------------------------------------------- | ---------- | ---------- | -------- | ---------- |  | ---------- | -------- | ------- |  | - | -------- | ------- | 
|                                                        |            | 2003       |          | 2002       |  | 2001      
|                                                        |            |            |          |            |  |           
|                                                        |            | (Restated) |          | (Restated) |  | (Restated)
|Property NOI                                            |            | $          | 441,793  |            |  | $          | 434,360  |         |  | $ | 396,952  |        
|Private capital income                                  |            |            | 13,337   |            |  |            | 11,193   |         |  |   | 10,972   |        
|Depreciation and amortization                           |            |            | (138,956 | )          |  |            | (126,916 | )       |  |   | (105,694 | )      
|Impairment losses                                       |            |            | (5,251   | )          |  |            | (2,846   | )       |  |   | (18,600  | )      
|General and administrative                              |            |            | (47,729  | )          |  |            | (47,207  | )       |  |   | (35,820  | )      
|Equity in earnings of unconsolidated joint
    ventures |            |            | 5,445    |            |  |            | 5,674    |         |  |   | 5,467    |        
|Interest and other income                               |            |            | 4,648    |            |  |            | 10,460   |         |  |   | 16,340   |        
|Gains from dispositions of real estate                  |            |            | 7,429    |            |  |            | 2,480    |         |  |   | 41,859   |        
|Development profits, net of taxes                       |            |            | 14,441   |            |  |            | 1,171    |         |  |   | 17,276   |        
|Loss on investments in other companies                  |            |            |         |            |  |            |         |         |  |   | (20,758  | )      
|Interest, including amortization                        |            |            | (146,773 | )          |  |            | (146,200 | )       |  |   | (124,833 | )      
|Total minority interests share of income               |            |            | (55,663  | )          |  |            | (42,718  | )       |  |   | (52,017  | )      
|Total discontinued operations                           |            |            | 54,392   |            |  |            | 39,603   |         |  |   | 19,128   |        
|                                                        |            |            |          |            |  |            |          |         |  |   |          |        
|                                                        | Net income |            | $        | 147,113    |  |            | $        | 139,054 |  |   | $        | 150,272 | 
|                                                        |            |            |          |            |  |            |          |         |  |   |          |        

The Operating Partnerships gross investment
in real estate by market as of December 31 was:

|                                                 |                               |                                       |         |                   |           |  |         |         |           | 
|------------------------------------------------ | ----------------------------- | ------------------------------------- | ------- | ----------------- | --------- |  | ------- | ------- | --------- | 
|                                                 |                               |                                      
|                                                 |                               | Total Gross Investment as of         
|                                                 |                               |                                      
|                                                 |                               | December 31, 2003                     |         | December 31, 2002
|                                                 |                               |                                       |         |                  
|Industrial domestic hub and gateway markets:     |                               |                                       |         |                   |           |  |         |        
|                                                 | Atlanta                       |                                       | $       | 275,810           |           |  | $       | 280,006 |          
|                                                 | Chicago                       |                                       |         | 381,364           |           |  |         | 356,985 |          
|                                                 | Dallas/ Fort Worth            |                                       |         | 152,661           |           |  |         | 126,472 |          
|                                                 | Los Angeles                   |                                       |         | 854,896           |           |  |         | 741,601 |          
|                                                 | Northern New Jersey/ New York |                                       |         | 516,712           |           |  |         | 486,644 |          
|                                                 | San Francisco Bay Area        |                                       |         | 862,173           |           |  |         | 797,692 |          
|                                                 | Miami                         |                                       |         | 329,107           |           |  |         | 302,691 |          
|                                                 | Seattle                       |                                       |         | 393,160           |           |  |         | 249,500 |          
|                                                 | On-Tarmac                     |                                       |         | 262,046           |           |  |         | 216,357 |          
|                                                 |                               |                                       |         |                   |           |  |         |        
|                                                 |                               | Total industrial domestic hub markets |         |                   | 4,027,929 |  |         |         | 3,557,948 | 
|Total industrial domestic target markets         |                               |                                       | 764,097 |                   |           |  | 777,541 |        
|Industrial domestic non-target markets and other |                               |                                       | 290,982 |                   |           |  | 320,231 |        
|International target markets                     |                               |                                       | 160,974 |                   |           |  | 73,728  |        
|Total retail and other markets                   |                               |                                       | 48,097  |                   |           |  | 60,844  |        

F-34



---



##### Table of Contents



AMB PROPERTY, L.P.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                         |                                 |                              |         |                   |  |  |         |           | 
|------------------------ | ------------------------------- | ---------------------------- | ------- | ----------------- |  |  | ------- | --------- | 
|                         |                                 |                             
|                         |                                 | Total Gross Investment as of
|                         |                                 |                             
|                         |                                 | December 31, 2003            |         | December 31, 2002
|                         |                                 |                              |         |                  
|Construction in progress |                                 |                              | 199,628 |                   |  |  | 132,490 |          
|                         |                                 |                              |         |                   |  |  |         |          
|                         | Total investments in properties |                              | $       | 5,491,707         |  |  | $       | 4,922,782 | 
|                         |                                 |                              |         |                   |  |  |         |          

The following table is a reconciliation from
gross investment in real estate by market to total assets:

|                                                                |                                           |                                |              |            |           |           |           |          |           |           | 
|--------------------------------------------------------------- | ----------------------------------------- | ------------------------------ | ------------ | ---------- | --------- | --------- | --------- | -------- | --------- | --------- | 
|                                                                |                                           | 2003                           |              | 2002      
|                                                                |                                           |                                |              |           
|                                                                |                                           | (Restated)                     |              | (Restated)
|Total investments in properties                                 |                                           | $                              | 5,491,707    |            |           | $         | 4,922,782 |         
|                                                                | Accumulated depreciation and amortization |                                |              | (485,559   | )         |           |           | (368,205 | )        
|                                                                |                                           |                                |              |            |           |           |           |         
|                                                                |                                           | Net investments in properties  |              |            | 5,006,148 |           |           |          | 4,554,577 |          
|Investments in unconsolidated joint ventures                    |                                           |                                | 52,009       |            |           |           | 64,428    |         
|Properties held for divestiture, net                            |                                           |                                | 11,751       |            |           |           | 107,871   |         
|                                                                |                                           |                                |              |            |           |           |           |         
|                                                                |                                           | Net investments in real estate |              |            | 5,069,908 |           |           |          | 4,726,876 |          
|Cash and cash equivalents                                       |                                           |                                | 127,678      |            |           |           | 89,332    |         
|Restricted cash                                                 |                                           |                                | 28,985       |            |           |           | 27,882    |         
|Mortgages receivable                                            |                                           |                                | 43,145       |            |           |           | 13,133    |         
|Accounts receivable, net of allowance for
    doubtful accounts |                                           |                                | 88,452       |            |           |           | 74,207    |         
|Other assets                                                    |                                           |                                | 51,391       |            |           |           | 52,199    |         
|                                                                |                                           |                                |              |            |           |           |           |         
|                                                                |                                           |                                | Total assets |            | $         | 5,409,559 |           |          | $         | 4,983,629 | 
|                                                                |                                           |                                |              |            |           |           |           |         

F-35



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

ON FINANCIAL STATEMENT SCHEDULES


To the Partners of

AMB Property, L.P.:


Our audits of the consolidated financial
statements referred to in our report dated February 13,
2004, except for Note 2, as to which the date is
November 8, 2004, appearing on page F-1 in this Annual
Report on Amendment No. 2 to Form 10-K, also included
an audit of the financial statement schedules listed in
Item 15(a)(2) of this Amendment No. 2 to
Form 10-K. In our opinion, these financial statements
schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.

PricewaterhouseCoopers LLP

San Francisco, California

November 8, 2004


S-1



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                      |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|------------------------------------- |  | -------------------------------------------------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                      |  |                                                    |    |          |  |      |    |              |  |                         |     |             
|                                      |  |                                                    |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                      |  | No. of                                             |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                      |  | Bldgs./                                            |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                              |  | Ctrs.                                              |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                      |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |               
|                                      |  |                                                   
|                                      |  | (In thousands, except number of buildings/centers)
|Atlanta                               |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|Airport Plaza                         |  |                                                    | 3  |          |  |      | GA |              |  |                         | IND |              |  | $              | 4,444  |  |  | $ | 1,811  |  |  | $ | 5,093  |  |  | $ | 29     | 
|Airport South Business Park           |  |                                                    | 7  |          |  |      | GA |              |  |                         | IND |              |  |                | 17,077 |  |  |   | 10,035 |  |  |   | 16,436 |  |  |   | 6,416  | 
|Amwiler-Gwinnett Industrial Portfolio |  |                                                    | 8  |          |  |      | GA |              |  |                         | IND |              |  |                | 5,454  |  |  |   | 5,888  |  |  |   | 17,690 |  |  |   | 3,073  | 
|Atlanta South Business Park           |  |                                                    | 9  |          |  |      | GA |              |  |                         | IND |              |  |                |       |  |  |   | 8,047  |  |  |   | 24,180 |  |  |   | 2,127  | 
|Atlantic Distribution Center          |  |                                                    | 1  |          |  |      | GA |              |  |                         | IND |              |  |                | 3,822  |  |  |   | 1,519  |  |  |   | 4,679  |  |  |   | 155    | 
|Norcross/ Brookhollow Portfolio       |  |                                                    | 4  |          |  |      | GA |              |  |                         | IND |              |  |                |       |  |  |   | 3,721  |  |  |   | 11,180 |  |  |   | 1,493  | 
|Northbrook Distribution Center        |  |                                                    | 1  |          |  |      | GA |              |  |                         | IND |              |  |                |       |  |  |   | 1,039  |  |  |   | 3,481  |  |  |   | 983    | 
|Shawnee Industrial                    |  |                                                    | 1  |          |  |      | GA |              |  |                         | IND |              |  |                |       |  |  |   | 2,481  |  |  |   | 7,531  |  |  |   | 4,980  | 
|South Ridge at Hartsfield             |  |                                                    | 1  |          |  |      | GA |              |  |                         | IND |              |  |                | 4,063  |  |  |   | 2,096  |  |  |   | 4,008  |  |  |   | 33     | 
|Southfield Industrial Portfolio       |  |                                                    | 13 |          |  |      | GA |              |  |                         | IND |              |  |                | 34,088 |  |  |   | 13,585 |  |  |   | 35,730 |  |  |   | 6,506  | 
|Southfield Logistic Center            |  |                                                    | 2  |          |  |      | GA |              |  |                         | IND |              |  |                | 11,220 |  |  |   | 3,200  |  |  |   | 10,012 |  |  |   | 5,667  | 
|Southside Distribution Center         |  |                                                    | 1  |          |  |      | GA |              |  |                         | IND |              |  |                | 1,151  |  |  |   | 766    |  |  |   | 2,480  |  |  |   |       | 
|Suwanee Creek Distribution SGP        |  |                                                    | 2  |          |  |      | GA |              |  |                         | IND |              |  |                | 13,569 |  |  |   | 3,098  |  |  |   | 12,944 |  |  |   | 2,283  | 
|Suwanee Creek OP                      |  |                                                    | 3  |          |  |      | GA |              |  |                         | IND |              |  |                |        |  |  |   | 1,693  |  |  |   | 10,386 |  |  |   | 9,733  | 
|Sylvan Industrial                     |  |                                                    | 1  |          |  |      | GA |              |  |                         | IND |              |  |                |       |  |  |   | 1,946  |  |  |   | 5,905  |  |  |   | 327    | 
|Chicago                               |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|Addison Business Center               |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 1,060  |  |  |   | 3,228  |  |  |   | 248    | 
|Alsip Industrial                      |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 1,200  |  |  |   | 3,744  |  |  |   | 263    | 
|AMB OHare Rosemont                   |  |                                                    | 14 |          |  |      | IL |              |  |                         | IND |              |  |                | 9,519  |  |  |   | 3,197  |  |  |   | 8,995  |  |  |   | 1,564  | 
|AMB Port OHare                       |  |                                                    | 2  |          |  |      | IL |              |  |                         | IND |              |  |                | 6,082  |  |  |   | 4,913  |  |  |   | 5,761  |  |  |   | 981    | 
|Arthur Distribution Center            |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                | 6,250  |  |  |   | 2,726  |  |  |   | 5,216  |  |  |   | 176    | 
|Bedford Warehouse                     |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                | 2,777  |  |  |   | 1,354  |  |  |   | 3,225  |  |  |   | 7      | 
|Belden Avenue                         |  |                                                    | 3  |          |  |      | IL |              |  |                         | IND |              |  |                | 10,018 |  |  |   | 5,491  |  |  |   | 13,655 |  |  |   | 218    | 
|Bensenville Industrial Park           |  |                                                    | 13 |          |  |      | IL |              |  |                         | IND |              |  |                | 36,717 |  |  |   | 20,799 |  |  |   | 62,438 |  |  |   | 11,711 | 
|Bridgeview Industrial                 |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 1,332  |  |  |   | 3,996  |  |  |   | 96     | 
|Chancellory Warehouse                 |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                | 2,576  |  |  |   | 1,566  |  |  |   | 2,006  |  |  |   | 755    | 
|Chicago Industrial Portfolio          |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                | 1,548  |  |  |   | 762    |  |  |   | 2,285  |  |  |   | 242    | 
|Chicago Ridge Freight Terminal        |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 3,705  |  |  |   | 3,576  |  |  |   | 19     | 
|Chicago/ OHare Industrial Portfolio  |  |                                                    | 5  |          |  |      | IL |              |  |                         | IND |              |  |                | 8,931  |  |  |   | 4,816  |  |  |   | 9,603  |  |  |   | 483    | 
|Elk Grove Village Industrial          |  |                                                    | 10 |          |  |      | IL |              |  |                         | IND |              |  |                | 16,843 |  |  |   | 7,060  |  |  |   | 21,739 |  |  |   | 3,510  | 
|Executive Drive                       |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 1,399  |  |  |   | 4,236  |  |  |   | 846    | 
|Hamilton Parkway                      |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 1,554  |  |  |   | 4,703  |  |  |   | 226    | 
|Hintz Building                        |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 420    |  |  |   | 1,259  |  |  |   | 308    | 
|Itasca Industrial Portfolio           |  |                                                    | 6  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |   | 6,416  |  |  |   | 19,289 |  |  |   | 3,193  | 

[Additional columns below]

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

|                                      |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |   |        |  |  |  |      |  |  |  |      | 
|------------------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------ | ---------- |  | - | ------ |  |  |  | ---- |  |  |  | ---- | 
|                                      |  |                                                    |        |              |  |             |        |             
|                                      |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                                      |  |                                                    |        |              |  | Year of     |        | Depreciable 
|                                      |  |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |        | Life      
|Property                              |  | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |        | (Years)   
|                                      |  |                                                    |        |              |  |             |        |              |  |               |        |           
|                                      |  |                                                    |        |              |  |             |        | (Restated)   |  |               |        | (Restated)
|                                      |  |                                                   
|                                      |  | (In thousands, except number of buildings/centers)
|Atlanta                               |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |   |        |  |  |  |      |  |  |  |      | 
|Airport Plaza                         |  | $                                                  | 1,811  |              |  | $           | 5,122  |              |  | $             | 6,933  |            |  | $ | 11     |  |  |  | 2003 |  |  |  | 5-40 | 
|Airport South Business Park           |  |                                                    | 10,035 |              |  |             | 22,852 |              |  |               | 32,886 |            |  |   | 1,564  |  |  |  | 2001 |  |  |  | 5-40 | 
|Amwiler-Gwinnett Industrial Portfolio |  |                                                    | 5,888  |              |  |             | 20,763 |              |  |               | 26,650 |            |  |   | 4,386  |  |  |  | 1997 |  |  |  | 5-40 | 
|Atlanta South Business Park           |  |                                                    | 8,047  |              |  |             | 26,307 |              |  |               | 34,354 |            |  |   | 4,907  |  |  |  | 1997 |  |  |  | 5-40 | 
|Atlantic Distribution Center          |  |                                                    | 1,519  |              |  |             | 4,834  |              |  |               | 6,353  |            |  |   | 421    |  |  |  | 2000 |  |  |  | 5-40 | 
|Norcross/ Brookhollow Portfolio       |  |                                                    | 3,721  |              |  |             | 12,673 |              |  |               | 16,394 |            |  |   | 2,435  |  |  |  | 1997 |  |  |  | 5-40 | 
|Northbrook Distribution Center        |  |                                                    | 1,039  |              |  |             | 4,464  |              |  |               | 5,503  |            |  |   | 900    |  |  |  | 2000 |  |  |  | 5-40 | 
|Shawnee Industrial                    |  |                                                    | 2,481  |              |  |             | 12,511 |              |  |               | 14,992 |            |  |   | 2,351  |  |  |  | 1999 |  |  |  | 5-40 | 
|South Ridge at Hartsfield             |  |                                                    | 2,096  |              |  |             | 4,041  |              |  |               | 6,137  |            |  |   | 299    |  |  |  | 2001 |  |  |  | 5-40 | 
|Southfield Industrial Portfolio       |  |                                                    | 13,585 |              |  |             | 42,235 |              |  |               | 55,820 |            |  |   | 3,277  |  |  |  | 1997 |  |  |  | 5-40 | 
|Southfield Logistic Center            |  |                                                    | 3,200  |              |  |             | 15,679 |              |  |               | 18,879 |            |  |   | 1,537  |  |  |  | 2002 |  |  |  | 5-40 | 
|Southside Distribution Center         |  |                                                    | 766    |              |  |             | 2,480  |              |  |               | 3,246  |            |  |   | 124    |  |  |  | 2001 |  |  |  | 5-40 | 
|Suwanee Creek Distribution SGP        |  |                                                    | 3,098  |              |  |             | 15,228 |              |  |               | 18,326 |            |  |   | 1,021  |  |  |  | 1998 |  |  |  | 5-40 | 
|Suwanee Creek OP                      |  |                                                    | 2,181  |              |  |             | 19,631 |              |  |               | 21,812 |            |  |   | 2,065  |  |  |  | 1998 |  |  |  | 5-40 | 
|Sylvan Industrial                     |  |                                                    | 1,946  |              |  |             | 6,232  |              |  |               | 8,178  |            |  |   | 716    |  |  |  | 1999 |  |  |  | 5-40 | 
|Chicago                               |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |   |        |  |  |  |      |  |  |  |      | 
|Addison Business Center               |  |                                                    | 1,060  |              |  |             | 3,475  |              |  |               | 4,535  |            |  |   | 301    |  |  |  | 2000 |  |  |  | 5-40 | 
|Alsip Industrial                      |  |                                                    | 1,200  |              |  |             | 4,007  |              |  |               | 5,207  |            |  |   | 625    |  |  |  | 1998 |  |  |  | 5-40 | 
|AMB OHare Rosemont                   |  |                                                    | 3,197  |              |  |             | 10,560 |              |  |               | 13,757 |            |  |   | 1,015  |  |  |  | 1999 |  |  |  | 5-40 | 
|AMB Port OHare                       |  |                                                    | 4,913  |              |  |             | 6,743  |              |  |               | 11,656 |            |  |   | 40     |  |  |  | 2001 |  |  |  | 5-40 | 
|Arthur Distribution Center            |  |                                                    | 2,726  |              |  |             | 5,392  |              |  |               | 8,118  |            |  |   | 406    |  |  |  | 2001 |  |  |  | 5-40 | 
|Bedford Warehouse                     |  |                                                    | 1,354  |              |  |             | 3,232  |              |  |               | 4,586  |            |  |   | 176    |  |  |  | 2001 |  |  |  | 5-40 | 
|Belden Avenue                         |  |                                                    | 5,491  |              |  |             | 13,873 |              |  |               | 19,365 |            |  |   | 1,595  |  |  |  | 1997 |  |  |  | 5-40 | 
|Bensenville Industrial Park           |  |                                                    | 20,799 |              |  |             | 74,149 |              |  |               | 94,948 |            |  |   | 14,448 |  |  |  | 1997 |  |  |  | 5-40 | 
|Bridgeview Industrial                 |  |                                                    | 1,332  |              |  |             | 4,092  |              |  |               | 5,424  |            |  |   | 627    |  |  |  | 1997 |  |  |  | 5-40 | 
|Chancellory Warehouse                 |  |                                                    | 1,566  |              |  |             | 2,760  |              |  |               | 4,327  |            |  |   | 134    |  |  |  | 2002 |  |  |  | 5-40 | 
|Chicago Industrial Portfolio          |  |                                                    | 762    |              |  |             | 2,527  |              |  |               | 3,289  |            |  |   | 417    |  |  |  | 1997 |  |  |  | 5-40 | 
|Chicago Ridge Freight Terminal        |  |                                                    | 3,705  |              |  |             | 3,595  |              |  |               | 7,300  |            |  |   | 212    |  |  |  | 2001 |  |  |  | 5-40 | 
|Chicago/ OHare Industrial Portfolio  |  |                                                    | 4,816  |              |  |             | 10,087 |              |  |               | 14,903 |            |  |   | 720    |  |  |  | 2001 |  |  |  | 5-40 | 
|Elk Grove Village Industrial          |  |                                                    | 7,060  |              |  |             | 25,249 |              |  |               | 32,308 |            |  |   | 2,038  |  |  |  | 1997 |  |  |  | 5-40 | 
|Executive Drive                       |  |                                                    | 1,399  |              |  |             | 5,082  |              |  |               | 6,481  |            |  |   | 1,054  |  |  |  | 1997 |  |  |  | 5-40 | 
|Hamilton Parkway                      |  |                                                    | 1,554  |              |  |             | 4,929  |              |  |               | 6,483  |            |  |   | 815    |  |  |  | 1997 |  |  |  | 5-40 | 
|Hintz Building                        |  |                                                    | 420    |              |  |             | 1,567  |              |  |               | 1,987  |            |  |   | 265    |  |  |  | 1998 |  |  |  | 5-40 | 
|Itasca Industrial Portfolio           |  |                                                    | 6,416  |              |  |             | 22,482 |              |  |               | 28,898 |            |  |   | 4,551  |  |  |  | 1997 |  |  |  | 5-40 | 

S-2



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                                            |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|----------------------------------------------------------- |  | -------------------------------------------------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                            |  |                                                    |    |          |  |      |    |              |  |                         |     |             
|                                                            |  |                                                    |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                                            |  | No. of                                             |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                                            |  | Bldgs./                                            |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                                                    |  | Ctrs.                                              |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                                            |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |               
|                                                            |  |                                                   
|                                                            |  | (In thousands, except number of buildings/centers)
|Melrose Park                                                |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |  | 2,936  |  |  |  | 9,190  |  |  |  | 2,076  | 
|NDP  Chicago                                               |  |                                                    | 3  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |  | 1,496  |  |  |  | 4,487  |  |  |  | 776    | 
|OHare Industrial Portfolio                                 |  |                                                    | 13 |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |  | 6,248  |  |  |  | 18,778 |  |  |  | 3,728  | 
|Poplar Gateway Truck Terminal                               |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |  | 4,551  |  |  |  | 3,152  |  |  |  | 1      | 
|Stone Distributing Center                                   |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                | 3,034  |  |  |  | 2,242  |  |  |  | 3,266  |  |  |  |       | 
|Thorndale Distribution                                      |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                | 5,549  |  |  |  | 4,130  |  |  |  | 4,216  |  |  |  | 227    | 
|Touhy Cargo Terminal                                        |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |  | 2,800  |  |  |  | 110    |  |  |  | 3,840  | 
|Windsor Court                                               |  |                                                    | 1  |          |  |      | IL |              |  |                         | IND |              |  |                |       |  |  |  | 766    |  |  |  | 2,338  |  |  |  | 102    | 
|Wood Dale Industrial (Includes Bonnie Lane)                 |  |                                                    | 5  |          |  |      | IL |              |  |                         | IND |              |  |                | 8,742  |  |  |  | 2,869  |  |  |  | 9,166  |  |  |  | 559    | 
|Yohan Industrial                                            |  |                                                    | 3  |          |  |      | IL |              |  |                         | IND |              |  |                | 4,684  |  |  |  | 5,904  |  |  |  | 7,323  |  |  |  | 520    | 
|Dallas/ Ft. Worth                                           |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Addison Technology Center                                   |  |                                                    | 1  |          |  |      | TX |              |  |                         | IND |              |  |                |       |  |  |  | 899    |  |  |  | 2,696  |  |  |  | 590    | 
|Dallas Industrial (Formerly Texas Industrial
    Portfolio) |  |                                                    | 12 |          |  |      | TX |              |  |                         | IND |              |  |                |       |  |  |  | 5,938  |  |  |  | 17,836 |  |  |  | 4,491  | 
|DFW Airfreight Portfolio                                    |  |                                                    | 6  |          |  |      | TX |              |  |                         | IND |              |  |                |       |  |  |  | 950    |  |  |  | 8,492  |  |  |  | 848    | 
|Greater Dallas Industrial Portfolio                         |  |                                                    | 5  |          |  |      | TX |              |  |                         | IND |              |  |                |       |  |  |  | 5,633  |  |  |  | 18,414 |  |  |  | 1,490  | 
|Lincoln Industrial Center                                   |  |                                                    | 1  |          |  |      | TX |              |  |                         | IND |              |  |                |       |  |  |  | 671    |  |  |  | 2,052  |  |  |  | 277    | 
|Lonestar Portfolio                                          |  |                                                    | 7  |          |  |      | TX |              |  |                         | IND |              |  |                | 16,501 |  |  |  | 6,909  |  |  |  | 21,154 |  |  |  | 1,062  | 
|Northfield Distribution Center                              |  |                                                    | 5  |          |  |      | TX |              |  |                         | IND |              |  |                | 16,522 |  |  |  | 6,446  |  |  |  | 20,087 |  |  |  | 189    | 
|Richardson Tech Center                                      |  |                                                    | 2  |          |  |      | TX |              |  |                         | IND |              |  |                | 5,101  |  |  |  | 1,524  |  |  |  | 5,887  |  |  |  | 1,452  | 
|Valwood Industrial                                          |  |                                                    | 2  |          |  |      | TX |              |  |                         | IND |              |  |                | 3,524  |  |  |  | 1,983  |  |  |  | 5,989  |  |  |  | 1,896  | 
|West North Carrier Parkway                                  |  |                                                    | 1  |          |  |      | TX |              |  |                         | IND |              |  |                | 2,852  |  |  |  | 1,375  |  |  |  | 4,165  |  |  |  | 1,267  | 
|Los Angeles                                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Anaheim Industrial                                          |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 1,457  |  |  |  | 4,341  |  |  |  | 664    | 
|Artesia Industrial Portfolio                                |  |                                                    | 25 |          |  |      | CA |              |  |                         | IND |              |  |                | 48,901 |  |  |  | 22,758 |  |  |  | 68,254 |  |  |  | 8,141  | 
|Aviation Logistics Center                                   |  |                                                    | 8  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 22,141 |  |  |  | 19,178 |  |  |  |       | 
|Bell Ranch Distribution                                     |  |                                                    | 5  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 6,904  |  |  |  | 12,915 |  |  |  | 273    | 
|Cabrillo Distribution Center                                |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 12,750 |  |  |  | 7,563  |  |  |  | 11,177 |  |  |  | 22     | 
|Carson Industrial                                           |  |                                                    | 12 |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 4,231  |  |  |  | 10,418 |  |  |  | 4,088  | 
|Carson Town Center                                          |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |        |  |  |  | 6,565  |  |  |  | 3,210  |  |  |  | 10,250 | 
|Chartwell Distribution Center                               |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,711  |  |  |  | 8,191  |  |  |  | 153    | 
|Del Amo Industrial Center                                   |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,529  |  |  |  | 7,651  |  |  |  | 31     | 
|Eaves Distribution Center                                   |  |                                                    | 3  |          |  |      | CA |              |  |                         | IND |              |  |                | 15,123 |  |  |  | 11,893 |  |  |  | 12,708 |  |  |  | 2,131  | 
|Ford Distribution Cntr                                      |  |                                                    | 7  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 24,557 |  |  |  | 22,046 |  |  |  | 2,596  | 
|Fordyce Distribution Center                                 |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 7,485  |  |  |  | 4,340  |  |  |  | 8,335  |  |  |  | 233    | 

[Additional columns below]

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

|                                                            |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |  |  |  |      |  |  |  |      | 
|----------------------------------------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------ | ---------- |  |  | ------ |  |  |  | ---- |  |  |  | ---- | 
|                                                            |  |                                                    |        |              |  |             |        |             
|                                                            |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                                                            |  |                                                    |        |              |  | Year of     |        | Depreciable 
|                                                            |  |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |        | Life      
|Property                                                    |  | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |        | (Years)   
|                                                            |  |                                                    |        |              |  |             |        |              |  |               |        |           
|                                                            |  |                                                    |        |              |  |             |        | (Restated)   |  |               |        | (Restated)
|                                                            |  |                                                   
|                                                            |  | (In thousands, except number of buildings/centers)
|Melrose Park                                                |  |                                                    | 2,936  |              |  |             | 11,266 |              |  |               | 14,202 |            |  |  | 2,220  |  |  |  | 1997 |  |  |  | 5-40 | 
|NDP  Chicago                                               |  |                                                    | 1,496  |              |  |             | 5,264  |              |  |               | 6,759  |            |  |  | 1,016  |  |  |  | 1998 |  |  |  | 5-40 | 
|OHare Industrial Portfolio                                 |  |                                                    | 6,248  |              |  |             | 22,506 |              |  |               | 28,754 |            |  |  | 4,087  |  |  |  | 1997 |  |  |  | 5-40 | 
|Poplar Gateway Truck Terminal                               |  |                                                    | 4,551  |              |  |             | 3,152  |              |  |               | 7,703  |            |  |  | 79     |  |  |  | 2002 |  |  |  | 5-40 | 
|Stone Distributing Center                                   |  |                                                    | 2,242  |              |  |             | 3,266  |              |  |               | 5,508  |            |  |  | 27     |  |  |  | 2003 |  |  |  | 5-40 | 
|Thorndale Distribution                                      |  |                                                    | 4,130  |              |  |             | 4,443  |              |  |               | 8,572  |            |  |  | 202    |  |  |  | 2002 |  |  |  | 5-40 | 
|Touhy Cargo Terminal                                        |  |                                                    | 2,800  |              |  |             | 3,950  |              |  |               | 6,750  |            |  |  | 16     |  |  |  | 2002 |  |  |  | 5-40 | 
|Windsor Court                                               |  |                                                    | 766    |              |  |             | 2,440  |              |  |               | 3,206  |            |  |  | 398    |  |  |  | 1997 |  |  |  | 5-40 | 
|Wood Dale Industrial (Includes Bonnie Lane)                 |  |                                                    | 2,869  |              |  |             | 9,724  |              |  |               | 12,594 |            |  |  | 758    |  |  |  | 1999 |  |  |  | 5-40 | 
|Yohan Industrial                                            |  |                                                    | 5,904  |              |  |             | 7,843  |              |  |               | 13,747 |            |  |  | 116    |  |  |  | 2003 |  |  |  | 5-40 | 
|Dallas/ Ft. Worth                                           |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |  |  |  |      |  |  |  |      | 
|Addison Technology Center                                   |  |                                                    | 899    |              |  |             | 3,286  |              |  |               | 4,185  |            |  |  | 661    |  |  |  | 1998 |  |  |  | 5-40 | 
|Dallas Industrial (Formerly Texas Industrial
    Portfolio) |  |                                                    | 5,938  |              |  |             | 22,327 |              |  |               | 28,266 |            |  |  | 4,852  |  |  |  | 1997 |  |  |  | 5-40 | 
|DFW Airfreight Portfolio                                    |  |                                                    | 950    |              |  |             | 9,339  |              |  |               | 10,290 |            |  |  | 1,497  |  |  |  | 2000 |  |  |  | 5-40 | 
|Greater Dallas Industrial Portfolio                         |  |                                                    | 5,633  |              |  |             | 19,904 |              |  |               | 25,536 |            |  |  | 4,136  |  |  |  | 1997 |  |  |  | 5-40 | 
|Lincoln Industrial Center                                   |  |                                                    | 671    |              |  |             | 2,328  |              |  |               | 2,999  |            |  |  | 478    |  |  |  | 1997 |  |  |  | 5-40 | 
|Lonestar Portfolio                                          |  |                                                    | 6,909  |              |  |             | 22,216 |              |  |               | 29,126 |            |  |  | 961    |  |  |  | 1997 |  |  |  | 5-40 | 
|Northfield Distribution Center                              |  |                                                    | 6,446  |              |  |             | 20,276 |              |  |               | 26,722 |            |  |  | 901    |  |  |  | 2002 |  |  |  | 5-40 | 
|Richardson Tech Center                                      |  |                                                    | 1,524  |              |  |             | 7,339  |              |  |               | 8,863  |            |  |  | 271    |  |  |  | 1997 |  |  |  | 5-40 | 
|Valwood Industrial                                          |  |                                                    | 1,983  |              |  |             | 7,885  |              |  |               | 9,868  |            |  |  | 1,830  |  |  |  | 1997 |  |  |  | 5-40 | 
|West North Carrier Parkway                                  |  |                                                    | 1,375  |              |  |             | 5,432  |              |  |               | 6,807  |            |  |  | 829    |  |  |  | 1997 |  |  |  | 5-40 | 
|Los Angeles                                                 |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |  |  |  |      |  |  |  |      | 
|Anaheim Industrial                                          |  |                                                    | 1,457  |              |  |             | 4,505  |              |  |               | 5,962  |            |  |  | 947    |  |  |  | 1997 |  |  |  | 5-40 | 
|Artesia Industrial Portfolio                                |  |                                                    | 22,758 |              |  |             | 76,896 |              |  |               | 99,654 |            |  |  | 14,344 |  |  |  | 1997 |  |  |  | 5-40 | 
|Aviation Logistics Center                                   |  |                                                    | 22,141 |              |  |             | 19,178 |              |  |               | 41,319 |            |  |  | 120    |  |  |  | 2003 |  |  |  | 5-40 | 
|Bell Ranch Distribution                                     |  |                                                    | 6,904  |              |  |             | 13,188 |              |  |               | 20,092 |            |  |  | 913    |  |  |  | 2001 |  |  |  | 5-40 | 
|Cabrillo Distribution Center                                |  |                                                    | 7,563  |              |  |             | 11,199 |              |  |               | 18,762 |            |  |  | 281    |  |  |  | 2002 |  |  |  | 5-40 | 
|Carson Industrial                                           |  |                                                    | 4,231  |              |  |             | 14,507 |              |  |               | 18,738 |            |  |  | 1,833  |  |  |  | 1999 |  |  |  | 5-40 | 
|Carson Town Center                                          |  |                                                    | 6,565  |              |  |             | 13,459 |              |  |               | 20,025 |            |  |  | 575    |  |  |  | 2000 |  |  |  | 5-40 | 
|Chartwell Distribution Center                               |  |                                                    | 2,711  |              |  |             | 8,344  |              |  |               | 11,055 |            |  |  | 763    |  |  |  | 2000 |  |  |  | 5-40 | 
|Del Amo Industrial Center                                   |  |                                                    | 2,529  |              |  |             | 7,682  |              |  |               | 10,211 |            |  |  | 626    |  |  |  | 2000 |  |  |  | 5-40 | 
|Eaves Distribution Center                                   |  |                                                    | 11,893 |              |  |             | 14,838 |              |  |               | 26,732 |            |  |  | 1,040  |  |  |  | 2001 |  |  |  | 5-40 | 
|Ford Distribution Cntr                                      |  |                                                    | 24,557 |              |  |             | 24,642 |              |  |               | 49,198 |            |  |  | 1,652  |  |  |  | 2001 |  |  |  | 5-40 | 
|Fordyce Distribution Center                                 |  |                                                    | 4,340  |              |  |             | 8,568  |              |  |               | 12,908 |            |  |  | 680    |  |  |  | 2001 |  |  |  | 5-40 | 

S-3



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|-------------------------------- |  | -------------------------------------------------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |             
|                                 |  |                                                    |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                 |  | No. of                                             |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                 |  | Bldgs./                                            |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                         |  | Ctrs.                                              |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |               
|                                 |  |                                                   
|                                 |  | (In thousands, except number of buildings/centers)
|Harris Business Center  AF I    |  |                                                    | 10 |          |  |      | CA |              |  |                         | IND |              |  |                | 26,818 |  |  |  | 19,273 |  |  |  | 26,288 |  |  |  | 1,637  | 
|Harris Business Center  AF II   |  |                                                    | 9  |          |  |      | CA |              |  |                         | IND |              |  |                | 32,992 |  |  |  | 20,772 |  |  |  | 31,050 |  |  |  | 1,189  | 
|Hawthorne LAX Cargo Center       |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 8,434  |  |  |  | 2,775  |  |  |  | 8,377  |  |  |  | 264    | 
|International Multifoods         |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 1,613  |  |  |  | 4,879  |  |  |  | 1,011  | 
|L.A. County Industrial Portfolio |  |                                                    | 6  |          |  |      | CA |              |  |                         | IND |              |  |                | 22,809 |  |  |  | 9,430  |  |  |  | 29,242 |  |  |  | 2,653  | 
|LA Media Tech Center             |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 4,588  |  |  |  | 12,531 |  |  |  | 4,419  | 
|LAX Logistics Center             |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 29,622 |  |  |  | 24,513 |  |  |  | 1,415  | 
|Los Nietos Business Center       |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                | 7,974  |  |  |  | 2,488  |  |  |  | 7,751  |  |  |  | 335    | 
|NDP  Los Angeles                |  |                                                    | 6  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 5,948  |  |  |  | 17,844 |  |  |  | 2,491  | 
|Normandie Industrial             |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,398  |  |  |  | 7,491  |  |  |  | 1,641  | 
|Northpointe Commerce             |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 1,773  |  |  |  | 5,358  |  |  |  | 437    | 
|Park One at LAX                  |  |                                                    |   |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 75,000 |  |  |  | 431    |  |  |  | 66     | 
|Pioneer Alburtis                 |  |                                                    | 5  |          |  |      | CA |              |  |                         | IND |              |  |                | 8,278  |  |  |  | 2,482  |  |  |  | 7,166  |  |  |  | 781    | 
|Slauson Distribution Center      |  |                                                    | 8  |          |  |      | CA |              |  |                         | IND |              |  |                | 26,194 |  |  |  | 7,806  |  |  |  | 23,552 |  |  |  | 2,886  | 
|Stadium Business Park            |  |                                                    | 9  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 3,768  |  |  |  | 11,345 |  |  |  | 1,317  | 
|Sunset Distribution Center       |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 6,718  |  |  |  | 2,765  |  |  |  | 1,635  | 
|Systematics                      |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 911    |  |  |  | 2,773  |  |  |  | 620    | 
|Torrance Commerce Center         |  |                                                    | 6  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,045  |  |  |  | 6,136  |  |  |  | 917    | 
|Van Nuys Airport Industrial      |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 9,393  |  |  |  | 8,641  |  |  |  | 14,973 | 
|Walnut Drive                     |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 964    |  |  |  | 2,918  |  |  |  | 744    | 
|Watson Industrial Center         |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 4,530  |  |  |  | 1,713  |  |  |  | 5,321  |  |  |  | 1,325  | 
|Wilmington Avenue Warehouse      |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 3,849  |  |  |  | 11,605 |  |  |  | 2,663  | 
|Miami                            |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Beacon Centre  AF I             |  |                                                    | 4  |          |  |      | FL |              |  |                         | IND |              |  |                | 17,070 |  |  |  | 7,229  |  |  |  | 22,238 |  |  |  | 1,063  | 
|Beacon Centre  OP               |  |                                                    | 18 |          |  |      | FL |              |  |                         | IND |              |  |                | 66,690 |  |  |  | 31,704 |  |  |  | 96,681 |  |  |  | 15,298 | 
|Beacon Industrial Park           |  |                                                    | 8  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 10,105 |  |  |  | 31,437 |  |  |  | 5,656  | 
|Blue Lagoon Business Park        |  |                                                    | 2  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 4,945  |  |  |  | 14,875 |  |  |  | 1,202  | 
|Dolphin Distribution Center      |  |                                                    | 1  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 1,581  |  |  |  | 3,602  |  |  |  |       | 
|Gratigny Distribution Center     |  |                                                    | 1  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 1,551  |  |  |  | 2,380  |  |  |  | 383    | 
|Marlin Distribution Center       |  |                                                    | 1  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 1,076  |  |  |  | 2,169  |  |  |  | 311    | 
|Miami Airport Business Center    |  |                                                    | 6  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 6,400  |  |  |  | 19,634 |  |  |  | 3,156  | 
|Panther Distribution Center      |  |                                                    | 1  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 1,840  |  |  |  | 3,252  |  |  |  |       | 
|Sunrise Industrial               |  |                                                    | 4  |          |  |      | FL |              |  |                         | IND |              |  |                | 11,643 |  |  |  | 6,266  |  |  |  | 18,798 |  |  |  | 3,220  | 
|No. New Jersey/ New York         |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|AMB Meadowlands Park             |  |                                                    | 8  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 5,449  |  |  |  | 14,458 |  |  |  | 3,906  | 
|Dellamor                         |  |                                                    | 8  |          |  |      | NJ |              |  |                         | IND |              |  |                | 14,408 |  |  |  | 12,061 |  |  |  | 11,577 |  |  |  | 303    | 

[Additional columns below]

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

|                                 |  |                                                    |        |              |  |             |         |              |  |               |         |            |  |  |        |  |  |  |      |  |  |  |      | 
|-------------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------- | ------------ |  | ------------- | ------- | ---------- |  |  | ------ |  |  |  | ---- |  |  |  | ---- | 
|                                 |  |                                                    |        |              |  |             |         |             
|                                 |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |         |             
|                                 |  |                                                    |        |              |  | Year of     |         | Depreciable 
|                                 |  |                                                    |        | Building &   |  | Total       |         | Accumulated  |  | Construction/ |         | Life      
|Property                         |  | Land                                               |        | Improvements |  | Costs(1)(2) |         | Depreciation |  | Acquisition   |         | (Years)   
|                                 |  |                                                    |        |              |  |             |         |              |  |               |         |           
|                                 |  |                                                    |        |              |  |             |         | (Restated)   |  |               |         | (Restated)
|                                 |  |                                                   
|                                 |  | (In thousands, except number of buildings/centers)
|Harris Business Center  AF I    |  |                                                    | 19,273 |              |  |             | 27,925  |              |  |               | 47,198  |            |  |  | 2,613  |  |  |  | 2000 |  |  |  | 5-40 | 
|Harris Business Center  AF II   |  |                                                    | 20,772 |              |  |             | 32,239  |              |  |               | 53,010  |            |  |  | 3,318  |  |  |  | 2000 |  |  |  | 5-40 | 
|Hawthorne LAX Cargo Center       |  |                                                    | 2,775  |              |  |             | 8,641   |              |  |               | 11,416  |            |  |  | 658    |  |  |  | 2000 |  |  |  | 5-40 | 
|International Multifoods         |  |                                                    | 1,613  |              |  |             | 5,890   |              |  |               | 7,503   |            |  |  | 976    |  |  |  | 1997 |  |  |  | 5-40 | 
|L.A. County Industrial Portfolio |  |                                                    | 9,430  |              |  |             | 31,895  |              |  |               | 41,325  |            |  |  | 2,138  |  |  |  | 1997 |  |  |  | 5-40 | 
|LA Media Tech Center             |  |                                                    | 4,588  |              |  |             | 16,950  |              |  |               | 21,539  |            |  |  | 2,204  |  |  |  | 1998 |  |  |  | 5-40 | 
|LAX Logistics Center             |  |                                                    | 29,622 |              |  |             | 25,928  |              |  |               | 55,549  |            |  |  | 163    |  |  |  | 2003 |  |  |  | 5-40 | 
|Los Nietos Business Center       |  |                                                    | 2,488  |              |  |             | 8,086   |              |  |               | 10,574  |            |  |  | 622    |  |  |  | 1999 |  |  |  | 5-40 | 
|NDP  Los Angeles                |  |                                                    | 5,948  |              |  |             | 20,335  |              |  |               | 26,283  |            |  |  | 3,210  |  |  |  | 1998 |  |  |  | 5-40 | 
|Normandie Industrial             |  |                                                    | 2,398  |              |  |             | 9,131   |              |  |               | 11,529  |            |  |  | 996    |  |  |  | 2000 |  |  |  | 5-40 | 
|Northpointe Commerce             |  |                                                    | 1,773  |              |  |             | 5,795   |              |  |               | 7,568   |            |  |  | 1,052  |  |  |  | 1997 |  |  |  | 5-40 | 
|Park One at LAX                  |  |                                                    | 75,000 |              |  |             | 497     |              |  |               | 75,497  |            |  |  | 11     |  |  |  | 2002 |  |  |  | 5-40 | 
|Pioneer Alburtis                 |  |                                                    | 2,482  |              |  |             | 7,947   |              |  |               | 10,429  |            |  |  | 673    |  |  |  | 1999 |  |  |  | 5-40 | 
|Slauson Distribution Center      |  |                                                    | 7,806  |              |  |             | 26,438  |              |  |               | 34,244  |            |  |  | 2,213  |  |  |  | 2000 |  |  |  | 5-40 | 
|Stadium Business Park            |  |                                                    | 3,768  |              |  |             | 12,662  |              |  |               | 16,430  |            |  |  | 2,266  |  |  |  | 1997 |  |  |  | 5-40 | 
|Sunset Distribution Center       |  |                                                    | 6,718  |              |  |             | 4,400   |              |  |               | 11,118  |            |  |  | 56     |  |  |  | 2002 |  |  |  | 5-40 | 
|Systematics                      |  |                                                    | 911    |              |  |             | 3,393   |              |  |               | 4,304   |            |  |  | 628    |  |  |  | 1997 |  |  |  | 5-40 | 
|Torrance Commerce Center         |  |                                                    | 2,045  |              |  |             | 7,053   |              |  |               | 9,099   |            |  |  | 1,302  |  |  |  | 1998 |  |  |  | 5-40 | 
|Van Nuys Airport Industrial      |  |                                                    | 9,393  |              |  |             | 23,614  |              |  |               | 33,007  |            |  |  | 2,480  |  |  |  | 2000 |  |  |  | 5-40 | 
|Walnut Drive                     |  |                                                    | 964    |              |  |             | 3,662   |              |  |               | 4,625   |            |  |  | 594    |  |  |  | 1997 |  |  |  | 5-40 | 
|Watson Industrial Center         |  |                                                    | 1,713  |              |  |             | 6,646   |              |  |               | 8,358   |            |  |  | 419    |  |  |  | 2001 |  |  |  | 5-40 | 
|Wilmington Avenue Warehouse      |  |                                                    | 3,849  |              |  |             | 14,268  |              |  |               | 18,117  |            |  |  | 2,386  |  |  |  | 1999 |  |  |  | 5-40 | 
|Miami                            |  |                                                    |        |              |  |             |         |              |  |               |         |            |  |  |        |  |  |  |      |  |  |  |      | 
|Beacon Centre  AF I             |  |                                                    | 7,229  |              |  |             | 23,301  |              |  |               | 30,530  |            |  |  | 2,069  |  |  |  | 2000 |  |  |  | 5-40 | 
|Beacon Centre  OP               |  |                                                    | 31,704 |              |  |             | 111,980 |              |  |               | 143,683 |            |  |  | 11,979 |  |  |  | 2000 |  |  |  | 5-40 | 
|Beacon Industrial Park           |  |                                                    | 10,105 |              |  |             | 37,094  |              |  |               | 47,199  |            |  |  | 6,335  |  |  |  | 1997 |  |  |  | 5-40 | 
|Blue Lagoon Business Park        |  |                                                    | 4,945  |              |  |             | 16,077  |              |  |               | 21,022  |            |  |  | 2,817  |  |  |  | 1997 |  |  |  | 5-40 | 
|Dolphin Distribution Center      |  |                                                    | 1,581  |              |  |             | 3,602   |              |  |               | 5,184   |            |  |  | 23     |  |  |  | 2003 |  |  |  | 5-40 | 
|Gratigny Distribution Center     |  |                                                    | 1,551  |              |  |             | 2,763   |              |  |               | 4,314   |            |  |  | 106    |  |  |  | 2003 |  |  |  | 5-40 | 
|Marlin Distribution Center       |  |                                                    | 1,076  |              |  |             | 2,480   |              |  |               | 3,556   |            |  |  | 53     |  |  |  | 2003 |  |  |  | 5-40 | 
|Miami Airport Business Center    |  |                                                    | 6,400  |              |  |             | 22,790  |              |  |               | 29,190  |            |  |  | 3,039  |  |  |  | 1999 |  |  |  | 5-40 | 
|Panther Distribution Center      |  |                                                    | 1,840  |              |  |             | 3,252   |              |  |               | 5,091   |            |  |  | 20     |  |  |  | 2003 |  |  |  | 5-40 | 
|Sunrise Industrial               |  |                                                    | 6,266  |              |  |             | 22,017  |              |  |               | 28,283  |            |  |  | 2,885  |  |  |  | 1998 |  |  |  | 5-40 | 
|No. New Jersey/ New York         |  |                                                    |        |              |  |             |         |              |  |               |         |            |  |  |        |  |  |  |      |  |  |  |      | 
|AMB Meadowlands Park             |  |                                                    | 5,449  |              |  |             | 18,363  |              |  |               | 23,812  |            |  |  | 1,832  |  |  |  | 2000 |  |  |  | 5-40 | 
|Dellamor                         |  |                                                    | 12,061 |              |  |             | 11,880  |              |  |               | 23,941  |            |  |  | 515    |  |  |  | 2002 |  |  |  | 5-40 | 

S-4



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                                   |  |         |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|-------------------------------------------------- |  | ------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                   |  |         |    |          |  |      |    |              |  |                         |     |             
|                                                   |  |         |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                                   |  | No. of  |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                                   |  | Bldgs./ |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                                           |  | Ctrs.   |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                                   |  |         |    |          |  |      |    |              |  |                         |     |              |  |               
|                                                  
|(In thousands, except number of buildings/centers)
|Docks Corner                                      |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                | 35,748 |  |  |  | 5,125  |  |  |  | 22,516 |  |  |  | 28,417 | 
|Fairmeadows Portfolio                              |  |         | 17 |          |  |      | NJ |              |  |                         | IND |              |  |                | 25,129 |  |  |  | 18,615 |  |  |  | 27,540 |  |  |  | 1,317  | 
|Highway 17                                         |  |         | 2  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 8,185  |  |  |  | 6,490  |  |  |  |       | 
|Interstate Crossdock                               |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 12,712 |  |  |  | 19,295 |  |  |  | 50     | 
|Jamesburg                                          |  |         | 3  |          |  |      | NJ |              |  |                         | IND |              |  |                | 22,127 |  |  |  | 11,700 |  |  |  | 35,101 |  |  |  | 1,789  | 
|Linden Industrial                                  |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 900    |  |  |  | 2,753  |  |  |  | 473    | 
|Mahwah Corporate Center                            |  |         | 5  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 9,003  |  |  |  | 27,573 |  |  |  | 574    | 
|Meadow Lane 495                                    |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 838    |  |  |  | 2,594  |  |  |  | 282    | 
|Meadowlands AF II                                  |  |         | 4  |          |  |      | NJ |              |  |                         | IND |              |  |                | 12,212 |  |  |  | 6,755  |  |  |  | 13,093 |  |  |  | 1,900  | 
|Meadowlands Cross Dock                             |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 1,110  |  |  |  | 3,485  |  |  |  | 989    | 
|Moonachie Industrial                               |  |         | 2  |          |  |      | NJ |              |  |                         | IND |              |  |                | 5,451  |  |  |  | 2,731  |  |  |  | 5,228  |  |  |  | 280    | 
|Murray Hill Parkway                                |  |         | 2  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 1,670  |  |  |  | 2,568  |  |  |  | 5,173  | 
|Newark Airport I & II                              |  |         | 2  |          |  |      | NJ |              |  |                         | IND |              |  |                | 3,617  |  |  |  | 1,755  |  |  |  | 5,400  |  |  |  | 483    | 
|Orchard Hill                                       |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 1,212  |  |  |  | 1,411  |  |  |  |       | 
|Porete Avenue Warehouse                            |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 4,067  |  |  |  | 12,202 |  |  |  | 4,502  | 
|Skyland Crossdock                                  |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 7,250  |  |  |  | 253    | 
|Teterboro Meadowlands 15                           |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                | 9,750  |  |  |  | 4,961  |  |  |  | 9,618  |  |  |  | 1,273  | 
|Two South Middlesex                                |  |         | 1  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  | 2,247  |  |  |  | 6,781  |  |  |  | 1,043  | 
|JFK Air Cargo  AF I                               |  |         | 14 |          |  |      | NY |              |  |                         | IND |              |  |                | 18,807 |  |  |  | 10,210 |  |  |  | 29,730 |  |  |  | 3,664  | 
|JFK Air Cargo  OP                                 |  |         | 14 |          |  |      | NY |              |  |                         | IND |              |  |                |       |  |  |  | 15,834 |  |  |  | 45,694 |  |  |  | 4,112  | 
|JFK Airport Park                                   |  |         | 1  |          |  |      | NY |              |  |                         | IND |              |  |                |       |  |  |  | 2,350  |  |  |  | 7,251  |  |  |  | 631    | 
|On Tarmac                                          |  |         |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|AMB BWI Cargo Center                               |  |         | 1  |          |  |      | MD |              |  |                         | IND |              |  |                | 2,749  |  |  |  |       |  |  |  | 6,367  |  |  |  | 87     | 
|AMB DAY Cargo Center                               |  |         | 5  |          |  |      | OH |              |  |                         | IND |              |  |                | 6,625  |  |  |  |       |  |  |  | 7,163  |  |  |  | 428    | 
|AMB DFW Cargo Center 1                             |  |         | 1  |          |  |      | TX |              |  |                         | IND |              |  |                | 15,949 |  |  |  |       |  |  |  | 19,683 |  |  |  | 3,869  | 
|AMB DFW Cargo Center 2                             |  |         | 1  |          |  |      | TX |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 4,286  |  |  |  | 13,950 | 
|AMB DFW Cargo Center East                          |  |         | 3  |          |  |      | TX |              |  |                         | IND |              |  |                | 6,042  |  |  |  |       |  |  |  | 20,632 |  |  |  | 281    | 
|AMB IAD Cargo Center                               |  |         | 1  |          |  |      | VA |              |  |                         | IND |              |  |                | 12,675 |  |  |  |       |  |  |  | 38,840 |  |  |  |       | 
|AMB IAH Cargo Center                               |  |         | 1  |          |  |      | TX |              |  |                         | IND |              |  |                | 7,292  |  |  |  |       |  |  |  | 339    |  |  |  | 8,951  | 
|AMB JAX Cargo Center                               |  |         | 1  |          |  |      | FL |              |  |                         | IND |              |  |                | 3,050  |  |  |  |       |  |  |  | 3,029  |  |  |  |       | 
|AMB JFK Cargo Center 75&77                         |  |         | 2  |          |  |      | NJ |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 30,965 |  |  |  | 2,604  | 
|AMB LAS Cargo Center                               |  |         | 5  |          |  |      | NV |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 24,072 |  |  |  | 604    | 
|AMB LAX Cargo Center                               |  |         | 3  |          |  |      | CA |              |  |                         | IND |              |  |                | 7,337  |  |  |  |       |  |  |  | 13,445 |  |  |  | 130    | 
|AMB MCI Cargo Center 1                             |  |         | 1  |          |  |      | MO |              |  |                         | IND |              |  |                | 5,035  |  |  |  |       |  |  |  | 5,793  |  |  |  | 164    | 
|AMB MCI Cargo Center 2                             |  |         | 1  |          |  |      | MO |              |  |                         | IND |              |  |                | 9,150  |  |  |  |       |  |  |  | 8,134  |  |  |  |       | 
|AMB PDX Cargo Center                               |  |         | 2  |          |  |      | OR |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 26     |  |  |  | 9,887  | 
|AMB PHL Air Cargo Center                           |  |         | 1  |          |  |      | PA |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 9,716  |  |  |  | 290    | 
|AMB RNO Cargo Center                               |  |         | 2  |          |  |      | NV |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 6,014  |  |  |  | 192    | 

[Additional columns below]

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

|                           |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |       |  |  |  |      |  |  |  |      | 
|-------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------ | ---------- |  |  | ----- |  |  |  | ---- |  |  |  | ---- | 
|                           |  |                                                    |        |              |  |             |        |             
|                           |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                           |  |                                                    |        |              |  | Year of     |        | Depreciable 
|                           |  |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |        | Life      
|Property                   |  | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |        | (Years)   
|                           |  |                                                    |        |              |  |             |        |              |  |               |        |           
|                           |  |                                                    |        |              |  |             |        | (Restated)   |  |               |        | (Restated)
|                           |  |                                                   
|                           |  | (In thousands, except number of buildings/centers)
|Docks Corner              |  |                                                    | 13,672 |              |  |             | 42,386 |              |  |               | 56,058 |            |  |  | 3,531 |  |  |  | 1997 |  |  |  | 5-40 | 
|Fairmeadows Portfolio      |  |                                                    | 18,615 |              |  |             | 28,857 |              |  |               | 47,472 |            |  |  | 90    |  |  |  | 2003 |  |  |  | 5-40 | 
|Highway 17                 |  |                                                    | 8,185  |              |  |             | 6,490  |              |  |               | 14,675 |            |  |  | 197   |  |  |  | 2002 |  |  |  | 5-40 | 
|Interstate Crossdock       |  |                                                    | 12,712 |              |  |             | 19,345 |              |  |               | 32,057 |            |  |  | 700   |  |  |  | 2002 |  |  |  | 5-40 | 
|Jamesburg                  |  |                                                    | 11,700 |              |  |             | 36,890 |              |  |               | 48,591 |            |  |  | 6,022 |  |  |  | 1998 |  |  |  | 5-40 | 
|Linden Industrial          |  |                                                    | 900    |              |  |             | 3,225  |              |  |               | 4,125  |            |  |  | 438   |  |  |  | 1999 |  |  |  | 5-40 | 
|Mahwah Corporate Center    |  |                                                    | 9,003  |              |  |             | 28,147 |              |  |               | 37,150 |            |  |  | 4,275 |  |  |  | 1998 |  |  |  | 5-40 | 
|Meadow Lane 495            |  |                                                    | 838    |              |  |             | 2,876  |              |  |               | 3,714  |            |  |  | 385   |  |  |  | 1999 |  |  |  | 5-40 | 
|Meadowlands AF II          |  |                                                    | 6,755  |              |  |             | 14,992 |              |  |               | 21,747 |            |  |  | 1,202 |  |  |  | 2001 |  |  |  | 5-40 | 
|Meadowlands Cross Dock     |  |                                                    | 1,110  |              |  |             | 4,474  |              |  |               | 5,584  |            |  |  | 631   |  |  |  | 2000 |  |  |  | 5-40 | 
|Moonachie Industrial       |  |                                                    | 2,731  |              |  |             | 5,508  |              |  |               | 8,239  |            |  |  | 449   |  |  |  | 2001 |  |  |  | 5-40 | 
|Murray Hill Parkway        |  |                                                    | 1,670  |              |  |             | 7,741  |              |  |               | 9,411  |            |  |  | 1,610 |  |  |  | 1999 |  |  |  | 5-40 | 
|Newark Airport I & II      |  |                                                    | 1,755  |              |  |             | 5,883  |              |  |               | 7,638  |            |  |  | 694   |  |  |  | 2000 |  |  |  | 5-40 | 
|Orchard Hill               |  |                                                    | 1,212  |              |  |             | 1,411  |              |  |               | 2,622  |            |  |  | 47    |  |  |  | 2002 |  |  |  | 5-40 | 
|Porete Avenue Warehouse    |  |                                                    | 4,067  |              |  |             | 16,704 |              |  |               | 20,772 |            |  |  | 2,407 |  |  |  | 1998 |  |  |  | 5-40 | 
|Skyland Crossdock          |  |                                                    |       |              |  |             | 7,503  |              |  |               | 7,503  |            |  |  | 268   |  |  |  | 2002 |  |  |  | 5-40 | 
|Teterboro Meadowlands 15   |  |                                                    | 4,961  |              |  |             | 10,892 |              |  |               | 15,853 |            |  |  | 1,117 |  |  |  | 2001 |  |  |  | 5-40 | 
|Two South Middlesex        |  |                                                    | 2,247  |              |  |             | 7,825  |              |  |               | 10,072 |            |  |  | 1,527 |  |  |  | 1997 |  |  |  | 5-40 | 
|JFK Air Cargo  AF I       |  |                                                    | 10,210 |              |  |             | 33,394 |              |  |               | 43,604 |            |  |  | 4,084 |  |  |  | 2000 |  |  |  | 5-40 | 
|JFK Air Cargo  OP         |  |                                                    | 15,834 |              |  |             | 49,806 |              |  |               | 65,639 |            |  |  | 5,571 |  |  |  | 2000 |  |  |  | 5-40 | 
|JFK Airport Park           |  |                                                    | 2,350  |              |  |             | 7,881  |              |  |               | 10,231 |            |  |  | 837   |  |  |  | 2000 |  |  |  | 5-40 | 
|On Tarmac                  |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |       |  |  |  |      |  |  |  |      | 
|AMB BWI Cargo Center       |  |                                                    |       |              |  |             | 6,454  |              |  |               | 6,454  |            |  |  | 1,094 |  |  |  | 2000 |  |  |  | 5-19 | 
|AMB DAY Cargo Center       |  |                                                    |       |              |  |             | 7,591  |              |  |               | 7,591  |            |  |  | 1,138 |  |  |  | 2000 |  |  |  | 5-23 | 
|AMB DFW Cargo Center 1     |  |                                                    |       |              |  |             | 23,553 |              |  |               | 23,553 |            |  |  | 3,206 |  |  |  | 1999 |  |  |  | 5-38 | 
|AMB DFW Cargo Center 2     |  |                                                    |       |              |  |             | 18,237 |              |  |               | 18,237 |            |  |  | 2,052 |  |  |  | 1999 |  |  |  | 5-39 | 
|AMB DFW Cargo Center East  |  |                                                    |       |              |  |             | 20,913 |              |  |               | 20,913 |            |  |  | 2,531 |  |  |  | 2000 |  |  |  | 5-26 | 
|AMB IAD Cargo Center       |  |                                                    |       |              |  |             | 38,841 |              |  |               | 38,841 |            |  |  | 3,938 |  |  |  | 2002 |  |  |  | 5-15 | 
|AMB IAH Cargo Center       |  |                                                    |       |              |  |             | 9,290  |              |  |               | 9,290  |            |  |  | 77    |  |  |  | 2000 |  |  |  | 5-36 | 
|AMB JAX Cargo Center       |  |                                                    |       |              |  |             | 3,029  |              |  |               | 3,029  |            |  |  | 422   |  |  |  | 2000 |  |  |  | 5-22 | 
|AMB JFK Cargo Center 75&77 |  |                                                    |       |              |  |             | 33,569 |              |  |               | 33,569 |            |  |  | 3,888 |  |  |  | 2002 |  |  |  | 5-13 | 
|AMB LAS Cargo Center       |  |                                                    |       |              |  |             | 24,676 |              |  |               | 24,676 |            |  |  | 616   |  |  |  | 2003 |  |  |  | 5-33 | 
|AMB LAX Cargo Center       |  |                                                    |       |              |  |             | 13,574 |              |  |               | 13,574 |            |  |  | 1,991 |  |  |  | 2000 |  |  |  | 5-22 | 
|AMB MCI Cargo Center 1     |  |                                                    |       |              |  |             | 5,957  |              |  |               | 5,957  |            |  |  | 1,059 |  |  |  | 2000 |  |  |  | 5-18 | 
|AMB MCI Cargo Center 2     |  |                                                    |       |              |  |             | 8,134  |              |  |               | 8,134  |            |  |  | 929   |  |  |  | 2000 |  |  |  | 5-27 | 
|AMB PDX Cargo Center       |  |                                                    |       |              |  |             | 9,913  |              |  |               | 9,913  |            |  |  | 817   |  |  |  | 2002 |  |  |  | 5-28 | 
|AMB PHL Air Cargo Center   |  |                                                    |       |              |  |             | 10,005 |              |  |               | 10,005 |            |  |  | 1,602 |  |  |  | 2000 |  |  |  | 5-21 | 
|AMB RNO Cargo Center       |  |                                                    |       |              |  |             | 6,206  |              |  |               | 6,206  |            |  |  | 189   |  |  |  | 2003 |  |  |  | 5-23 | 

S-5



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                         |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |       | 
|---------------------------------------- |  | -------------------------------------------------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ----- | 
|                                         |  |                                                    |    |          |  |      |    |              |  |                         |     |             
|                                         |  |                                                    |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                         |  | No. of                                             |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                         |  | Bldgs./                                            |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                                 |  | Ctrs.                                              |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                         |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |               
|                                         |  |                                                   
|                                         |  | (In thousands, except number of buildings/centers)
|AMB SEA Air Cargo Center 314             |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                | 2,902  |  |  |  |       |  |  |  | 2,939  |  |  |  |      | 
|AMB SEA Cargo Center North               |  |                                                    | 2  |          |  |      | WA |              |  |                         | IND |              |  |                | 4,616  |  |  |  |       |  |  |  | 15,594 |  |  |  | 82    | 
|AMB SEA Cargo Center South               |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  |       |  |  |  | 3,056  |  |  |  | 206   | 
|San Francisco Bay Area                   |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |       | 
|Acer Distribution Center                 |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 3,146  |  |  |  | 9,479  |  |  |  | 2,478 | 
|Albrae Business Center                   |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 7,730  |  |  |  | 6,299  |  |  |  | 6,227  |  |  |  | 650   | 
|Alvarado Business Center                 |  |                                                    | 5  |          |  |      | CA |              |  |                         | IND |              |  |                | 23,828 |  |  |  | 6,342  |  |  |  | 26,671 |  |  |  | 9,113 | 
|Brennan Distribution                     |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 4,163  |  |  |  | 3,683  |  |  |  | 3,022  |  |  |  | 2,193 | 
|Central Bay                              |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                | 6,951  |  |  |  | 3,896  |  |  |  | 7,400  |  |  |  | 1,165 | 
|Component Drive Industrial Portfolio     |  |                                                    | 3  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 12,688 |  |  |  | 6,974  |  |  |  | 761   | 
|Concord Industrial Portfolio             |  |                                                    | 10 |          |  |      | CA |              |  |                         | IND |              |  |                | 10,475 |  |  |  | 3,872  |  |  |  | 11,647 |  |  |  | 2,487 | 
|Dado Distribution                        |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 7,221  |  |  |  | 3,739  |  |  |  | 953   | 
|Diablo Industrial Park                   |  |                                                    | 12 |          |  |      | CA |              |  |                         | IND |              |  |                | 8,829  |  |  |  | 3,379  |  |  |  | 10,489 |  |  |  | 1,144 | 
|Doolittle Distribution Center            |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,644  |  |  |  | 8,014  |  |  |  | 678   | 
|Dowe Industrial Center                   |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,665  |  |  |  | 8,034  |  |  |  | 2,003 | 
|Dublin Industrial Portfolio              |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,980  |  |  |  | 9,042  |  |  |  | 1,011 | 
|East Bay Doolittle                       |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 7,128  |  |  |  | 11,023 |  |  |  | 2,035 | 
|East Bay Whipple                         |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 6,894  |  |  |  | 5,333  |  |  |  | 8,126  |  |  |  | 1,635 | 
|East Grand Airfreight                    |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                | 4,222  |  |  |  | 5,093  |  |  |  | 4,190  |  |  |  |      | 
|Edgewater Industrial Center              |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 4,038  |  |  |  | 15,113 |  |  |  | 4,482 | 
|Fairway Drive Industrial                 |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                | 12,195 |  |  |  | 4,214  |  |  |  | 13,949 |  |  |  | 2,466 | 
|Hayward Industrial  Hathaway            |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 4,473  |  |  |  | 13,546 |  |  |  | 529   | 
|Hayward Industrial  Wiegman             |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 7,234  |  |  |  | 2,773  |  |  |  | 8,393  |  |  |  | 406   | 
|Junction Industrial Park                 |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 7,875  |  |  |  | 23,975 |  |  |  | 1,652 | 
|Laurelwood Drive                         |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,750  |  |  |  | 8,538  |  |  |  | 569   | 
|Lawrence SSF                             |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,870  |  |  |  | 5,521  |  |  |  | 1,124 | 
|Marina Business Park                     |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                | 4,312  |  |  |  | 3,280  |  |  |  | 4,316  |  |  |  | 47    | 
|Martin/ Scott Industrial Portfolio       |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 9,052  |  |  |  | 5,309  |  |  |  | 336   | 
|Milmont Page Business Center             |  |                                                    | 3  |          |  |      | CA |              |  |                         | IND |              |  |                | 11,386 |  |  |  | 3,422  |  |  |  | 10,600 |  |  |  | 3,073 | 
|Moffett Business Center (MBC Industrial) |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 5,892  |  |  |  | 17,716 |  |  |  | 3,281 | 
|Moffett Distribution                     |  |                                                    | 7  |          |  |      | CA |              |  |                         | IND |              |  |                | 19,121 |  |  |  | 26,916 |  |  |  | 11,277 |  |  |  | 1,353 | 
|Moffett Park R&D Portfolio               |  |                                                    | 14 |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 14,805 |  |  |  | 44,462 |  |  |  | 9,448 | 
|Pacific Business Center                  |  |                                                    | 2  |          |  |      | CA |              |  |                         | IND |              |  |                | 8,642  |  |  |  | 5,417  |  |  |  | 16,291 |  |  |  | 1,747 | 

[Additional columns below]

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

|                                         |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |  |  |  |      |  |  |  |      | 
|---------------------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------ | ---------- |  |  | ------ |  |  |  | ---- |  |  |  | ---- | 
|                                         |  |                                                    |        |              |  |             |        |             
|                                         |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                                         |  |                                                    |        |              |  | Year of     |        | Depreciable 
|                                         |  |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |        | Life      
|Property                                 |  | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |        | (Years)   
|                                         |  |                                                    |        |              |  |             |        |              |  |               |        |           
|                                         |  |                                                    |        |              |  |             |        | (Restated)   |  |               |        | (Restated)
|                                         |  |                                                   
|                                         |  | (In thousands, except number of buildings/centers)
|AMB SEA Air Cargo Center 314             |  |                                                    |       |              |  |             | 2,939  |              |  |               | 2,939  |            |  |  | 7      |  |  |  | 2003 |  |  |  | 5-15 | 
|AMB SEA Cargo Center North               |  |                                                    |       |              |  |             | 15,676 |              |  |               | 15,676 |            |  |  | 1,856  |  |  |  | 2000 |  |  |  | 5-27 | 
|AMB SEA Cargo Center South               |  |                                                    |       |              |  |             | 3,262  |              |  |               | 3,262  |            |  |  | 749    |  |  |  | 2000 |  |  |  | 5-14 | 
|San Francisco Bay Area                   |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |  |  |  |      |  |  |  |      | 
|Acer Distribution Center                 |  |                                                    | 3,146  |              |  |             | 11,957 |              |  |               | 15,103 |            |  |  | 2,436  |  |  |  | 1997 |  |  |  | 5-40 | 
|Albrae Business Center                   |  |                                                    | 6,299  |              |  |             | 6,877  |              |  |               | 13,176 |            |  |  | 399    |  |  |  | 2001 |  |  |  | 5-40 | 
|Alvarado Business Center                 |  |                                                    | 6,342  |              |  |             | 35,784 |              |  |               | 42,126 |            |  |  | 2,154  |  |  |  | 1997 |  |  |  | 5-40 | 
|Brennan Distribution                     |  |                                                    | 3,683  |              |  |             | 5,215  |              |  |               | 8,898  |            |  |  | 436    |  |  |  | 2001 |  |  |  | 5-40 | 
|Central Bay                              |  |                                                    | 3,896  |              |  |             | 8,565  |              |  |               | 12,460 |            |  |  | 800    |  |  |  | 2001 |  |  |  | 5-40 | 
|Component Drive Industrial Portfolio     |  |                                                    | 12,688 |              |  |             | 7,735  |              |  |               | 20,423 |            |  |  | 653    |  |  |  | 2001 |  |  |  | 5-40 | 
|Concord Industrial Portfolio             |  |                                                    | 3,872  |              |  |             | 14,134 |              |  |               | 18,006 |            |  |  | 2,415  |  |  |  | 1999 |  |  |  | 5-40 | 
|Dado Distribution                        |  |                                                    | 7,221  |              |  |             | 4,693  |              |  |               | 11,914 |            |  |  | 256    |  |  |  | 2001 |  |  |  | 5-40 | 
|Diablo Industrial Park                   |  |                                                    | 3,379  |              |  |             | 11,633 |              |  |               | 15,013 |            |  |  | 1,507  |  |  |  | 1999 |  |  |  | 5-40 | 
|Doolittle Distribution Center            |  |                                                    | 2,644  |              |  |             | 8,692  |              |  |               | 11,336 |            |  |  | 920    |  |  |  | 2000 |  |  |  | 5-40 | 
|Dowe Industrial Center                   |  |                                                    | 2,665  |              |  |             | 10,037 |              |  |               | 12,702 |            |  |  | 1,825  |  |  |  | 1997 |  |  |  | 5-40 | 
|Dublin Industrial Portfolio              |  |                                                    | 2,980  |              |  |             | 10,053 |              |  |               | 13,033 |            |  |  | 877    |  |  |  | 2000 |  |  |  | 5-40 | 
|East Bay Doolittle                       |  |                                                    | 7,128  |              |  |             | 13,058 |              |  |               | 20,186 |            |  |  | 1,039  |  |  |  | 2001 |  |  |  | 5-40 | 
|East Bay Whipple                         |  |                                                    | 5,333  |              |  |             | 9,761  |              |  |               | 15,094 |            |  |  | 663    |  |  |  | 2001 |  |  |  | 5-40 | 
|East Grand Airfreight                    |  |                                                    | 5,093  |              |  |             | 4,190  |              |  |               | 9,283  |            |  |  | 217    |  |  |  | 2003 |  |  |  | 5-40 | 
|Edgewater Industrial Center              |  |                                                    | 4,038  |              |  |             | 19,595 |              |  |               | 23,633 |            |  |  | 1,962  |  |  |  | 2000 |  |  |  | 5-40 | 
|Fairway Drive Industrial                 |  |                                                    | 4,214  |              |  |             | 16,415 |              |  |               | 20,629 |            |  |  | 1,126  |  |  |  | 1997 |  |  |  | 5-40 | 
|Hayward Industrial  Hathaway            |  |                                                    | 4,473  |              |  |             | 14,075 |              |  |               | 18,547 |            |  |  | 1,093  |  |  |  | 2000 |  |  |  | 5-40 | 
|Hayward Industrial  Wiegman             |  |                                                    | 2,773  |              |  |             | 8,799  |              |  |               | 11,571 |            |  |  | 691    |  |  |  | 2000 |  |  |  | 5-40 | 
|Junction Industrial Park                 |  |                                                    | 7,875  |              |  |             | 25,627 |              |  |               | 33,502 |            |  |  | 3,667  |  |  |  | 1999 |  |  |  | 5-40 | 
|Laurelwood Drive                         |  |                                                    | 2,750  |              |  |             | 9,107  |              |  |               | 11,857 |            |  |  | 1,409  |  |  |  | 1997 |  |  |  | 5-40 | 
|Lawrence SSF                             |  |                                                    | 2,870  |              |  |             | 6,644  |              |  |               | 9,514  |            |  |  | 668    |  |  |  | 2001 |  |  |  | 5-40 | 
|Marina Business Park                     |  |                                                    | 3,280  |              |  |             | 4,363  |              |  |               | 7,643  |            |  |  | 147    |  |  |  | 2002 |  |  |  | 5-40 | 
|Martin/ Scott Industrial Portfolio       |  |                                                    | 9,052  |              |  |             | 5,645  |              |  |               | 14,697 |            |  |  | 389    |  |  |  | 2001 |  |  |  | 5-40 | 
|Milmont Page Business Center             |  |                                                    | 3,422  |              |  |             | 13,674 |              |  |               | 17,095 |            |  |  | 748    |  |  |  | 1997 |  |  |  | 5-40 | 
|Moffett Business Center (MBC Industrial) |  |                                                    | 5,892  |              |  |             | 20,998 |              |  |               | 26,890 |            |  |  | 3,778  |  |  |  | 1997 |  |  |  | 5-40 | 
|Moffett Distribution                     |  |                                                    | 26,916 |              |  |             | 12,631 |              |  |               | 39,547 |            |  |  | 844    |  |  |  | 2001 |  |  |  | 5-40 | 
|Moffett Park R&D Portfolio               |  |                                                    | 14,805 |              |  |             | 53,910 |              |  |               | 68,715 |            |  |  | 13,329 |  |  |  | 1997 |  |  |  | 5-40 | 
|Pacific Business Center                  |  |                                                    | 5,417  |              |  |             | 18,039 |              |  |               | 23,456 |            |  |  | 3,136  |  |  |  | 1997 |  |  |  | 5-40 | 

S-6



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|-------------------------------- |  | -------------------------------------------------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |             
|                                 |  |                                                    |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                 |  | No. of                                             |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                 |  | Bldgs./                                            |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                         |  | Ctrs.                                              |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                 |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |               
|                                 |  |                                                   
|                                 |  | (In thousands, except number of buildings/centers)
|Pardee Drive                     |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 1,533  |  |  |  | 619    |  |  |  | 1,880  |  |  |  | 274    | 
|Silicon Valley R&D Portfolio     |  |                                                    | 5  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 6,700  |  |  |  | 20,186 |  |  |  | 4,779  | 
|South Bay Industrial             |  |                                                    | 8  |          |  |      | CA |              |  |                         | IND |              |  |                | 17,709 |  |  |  | 14,992 |  |  |  | 45,016 |  |  |  | 5,564  | 
|Utah Airfreight                  |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                | 17,433 |  |  |  | 18,753 |  |  |  | 8,381  |  |  |  | 316    | 
|Weigman Road                     |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 1,563  |  |  |  | 4,688  |  |  |  | 1,550  | 
|Williams & Bouroughs             |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                | 7,908  |  |  |  | 2,382  |  |  |  | 6,981  |  |  |  | 3,309  | 
|Willow Park Industrial Portfolio |  |                                                    | 21 |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 25,590 |  |  |  | 76,771 |  |  |  | 12,596 | 
|Yosemite Drive                   |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 2,350  |  |  |  | 7,051  |  |  |  | 753    | 
|Zanker/ Charcot Industrial       |  |                                                    | 5  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 5,282  |  |  |  | 15,887 |  |  |  | 2,413  | 
|Seattle                          |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Black River                      |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                | 3,420  |  |  |  | 1,845  |  |  |  | 3,559  |  |  |  | 285    | 
|Earlington Business Park         |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                | 4,238  |  |  |  | 2,766  |  |  |  | 3,234  |  |  |  | 326    | 
|East Valley Warehouse            |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 6,813  |  |  |  | 20,511 |  |  |  | 5,696  | 
|Gateway Corporate Center         |  |                                                    | 9  |          |  |      | WA |              |  |                         | IND |              |  |                | 27,000 |  |  |  | 10,643 |  |  |  | 32,908 |  |  |  | 4,323  | 
|Gateway North                    |  |                                                    | 6  |          |  |      | WA |              |  |                         | IND |              |  |                | 14,000 |  |  |  | 5,270  |  |  |  | 16,296 |  |  |  | 1,497  | 
|Harvest Business Park            |  |                                                    | 3  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 2,371  |  |  |  | 7,153  |  |  |  | 1,197  | 
|Kent Centre Corporate Park       |  |                                                    | 4  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 3,042  |  |  |  | 9,165  |  |  |  | 1,199  | 
|Kingsport Industrial Park        |  |                                                    | 7  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 8,101  |  |  |  | 23,812 |  |  |  | 4,104  | 
|NDP  Seattle                    |  |                                                    | 4  |          |  |      | WA |              |  |                         | IND |              |  |                | 11,854 |  |  |  | 3,993  |  |  |  | 11,773 |  |  |  | 1,110  | 
|Northwest Distribution Center    |  |                                                    | 3  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 3,533  |  |  |  | 10,751 |  |  |  | 996    | 
|Puget Sound Airfreight           |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 1,329  |  |  |  | 1,830  |  |  |  | 255    | 
|Renton Northwest Corp. Park      |  |                                                    | 6  |          |  |      | WA |              |  |                         | IND |              |  |                | 24,245 |  |  |  | 25,959 |  |  |  | 14,792 |  |  |  | 768    | 
|SEA Logistics Center 1           |  |                                                    | 3  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 9,218  |  |  |  | 18,968 |  |  |  | 21     | 
|SEA Logistics Center 2           |  |                                                    | 3  |          |  |      | WA |              |  |                         | IND |              |  |                | 14,490 |  |  |  | 11,535 |  |  |  | 24,601 |  |  |  |       | 
|Seattle Airport Industrial       |  |                                                    | 1  |          |  |      | WA |              |  |                         | IND |              |  |                |       |  |  |  | 619    |  |  |  | 1,923  |  |  |  | 180    | 
|Trans-Pacific Industrial Park    |  |                                                    | 11 |          |  |      | WA |              |  |                         | IND |              |  |                | 48,600 |  |  |  | 31,675 |  |  |  | 42,210 |  |  |  | 531    | 
|Other Industrial Markets         |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Activity Distribution Center     |  |                                                    | 4  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 3,736  |  |  |  | 11,248 |  |  |  | 1,799  | 
|Scripps Sorrento                 |  |                                                    | 1  |          |  |      | CA |              |  |                         | IND |              |  |                |       |  |  |  | 1,110  |  |  |  | 3,330  |  |  |  | 101    | 
|Chancellor Square                |  |                                                    | 3  |          |  |      | FL |              |  |                         | IND |              |  |                | 15,029 |  |  |  | 2,009  |  |  |  | 6,106  |  |  |  | 2,783  | 
|Presidents Drive                 |  |                                                    | 6  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 5,770  |  |  |  | 17,655 |  |  |  | 1,990  | 
|Sand Lake Service Center         |  |                                                    | 6  |          |  |      | FL |              |  |                         | IND |              |  |                |       |  |  |  | 3,483  |  |  |  | 10,585 |  |  |  | 2,805  | 
|Elmwood Business Park            |  |                                                    | 5  |          |  |      | LA |              |  |                         | IND |              |  |                |       |  |  |  | 4,163  |  |  |  | 12,488 |  |  |  | 1,934  | 
|Boston Industrial Portfolio      |  |                                                    | 18 |          |  |      | MA |              |  |                         | IND |              |  |                | 10,031 |  |  |  | 16,707 |  |  |  | 52,013 |  |  |  | 15,298 | 
|Cabot Business Park              |  |                                                    | 13 |          |  |      | MA |              |  |                         | IND |              |  |                |       |  |  |  | 15,283 |  |  |  | 46,433 |  |  |  | 4,635  | 
|Cabot Business Park (KYDJ)       |  |                                                    | 2  |          |  |      | MA |              |  |                         | IND |              |  |                |       |  |  |  | 1,474  |  |  |  | 14,353 |  |  |  | 8,404  | 
|Cabot Business Park SGP          |  |                                                    | 3  |          |  |      | MA |              |  |                         | IND |              |  |                | 16,423 |  |  |  | 5,499  |  |  |  | 16,969 |  |  |  | 2,181  | 

[Additional columns below]

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

|                                 |  |                                                    |        |              |  |             |        |              |  |               |         |            |  |  |        |  |  |  |      |  |  |  |      | 
|-------------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------- | ---------- |  |  | ------ |  |  |  | ---- |  |  |  | ---- | 
|                                 |  |                                                    |        |              |  |             |        |             
|                                 |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                                 |  |                                                    |        |              |  | Year of     |        | Depreciable 
|                                 |  |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |         | Life      
|Property                         |  | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |         | (Years)   
|                                 |  |                                                    |        |              |  |             |        |              |  |               |         |           
|                                 |  |                                                    |        |              |  |             |        | (Restated)   |  |               |         | (Restated)
|                                 |  |                                                   
|                                 |  | (In thousands, except number of buildings/centers)
|Pardee Drive                     |  |                                                    | 619    |              |  |             | 2,154  |              |  |               | 2,773   |            |  |  | 153    |  |  |  | 1999 |  |  |  | 5-40 | 
|Silicon Valley R&D Portfolio     |  |                                                    | 6,700  |              |  |             | 24,965 |              |  |               | 31,665  |            |  |  | 5,923  |  |  |  | 1997 |  |  |  | 5-40 | 
|South Bay Industrial             |  |                                                    | 14,992 |              |  |             | 50,581 |              |  |               | 65,573  |            |  |  | 9,617  |  |  |  | 1997 |  |  |  | 5-40 | 
|Utah Airfreight                  |  |                                                    | 18,753 |              |  |             | 8,697  |              |  |               | 27,450  |            |  |  | 116    |  |  |  | 2003 |  |  |  | 5-40 | 
|Weigman Road                     |  |                                                    | 1,563  |              |  |             | 6,239  |              |  |               | 7,802   |            |  |  | 982    |  |  |  | 1997 |  |  |  | 5-40 | 
|Williams & Bouroughs             |  |                                                    | 2,382  |              |  |             | 10,290 |              |  |               | 12,673  |            |  |  | 1,234  |  |  |  | 1999 |  |  |  | 5-40 | 
|Willow Park Industrial Portfolio |  |                                                    | 25,590 |              |  |             | 89,367 |              |  |               | 114,957 |            |  |  | 14,703 |  |  |  | 1998 |  |  |  | 5-40 | 
|Yosemite Drive                   |  |                                                    | 2,350  |              |  |             | 7,804  |              |  |               | 10,154  |            |  |  | 1,245  |  |  |  | 1997 |  |  |  | 5-40 | 
|Zanker/ Charcot Industrial       |  |                                                    | 5,282  |              |  |             | 18,300 |              |  |               | 23,583  |            |  |  | 3,343  |  |  |  | 1997 |  |  |  | 5-40 | 
|Seattle                          |  |                                                    |        |              |  |             |        |              |  |               |         |            |  |  |        |  |  |  |      |  |  |  |      | 
|Black River                      |  |                                                    | 1,845  |              |  |             | 3,844  |              |  |               | 5,689   |            |  |  | 377    |  |  |  | 2001 |  |  |  | 5-40 | 
|Earlington Business Park         |  |                                                    | 2,766  |              |  |             | 3,560  |              |  |               | 6,327   |            |  |  | 172    |  |  |  | 2002 |  |  |  | 5-40 | 
|East Valley Warehouse            |  |                                                    | 6,813  |              |  |             | 26,207 |              |  |               | 33,019  |            |  |  | 4,382  |  |  |  | 1999 |  |  |  | 5-40 | 
|Gateway Corporate Center         |  |                                                    | 10,643 |              |  |             | 37,231 |              |  |               | 47,874  |            |  |  | 4,854  |  |  |  | 1999 |  |  |  | 5-40 | 
|Gateway North                    |  |                                                    | 5,270  |              |  |             | 17,792 |              |  |               | 23,062  |            |  |  | 2,106  |  |  |  | 1999 |  |  |  | 5-40 | 
|Harvest Business Park            |  |                                                    | 2,371  |              |  |             | 8,350  |              |  |               | 10,721  |            |  |  | 1,665  |  |  |  | 1997 |  |  |  | 5-40 | 
|Kent Centre Corporate Park       |  |                                                    | 3,042  |              |  |             | 10,364 |              |  |               | 13,406  |            |  |  | 2,097  |  |  |  | 1997 |  |  |  | 5-40 | 
|Kingsport Industrial Park        |  |                                                    | 8,101  |              |  |             | 27,917 |              |  |               | 36,017  |            |  |  | 4,963  |  |  |  | 1997 |  |  |  | 5-40 | 
|NDP  Seattle                    |  |                                                    | 3,993  |              |  |             | 12,883 |              |  |               | 16,876  |            |  |  | 511    |  |  |  | 1998 |  |  |  | 5-40 | 
|Northwest Distribution Center    |  |                                                    | 3,533  |              |  |             | 11,747 |              |  |               | 15,280  |            |  |  | 2,340  |  |  |  | 1997 |  |  |  | 5-40 | 
|Puget Sound Airfreight           |  |                                                    | 1,329  |              |  |             | 2,084  |              |  |               | 3,413   |            |  |  | 122    |  |  |  | 2002 |  |  |  | 5-40 | 
|Renton Northwest Corp. Park      |  |                                                    | 25,959 |              |  |             | 15,560 |              |  |               | 41,519  |            |  |  | 636    |  |  |  | 2002 |  |  |  | 5-40 | 
|SEA Logistics Center 1           |  |                                                    | 9,218  |              |  |             | 18,990 |              |  |               | 28,208  |            |  |  | 120    |  |  |  | 2003 |  |  |  | 5-40 | 
|SEA Logistics Center 2           |  |                                                    | 11,535 |              |  |             | 24,601 |              |  |               | 36,136  |            |  |  | 49     |  |  |  | 2003 |  |  |  | 5-40 | 
|Seattle Airport Industrial       |  |                                                    | 619    |              |  |             | 2,103  |              |  |               | 2,722   |            |  |  | 235    |  |  |  | 2000 |  |  |  | 5-40 | 
|Trans-Pacific Industrial Park    |  |                                                    | 31,675 |              |  |             | 42,741 |              |  |               | 74,415  |            |  |  | 546    |  |  |  | 2003 |  |  |  | 5-40 | 
|Other Industrial Markets         |  |                                                    |        |              |  |             |        |              |  |               |         |            |  |  |        |  |  |  |      |  |  |  |      | 
|Activity Distribution Center     |  |                                                    | 3,736  |              |  |             | 13,048 |              |  |               | 16,784  |            |  |  | 2,485  |  |  |  | 1997 |  |  |  | 5-40 | 
|Scripps Sorrento                 |  |                                                    | 1,110  |              |  |             | 3,432  |              |  |               | 4,542   |            |  |  | 513    |  |  |  | 1998 |  |  |  | 5-40 | 
|Chancellor Square                |  |                                                    | 2,009  |              |  |             | 8,890  |              |  |               | 10,899  |            |  |  | 2,353  |  |  |  | 1998 |  |  |  | 5-40 | 
|Presidents Drive                 |  |                                                    | 5,770  |              |  |             | 19,644 |              |  |               | 25,414  |            |  |  | 3,747  |  |  |  | 1997 |  |  |  | 5-40 | 
|Sand Lake Service Center         |  |                                                    | 3,483  |              |  |             | 13,390 |              |  |               | 16,872  |            |  |  | 2,810  |  |  |  | 1998 |  |  |  | 5-40 | 
|Elmwood Business Park            |  |                                                    | 4,163  |              |  |             | 14,421 |              |  |               | 18,584  |            |  |  | 2,425  |  |  |  | 1998 |  |  |  | 5-40 | 
|Boston Industrial Portfolio      |  |                                                    | 16,707 |              |  |             | 67,311 |              |  |               | 84,018  |            |  |  | 11,999 |  |  |  | 1998 |  |  |  | 5-40 | 
|Cabot Business Park              |  |                                                    | 16,329 |              |  |             | 50,022 |              |  |               | 66,351  |            |  |  | 9,340  |  |  |  | 1998 |  |  |  | 5-40 | 
|Cabot Business Park (KYDJ)       |  |                                                    | 1,823  |              |  |             | 22,408 |              |  |               | 24,232  |            |  |  | 3,543  |  |  |  | 1998 |  |  |  | 5-40 | 
|Cabot Business Park SGP          |  |                                                    | 6,256  |              |  |             | 18,394 |              |  |               | 24,650  |            |  |  | 626    |  |  |  | 2002 |  |  |  | 5-40 | 

S-7



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                    |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |                |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|----------------------------------- |  | -------------------------------------------------- | -- | -------- |  | ---- | -- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                    |  |                                                    |    |          |  |      |    |              |  |                         |     |             
|                                    |  |                                                    |    |          |  |      |    |              |  | Initial Cost to Company |     | Costs       
|                                    |  | No. of                                             |    |          |  |      |    |              |  |                         |     | Capitalized 
|                                    |  | Bldgs./                                            |    |          |  |      |    |              |  |                         |     | Building &   |  | Subsequent    
|Property                            |  | Ctrs.                                              |    | Location |  | Type |    | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                    |  |                                                    |    |          |  |      |    |              |  |                         |     |              |  |               
|                                    |  |                                                   
|                                    |  | (In thousands, except number of buildings/centers)
|Bennington Corporate Center         |  |                                                    | 2  |          |  |      | MD |              |  |                         | IND |              |  |                | 5,854  |  |  |  | 2,671  |  |  |  | 8,181  |  |  |  | 962    | 
|B.W.I                               |  |                                                    | 2  |          |  |      | MD |              |  |                         | IND |              |  |                | 3,454  |  |  |  | 2,258  |  |  |  | 5,149  |  |  |  | 174    | 
|Columbia Business Center            |  |                                                    | 9  |          |  |      | MD |              |  |                         | IND |              |  |                | 3,752  |  |  |  | 3,856  |  |  |  | 11,736 |  |  |  | 2,117  | 
|Corridor Industrial                 |  |                                                    | 1  |          |  |      | MD |              |  |                         | IND |              |  |                | 2,376  |  |  |  | 996    |  |  |  | 3,019  |  |  |  | 270    | 
|Crysen Industrial                   |  |                                                    | 1  |          |  |      | MD |              |  |                         | IND |              |  |                | 2,223  |  |  |  | 1,425  |  |  |  | 4,275  |  |  |  | 993    | 
|Gateway 58                          |  |                                                    | 3  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 3,256  |  |  |  | 9,940  |  |  |  | 112    | 
|Gateway Commerce Center             |  |                                                    | 5  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 4,083  |  |  |  | 12,336 |  |  |  | 1,245  | 
|Greenwood Industrial                |  |                                                    | 3  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 4,729  |  |  |  | 14,188 |  |  |  | 2,250  | 
|Meadowridge Industrial              |  |                                                    | 3  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 3,716  |  |  |  | 11,147 |  |  |  | 360    | 
|Oakland Ridge Industrial Center     |  |                                                    | 12 |          |  |      | MD |              |  |                         | IND |              |  |                | 4,236  |  |  |  | 3,297  |  |  |  | 19,207 |  |  |  | 7,075  | 
|Patuxent Alliance 8280              |  |                                                    | 1  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 887    |  |  |  | 1,706  |  |  |  | 34     | 
|Patuxent Range Road                 |  |                                                    | 2  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 1,696  |  |  |  | 5,127  |  |  |  | 564    | 
|Preston Court                       |  |                                                    | 1  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 2,313  |  |  |  | 7,192  |  |  |  | 323    | 
|The Rotunda                         |  |                                                    | 2  |          |  |      | MD |              |  |                         | IND |              |  |                | 12,468 |  |  |  | 4,400  |  |  |  | 17,736 |  |  |  | 3,487  | 
|Santa Barbara Court                 |  |                                                    | 1  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 1,617  |  |  |  | 5,029  |  |  |  | 881    | 
|Technology I                        |  |                                                    | 2  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 1,657  |  |  |  | 5,049  |  |  |  | 374    | 
|Technology II                       |  |                                                    | 9  |          |  |      | MD |              |  |                         | IND |              |  |                |       |  |  |  | 10,206 |  |  |  | 3,761  |  |  |  | 30,155 | 
|Braemar Business Center             |  |                                                    | 2  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 1,566  |  |  |  | 4,613  |  |  |  | 1,074  | 
|Burnsville Business Center          |  |                                                    | 1  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 932    |  |  |  | 2,796  |  |  |  | 1,130  | 
|Corporate Square Industrial         |  |                                                    | 6  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 4,024  |  |  |  | 12,113 |  |  |  | 2,483  | 
|Edenvale Business Center            |  |                                                    | 1  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 775    |  |  |  | 2,412  |  |  |  | 960    | 
|Minneapolis Distribution Portfolio  |  |                                                    | 4  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 6,079  |  |  |  | 18,692 |  |  |  | 4,338  | 
|Mendota Heights                     |  |                                                    | 1  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 1,367  |  |  |  | 4,565  |  |  |  | 2,453  | 
|Minnetonka Industrial               |  |                                                    | 10 |          |  |      | MN |              |  |                         | IND |              |  |                | 10,834 |  |  |  | 6,690  |  |  |  | 20,380 |  |  |  | 3,912  | 
|Minneapolis Industrial Portfolio IV |  |                                                    | 4  |          |  |      | MN |              |  |                         | IND |              |  |                | 7,214  |  |  |  | 4,938  |  |  |  | 14,854 |  |  |  | 2,221  | 
|Penn James Office Warehouse         |  |                                                    | 2  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 1,991  |  |  |  | 6,013  |  |  |  | 1,175  | 
|Round Lake Business Center          |  |                                                    | 1  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 875    |  |  |  | 2,625  |  |  |  | 586    | 
|Twin Cities                         |  |                                                    | 2  |          |  |      | MN |              |  |                         | IND |              |  |                |       |  |  |  | 4,873  |  |  |  | 14,638 |  |  |  | 6,561  | 
|Chemway Industrial Portfolio        |  |                                                    | 5  |          |  |      | NC |              |  |                         | IND |              |  |                |       |  |  |  | 2,875  |  |  |  | 8,625  |  |  |  | 1,051  | 
|CLT Logistics Center                |  |                                                    | 11 |          |  |      | NC |              |  |                         | IND |              |  |                |       |  |  |  | 6,377  |  |  |  | 24,950 |  |  |  | 42     | 
|South Point Business Park           |  |                                                    | 5  |          |  |      | NC |              |  |                         | IND |              |  |                | 8,329  |  |  |  | 3,130  |  |  |  | 10,452 |  |  |  | 1,712  | 
|Janitrol                            |  |                                                    | 1  |          |  |      | OH |              |  |                         | IND |              |  |                |       |  |  |  | 1,797  |  |  |  | 5,390  |  |  |  | 365    | 
|Cascade Business Center             |  |                                                    | 4  |          |  |      | OR |              |  |                         | IND |              |  |                |       |  |  |  | 2,825  |  |  |  | 7,860  |  |  |  | 2,321  | 
|Wilsonville                         |  |                                                    | 1  |          |  |      | OR |              |  |                         | IND |              |  |                |       |  |  |  | 3,407  |  |  |  | 13,493 |  |  |  | 62     | 
|Corporate Park/ Hickory Hill        |  |                                                    | 7  |          |  |      | TN |              |  |                         | IND |              |  |                | 15,723 |  |  |  | 6,789  |  |  |  | 20,366 |  |  |  | 2,182  | 

[Additional columns below]

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

|                                    |  |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |       |  |  |  |      |  |  |  |      | 
|----------------------------------- |  | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------ | ---------- |  |  | ----- |  |  |  | ---- |  |  |  | ---- | 
|                                    |  |                                                    |        |              |  |             |        |             
|                                    |  | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                                    |  |                                                    |        |              |  | Year of     |        | Depreciable 
|                                    |  |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |        | Life      
|Property                            |  | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |        | (Years)   
|                                    |  |                                                    |        |              |  |             |        |              |  |               |        |           
|                                    |  |                                                    |        |              |  |             |        | (Restated)   |  |               |        | (Restated)
|                                    |  |                                                   
|                                    |  | (In thousands, except number of buildings/centers)
|Bennington Corporate Center         |  |                                                    | 2,671  |              |  |             | 9,144  |              |  |               | 11,815 |            |  |  | 1,123 |  |  |  | 2000 |  |  |  | 5-40 | 
|B.W.I                               |  |                                                    | 2,258  |              |  |             | 5,323  |              |  |               | 7,581  |            |  |  | 260   |  |  |  | 2002 |  |  |  | 5-40 | 
|Columbia Business Center            |  |                                                    | 3,856  |              |  |             | 13,853 |              |  |               | 17,709 |            |  |  | 2,366 |  |  |  | 1999 |  |  |  | 5-40 | 
|Corridor Industrial                 |  |                                                    | 996    |              |  |             | 3,289  |              |  |               | 4,285  |            |  |  | 439   |  |  |  | 1999 |  |  |  | 5-40 | 
|Crysen Industrial                   |  |                                                    | 1,425  |              |  |             | 5,268  |              |  |               | 6,693  |            |  |  | 1,018 |  |  |  | 1998 |  |  |  | 5-40 | 
|Gateway 58                          |  |                                                    | 3,256  |              |  |             | 10,052 |              |  |               | 13,308 |            |  |  | 918   |  |  |  | 2000 |  |  |  | 5-40 | 
|Gateway Commerce Center             |  |                                                    | 4,083  |              |  |             | 13,580 |              |  |               | 17,664 |            |  |  | 2,167 |  |  |  | 1999 |  |  |  | 5-40 | 
|Greenwood Industrial                |  |                                                    | 4,729  |              |  |             | 16,438 |              |  |               | 21,167 |            |  |  | 2,759 |  |  |  | 1998 |  |  |  | 5-40 | 
|Meadowridge Industrial              |  |                                                    | 3,716  |              |  |             | 11,507 |              |  |               | 15,223 |            |  |  | 1,751 |  |  |  | 1998 |  |  |  | 5-40 | 
|Oakland Ridge Industrial Center     |  |                                                    | 3,297  |              |  |             | 26,282 |              |  |               | 29,579 |            |  |  | 4,736 |  |  |  | 1999 |  |  |  | 5-40 | 
|Patuxent Alliance 8280              |  |                                                    | 887    |              |  |             | 1,740  |              |  |               | 2,627  |            |  |  | 124   |  |  |  | 2001 |  |  |  | 5-40 | 
|Patuxent Range Road                 |  |                                                    | 1,696  |              |  |             | 5,691  |              |  |               | 7,387  |            |  |  | 1,114 |  |  |  | 1997 |  |  |  | 5-40 | 
|Preston Court                       |  |                                                    | 2,313  |              |  |             | 7,515  |              |  |               | 9,827  |            |  |  | 1,331 |  |  |  | 1997 |  |  |  | 5-40 | 
|The Rotunda                         |  |                                                    | 4,400  |              |  |             | 21,224 |              |  |               | 25,624 |            |  |  | 3,571 |  |  |  | 1999 |  |  |  | 5-40 | 
|Santa Barbara Court                 |  |                                                    | 1,617  |              |  |             | 5,910  |              |  |               | 7,527  |            |  |  | 1,283 |  |  |  | 1997 |  |  |  | 5-40 | 
|Technology I                        |  |                                                    | 1,657  |              |  |             | 5,423  |              |  |               | 7,080  |            |  |  | 727   |  |  |  | 1999 |  |  |  | 5-40 | 
|Technology II                       |  |                                                    | 10,206 |              |  |             | 33,916 |              |  |               | 44,123 |            |  |  | 4,640 |  |  |  | 1999 |  |  |  | 5-40 | 
|Braemar Business Center             |  |                                                    | 1,566  |              |  |             | 5,687  |              |  |               | 7,253  |            |  |  | 1,095 |  |  |  | 1998 |  |  |  | 5-40 | 
|Burnsville Business Center          |  |                                                    | 932    |              |  |             | 3,926  |              |  |               | 4,858  |            |  |  | 925   |  |  |  | 1998 |  |  |  | 5-40 | 
|Corporate Square Industrial         |  |                                                    | 4,024  |              |  |             | 14,596 |              |  |               | 18,620 |            |  |  | 2,985 |  |  |  | 1997 |  |  |  | 5-40 | 
|Edenvale Business Center            |  |                                                    | 775    |              |  |             | 3,371  |              |  |               | 4,146  |            |  |  | 771   |  |  |  | 1998 |  |  |  | 5-40 | 
|Minneapolis Distribution Portfolio  |  |                                                    | 6,079  |              |  |             | 23,030 |              |  |               | 29,109 |            |  |  | 4,134 |  |  |  | 1997 |  |  |  | 5-40 | 
|Mendota Heights                     |  |                                                    | 1,367  |              |  |             | 7,019  |              |  |               | 8,385  |            |  |  | 2,728 |  |  |  | 1998 |  |  |  | 5-40 | 
|Minnetonka Industrial               |  |                                                    | 6,690  |              |  |             | 24,292 |              |  |               | 30,982 |            |  |  | 4,298 |  |  |  | 1998 |  |  |  | 5-40 | 
|Minneapolis Industrial Portfolio IV |  |                                                    | 4,938  |              |  |             | 17,074 |              |  |               | 22,012 |            |  |  | 3,416 |  |  |  | 1997 |  |  |  | 5-40 | 
|Penn James Office Warehouse         |  |                                                    | 1,991  |              |  |             | 7,188  |              |  |               | 9,179  |            |  |  | 1,434 |  |  |  | 1997 |  |  |  | 5-40 | 
|Round Lake Business Center          |  |                                                    | 875    |              |  |             | 3,211  |              |  |               | 4,086  |            |  |  | 641   |  |  |  | 1998 |  |  |  | 5-40 | 
|Twin Cities                         |  |                                                    | 4,873  |              |  |             | 21,198 |              |  |               | 26,071 |            |  |  | 4,221 |  |  |  | 1997 |  |  |  | 5-40 | 
|Chemway Industrial Portfolio        |  |                                                    | 2,875  |              |  |             | 9,676  |              |  |               | 12,551 |            |  |  | 1,721 |  |  |  | 1998 |  |  |  | 5-40 | 
|CLT Logistics Center                |  |                                                    | 6,377  |              |  |             | 24,992 |              |  |               | 31,368 |            |  |  | 156   |  |  |  | 2003 |  |  |  | 5-40 | 
|South Point Business Park           |  |                                                    | 3,130  |              |  |             | 12,164 |              |  |               | 15,294 |            |  |  | 1,902 |  |  |  | 1998 |  |  |  | 5-40 | 
|Janitrol                            |  |                                                    | 1,797  |              |  |             | 5,755  |              |  |               | 7,551  |            |  |  | 916   |  |  |  | 1997 |  |  |  | 5-40 | 
|Cascade Business Center             |  |                                                    | 2,825  |              |  |             | 10,181 |              |  |               | 13,006 |            |  |  | 1,859 |  |  |  | 1998 |  |  |  | 5-40 | 
|Wilsonville                         |  |                                                    | 3,407  |              |  |             | 13,555 |              |  |               | 16,962 |            |  |  | 2,008 |  |  |  | 1998 |  |  |  | 5-40 | 
|Corporate Park/ Hickory Hill        |  |                                                    | 6,789  |              |  |             | 22,548 |              |  |               | 29,337 |            |  |  | 3,534 |  |  |  | 1998 |  |  |  | 5-40 | 

S-8



---



##### Table of Contents



AMB PROPERTY, L.P.






SCHEDULE III


CONSOLIDATED REAL ESTATE AND ACCUMULATED
DEPRECIATION

As of December 31, 2003
(Restated)


|                                    |       |                                                    |    |          |  |      |         |              |  |                         |     |              |  |                |        |           |  |  |        |           |  |  |        |           |  |  |        |         | 
|----------------------------------- | ----- | -------------------------------------------------- | -- | -------- |  | ---- | ------- | ------------ |  | ----------------------- | --- | ------------ |  | -------------- | ------ | --------- |  |  | ------ | --------- |  |  | ------ | --------- |  |  | ------ | ------- | 
|                                    |       |                                                    |    |          |  |      |         |              |  |                         |     |             
|                                    |       |                                                    |    |          |  |      |         |              |  | Initial Cost to Company |     | Costs       
|                                    |       | No. of                                             |    |          |  |      |         |              |  |                         |     | Capitalized 
|                                    |       | Bldgs./                                            |    |          |  |      |         |              |  |                         |     | Building &   |  | Subsequent    
|Property                            |       | Ctrs.                                              |    | Location |  | Type |         | Encumbrances |  | Land                    |     | Improvements |  | to Acquisition
|                                    |       |                                                    |    |          |  |      |         |              |  |                         |     |              |  |               
|                                    |       |                                                   
|                                    |       | (In thousands, except number of buildings/centers)
|Willow Lake Industrial Park         |       |                                                    | 10 |          |  |      | TN      |              |  |                         | IND |              |  |                | 19,488 |           |  |  | 12,415 |           |  |  | 35,990 |           |  |  | 14,258 |        
|Metric Center                       |       |                                                    | 5  |          |  |      | TX      |              |  |                         | IND |              |  |                |       |           |  |  | 10,968 |           |  |  | 32,944 |           |  |  | 1,734  |        
|TechRidge Phase II                  |       |                                                    | 1  |          |  |      | TX      |              |  |                         | IND |              |  |                | 11,277 |           |  |  | 7,261  |           |  |  | 13,484 |           |  |  | 229    |        
|TechRidge Phase IA                  |       |                                                    | 3  |          |  |      | TX      |              |  |                         | IND |              |  |                | 14,825 |           |  |  | 7,132  |           |  |  | 21,396 |           |  |  | 485    |        
|Beltway Distribution                |       |                                                    | 1  |          |  |      | VA      |              |  |                         | IND |              |  |                |       |           |  |  | 4,800  |           |  |  | 15,159 |           |  |  | 5,533  |        
|Dulles Airport  Alliance           |       |                                                    | 5  |          |  |      | VA      |              |  |                         | IND |              |  |                | 20,869 |           |  |  | 3,656  |           |  |  | 6,930  |           |  |  | 16,001 |        
|Peninsula Business Center III       |       |                                                    | 1  |          |  |      | VA      |              |  |                         | IND |              |  |                |       |           |  |  | 992    |           |  |  | 2,976  |           |  |  | 359    |        
|Mexico Guadalajara                  |       |                                                    | 5  |          |  |      | Mexico  |              |  |                         | IND |              |  |                |       |           |  |  | 9,555  |           |  |  | 22,386 |           |  |  | 734    |        
|Mexico Mesquite Distribution Center |       |                                                    | 2  |          |  |      | Mexico  |              |  |                         | IND |              |  |                | 16,994 |           |  |  | 4,192  |           |  |  | 247    |           |  |  | 11,853 |        
|Frankfurt Logistic Center           |       |                                                    | 1  |          |  |      | Germany |              |  |                         | IND |              |  |                |       |           |  |  |       |           |  |  | 19,875 |           |  |  | 639    |        
|Bourget Industrial                  |       |                                                    | 1  |          |  |      | France  |              |  |                         | IND |              |  |                |       |           |  |  | 10,058 |           |  |  | 23,843 |           |  |  | 1,541  |        
|Paris Nord Dist I                   |       |                                                    | 1  |          |  |      | France  |              |  |                         | IND |              |  |                |       |           |  |  | 2,864  |           |  |  | 4,723  |           |  |  | 2,091  |        
|Paris Nord Dist II                  |       |                                                    | 1  |          |  |      | France  |              |  |                         | IND |              |  |                |       |           |  |  | 1,697  |           |  |  | 5,127  |           |  |  | 2,996  |        
|Japan Saitama Distribution Center   |       |                                                    | 2  |          |  |      | Japan   |              |  |                         | IND |              |  |                |       |           |  |  | 8,143  |           |  |  | 28,503 |           |  |  |       |        
|Other Retail Markets                |       |                                                    |    |          |  |      |         |              |  |                         |     |              |  |                |        |           |  |  |        |           |  |  |        |           |  |  |        |        
|Around Lenox                        |       |                                                    | 1  |          |  |      | GA      |              |  |                         | RET |              |  |                | 9,092  |           |  |  | 3,462  |           |  |  | 13,848 |           |  |  | 4,874  |        
|Beacon Centre  Headlands           |       |                                                    | 1  |          |  |      | FL      |              |  |                         | RET |              |  |                |       |           |  |  | 2,523  |           |  |  | 7,669  |           |  |  | 865    |        
|Charles and Chase                   |       |                                                    | 1  |          |  |      | MD      |              |  |                         | RET |              |  |                |       |           |  |  | 751    |           |  |  | 2,287  |           |  |  | 176    |        
|Mazzeo                              |       |                                                    | 1  |          |  |      | MA      |              |  |                         | RET |              |  |                | 3,178  |           |  |  | 1,477  |           |  |  | 4,432  |           |  |  | 231    |        
|Palm Aire                           |       |                                                    | 1  |          |  |      | FL      |              |  |                         | RET |              |  |                |       |           |  |  | 2,279  |           |  |  | 9,720  |           |  |  | 7,775  |        
|                                    |       |                                                    |    |          |  |      |         |              |  |                         |     |              |  |                |        |           |  |  |        |           |  |  |        |           |  |  |        |        
|                                    | Total |                                                    |    | 952      |  |      |         |              |  |                         |     |              |  |                | $      | 1,353,101 |  |  | $      | 1,391,038 |  |  | $      | 3,286,399 |  |  | $      | 614,642 | 
|                                    |       |                                                    |    |          |  |      |         |              |  |                         |     |              |  |                |        |           |  |  |        |           |  |  |        |           |  |  |        |        

[Additional columns below]

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

|                                    |       |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |         |  |  |      |  |  |  |      |  | 
|----------------------------------- | ----- | -------------------------------------------------- | ------ | ------------ |  | ----------- | ------ | ------------ |  | ------------- | ------ | ---------- |  |  | ------ | ------- |  |  | ---- |  |  |  | ---- |  | 
|                                    |       |                                                    |        |              |  |             |        |             
|                                    |       | Gross Amount Carried at 12/31/03                   |        |              |  |             |        |             
|                                    |       |                                                    |        |              |  | Year of     |        | Depreciable 
|                                    |       |                                                    |        | Building &   |  | Total       |        | Accumulated  |  | Construction/ |        | Life      
|Property                            |       | Land                                               |        | Improvements |  | Costs(1)(2) |        | Depreciation |  | Acquisition   |        | (Years)   
|                                    |       |                                                    |        |              |  |             |        |              |  |               |        |           
|                                    |       |                                                    |        |              |  |             |        | (Restated)   |  |               |        | (Restated)
|                                    |       |                                                   
|                                    |       | (In thousands, except number of buildings/centers)
|Willow Lake Industrial Park         |       |                                                    | 12,415 |              |  |             | 50,248 |              |  |               | 62,663 |            |  |  | 12,418 |         |  |  | 1998 |  |  |  | 5-40 | 
|Metric Center                       |       |                                                    | 10,968 |              |  |             | 34,678 |              |  |               | 45,646 |            |  |  | 5,634  |         |  |  | 1997 |  |  |  | 5-40 | 
|TechRidge Phase II                  |       |                                                    | 7,261  |              |  |             | 13,714 |              |  |               | 20,975 |            |  |  | 944    |         |  |  | 2001 |  |  |  | 5-40 | 
|TechRidge Phase IA                  |       |                                                    | 7,132  |              |  |             | 21,880 |              |  |               | 29,012 |            |  |  | 1,768  |         |  |  | 2000 |  |  |  | 5-40 | 
|Beltway Distribution                |       |                                                    | 4,800  |              |  |             | 20,692 |              |  |               | 25,492 |            |  |  | 3,631  |         |  |  | 1999 |  |  |  | 5-40 | 
|Dulles Airport  Alliance           |       |                                                    | 3,656  |              |  |             | 22,931 |              |  |               | 26,587 |            |  |  | 663    |         |  |  | 2000 |  |  |  | 5-40 | 
|Peninsula Business Center III       |       |                                                    | 992    |              |  |             | 3,334  |              |  |               | 4,326  |            |  |  | 479    |         |  |  | 1998 |  |  |  | 5-40 | 
|Mexico Guadalajara                  |       |                                                    | 9,555  |              |  |             | 23,120 |              |  |               | 32,674 |            |  |  | 580    |         |  |  | 2002 |  |  |  | 5-40 | 
|Mexico Mesquite Distribution Center |       |                                                    | 4,192  |              |  |             | 12,100 |              |  |               | 16,292 |            |  |  | 64     |         |  |  | 2003 |  |  |  | 5-40 | 
|Frankfurt Logistic Center           |       |                                                    |       |              |  |             | 20,513 |              |  |               | 20,513 |            |  |  | 20     |         |  |  | 2003 |  |  |  | 5-40 | 
|Bourget Industrial                  |       |                                                    | 10,367 |              |  |             | 25,075 |              |  |               | 35,442 |            |  |  | 100    |         |  |  | 2003 |  |  |  | 5-40 | 
|Paris Nord Dist I                   |       |                                                    | 3,572  |              |  |             | 6,105  |              |  |               | 9,677  |            |  |  | 80     |         |  |  | 2002 |  |  |  | 5-40 | 
|Paris Nord Dist II                  |       |                                                    | 2,091  |              |  |             | 7,729  |              |  |               | 9,820  |            |  |  | 52     |         |  |  | 2002 |  |  |  | 5-40 | 
|Japan Saitama Distribution Center   |       |                                                    | 8,143  |              |  |             | 28,503 |              |  |               | 36,646 |            |  |  | 59     |         |  |  | 2003 |  |  |  | 5-40 | 
|Other Retail Markets                |       |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |         |  |  |      |  |  |  |      | 
|Around Lenox                        |       |                                                    | 3,462  |              |  |             | 18,722 |              |  |               | 22,184 |            |  |  | 2,851  |         |  |  | 1998 |  |  |  | 5-40 | 
|Beacon Centre  Headlands           |       |                                                    | 2,523  |              |  |             | 8,533  |              |  |               | 11,056 |            |  |  | 694    |         |  |  | 2000 |  |  |  | 5-40 | 
|Charles and Chase                   |       |                                                    | 751    |              |  |             | 2,463  |              |  |               | 3,213  |            |  |  | 289    |         |  |  | 1998 |  |  |  | 5-40 | 
|Mazzeo                              |       |                                                    | 1,477  |              |  |             | 4,663  |              |  |               | 6,140  |            |  |  | 673    |         |  |  | 1998 |  |  |  | 5-40 | 
|Palm Aire                           |       |                                                    | 2,452  |              |  |             | 17,321 |              |  |               | 19,773 |            |  |  | 2,125  |         |  |  | 1996 |  |  |  | 5-40 | 
|                                    |       |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |         |  |  |      |  |  |  |      | 
|                                    | Total |                                                    | $      | 1,403,807    |  |             | $      | 3,888,272    |  |               | $      | 5,292,079  |  |  | $      | 485,559 |  |  |      |  |  |  |      |  | 
|                                    |       |                                                    |        |              |  |             |        |              |  |               |        |            |  |  |        |         |  |  |      |  |  |  |      | 

S-9



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|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(1) | Reconciliation of total cost to consolidated
    balance sheet caption as of December 31, 2003:

|                           |                                 |   |           |           | 
|-------------------------- | ------------------------------- | - | --------- | --------- | 
|Total per Schedule III(3)  |                                 | $ | 5,292,079 |          
|Construction in process(4) |                                 |   | 199,628   |          
|                           |                                 |   |           |          
|                           | Total investments in properties |   | $         | 5,491,707 | 
|                           |                                 |   |           |          



|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(2) | As of December 31, 2003, the aggregate cost
    for federal income tax purposes of investments in real estate
    was $5,201,590.        
|   
|(3) | A summary of activity for real estate and
    accumulated depreciation for the year ended December 31,
    2003 (restated) is as follows:

|                           |                                                             |  |   |           |  
|-------------------------- | ----------------------------------------------------------- |  | - | --------- | -
|Investments in Properties: |                                                             |  |   |          
|                           | Balance at beginning of year                                |  | $ | 4,922,782 |  
|                           | Acquisition of properties                                   |  |   | 523,994   |  
|                           | Improvements, including development properties              |  |   | 264,272   |  
|                           | Transfer basis adjustment                                   |  |   | 23,388    |  
|                           | Asset impairment                                            |  |   | (5,251    | )
|                           | Divestiture of properties                                   |  |   | (339,605  | )
|                           | Adjustment for properties held for divestiture              |  |   | 102,127   |  
|                           |                                                             |  |   |          
|                           | Balance at end of year                                      |  | $ | 5,491,707 |  
|                           |                                                             |  |   |          
|Accumulated Depreciation:  |                                                             |  |   |          
|                           | Balance at beginning of year                                |  | $ | 368,205   |  
|                           | Depreciation expense, including discontinued
    operations |  |   | 139,284   |  
|                           | Properties divested                                         |  |   | (27,937   | )
|                           | Adjustment for properties held for divestiture              |  |   | 6,007     |  
|                           |                                                             |  |   |          
|                           | Balance at end of year                                      |  | $ | 485,559   |  
|                           |                                                             |  |   |          



|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(4) | Includes $112.2 million of fundings for
    development projects as of December 31, 2003.

S-10



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##### Table of Contents






EXHIBIT INDEX

|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                 
|------- | - | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 3 | .1          |  | Tenth Amended and Restated Agreement of Limited
    Partnership of AMB Property, L.P. dated as of November 26,
    2003 (incorporated by reference to Exhibit 3.2 of AMB
    Property, L.P.s Current Report on Form 8-K filed on
    November 26, 2003).                                                                                       
|        | 4 | .1          |  | $30,000,000 7.925% Fixed Rate Note No. 1
    dated August 18, 2000, attaching the Parent Guarantee dated
    August 18, 2000 (incorporated by reference to
    Exhibit 4.5 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2000).                                                                        
|        | 4 | .2          |  | $25,000,000,000 7.925% Fixed Rate Note No. 2
    dated September 12, 2000, attaching the Parent Guarantee
    dated September 12, 2000 (incorporated by reference to
    Exhibit 4.6 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2000).                                                              
|        | 4 | .3          |  | $50,000,000 8.00% Fixed Rate Note No. 3
    dated October 26, 2000, attaching the Parent Guarantee
    dated October 26, 2000 (incorporated by reference to
    Exhibit 4.7 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2000).                                                                       
|        | 4 | .4          |  | $25,000,000 8.000% Fixed Rate Note No. 4
    dated October 26, 2000, attaching the Parent Guarantee
    dated October 26, 2000 (incorporated by reference to
    Exhibit 4.8 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2000).                                                                      
|        | 4 | .5          |  | $50,000,000 7.20% Fixed Rate Note No. 5
    dated December 19, 2000, attaching the Parent Guarantee dated
    December 19, 2000 (incorporated herein by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 8, 2001).                                                                          
|        | 4 | .6          |  | $50,000,000 7.20% Fixed Rate Note No. 6
    dated December 19, 2000, attaching the Parent Guarantee dated
    December 19, 2000 (incorporated herein by reference to
    Exhibit 4.2 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 8, 2001).                                                                          
|        | 4 | .7          |  | $50,000,000 7.20% Fixed Rate Note No. 7
    dated December 19, 2000, attaching the Parent Guarantee dated
    December 19, 2000 (incorporated herein by reference to
    Exhibit 4.3 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 8, 2001).                                                                          
|        | 4 | .8          |  | Indenture dated as of June 30, 1998, by and
    among AMB Property, L.P., AMB Property Corporation and State
    Street Bank and Trust Company of California, N.A., as trustee
    (incorporated by reference to Exhibit 4.1 of AMB Property,
    L.P.s Registration Statement on Form S-11
    (No. 333-49163)).                              
|        | 4 | .9          |  | First Supplemental Indenture dated as of
    June 30, 1998 by and among AMB Property, L.P., AMB Property
    Corporation and State Street Bank and Trust Company of
    California, N.A., as trustee (incorporated by reference to
    Exhibit 4.2 of AMB Property, L.P.s Registration
    Statement on Form S-11 (No. 333-49163)).            
|        | 4 | .10         |  | Second Supplemental Indenture dated as of
    June 30, 1998, by and among AMB Property, L.P., AMB
    Property Corporation and State Street Bank and Trust Company of
    California, N.A., as trustee (incorporated by reference to
    Exhibit 4.3 of AMB Property, L.P.s Registration
    Statement on Form S-11 (No. 333-49163)).          
|        | 4 | .11         |  | Third Supplemental Indenture dated as of
    June 30, 1998, by and among AMB Property, L.P., AMB
    Property Corporation and State Street Bank and Trust Company of
    California, N.A., as trustee (incorporated by reference to
    Exhibit 4.4 of AMB Property, L.P.s Registration
    Statement on Form S-11 (No. 333-49163)).           
|        | 4 | .12         |  | Fourth Supplemental Indenture, by and among AMB
    Property, L.P., AMB Property Corporation and State Street Bank
    and Trust Company of California, N.A., as trustee (incorporated
    by reference to Exhibit 4.1 of AMB Property, L.P.s
    Current Report on Form 8-K/A filed on November 9,
    2000).                                 
|        | 4 | .13         |  | Fifth Supplemental Indenture dated as of
    May 7, 2002, by and among AMB Property, L.P., AMB Property
    Corporation and State Street Bank and Trust Company of
    California, N.A., as trustee (incorporated by reference to
    Exhibit 4.15 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2002).
|        | 4 | .14         |  | Specimen of 7.10% Notes due 2008 (included
    in the First Supplemental Indenture incorporated by reference as
    Exhibit 4.2 of AMB Property, L.P.s Registration
    Statement on Form S-11 (No. 333-49163)).                                                                                                                               



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .15         |  | Specimen of 7.50% Notes due 2018 (included
    in the Second Supplemental Indenture incorporated by reference
    as Exhibit 4.3 of AMB Property, L.P.s Registration
    Statement on Form S-11 (No. 333-49163)).                                                                                                                                                                                                                                                                                                                                     
|        | 4  | .16         |  | Specimen of 6.90% Reset Put Securities due 2015
    (included in the Third Supplemental Indenture incorporated by
    reference as Exhibit 4.4 of AMB Property, L.P.s
    Registration Statement on Form S-11 (No. 333-49163)).                                                                                                                                                                                                                                                                                                                       
|        | 4  | .17         |  | $25,000,000 6.90% Fixed Rate Note No. 8
    dated January 9, 2001, attaching the Parent Guarantee dated
    January 9, 2001 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 31, 2001).                                                                                                                                                                                                                                                                                           
|        | 4  | .18         |  | $50,000,000 7.00% Fixed Rate Note No. 9
    dated March 7, 2001, attaching the Parent Guarantee dated
    March 7, 2001 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on March 16, 2001).                                                                                                                                                                                                                                                                                                 
|        | 4  | .19         |  | $25,000,000 6.75% Fixed Rate Note No. 10
    dated September 6, 2001, attaching the Parent Guarantee
    dated September 6, 2001 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on September 18, 2001).                                                                                                                                                                                                                                                                                    
|        | 4  | .20         |  | $20,000,000 5.90% Fixed Rate Note No. 11
    dated January 17, 2002, attaching the Parent Guarantee dated
    January 17, 2002 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 23, 2002).                                                                                                                                                                                                                                                                                        
|        | 4  | .21         |  | $75,000,000 5.53% Fixed Rate Note No. B-1 dated
    November 10,2003, attaching the Parent Guarantee dated
    November 10, 2003 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Quarterly Report
    on Form 10-Q for the quarter ended September 30, 2003).                                                                                                                                                                                                                                                                    
|        | 4  | .22         |  | $50,000,000 Floating Rate Note No. B-1 dated
    November 21, 2003, attaching the Parent Guarantee dated
    November 21, 2003 (incorporated by reference to
    Exhibit 4.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on November 21, 2003).                                                                                                                                                                                                                                                                                       
|        | 10 | .1          |  | Distribution Agreement dated May 7, 2002, by
    and among AMB Property Corporation, AMB Property, L.P., Morgan
    Stanley & Co. Incorporated, A.G. Edwards &
    Sons, Inc., Banc of America Securities LLC, Bear,
    Stearns & Co. Inc., Commerzbank Capital Markets Corp.,
    First Union Securities, Inc., J.P. Morgan Securities Inc.,
    Lehman Brothers Inc., and PNC Capital Markets, Inc.
    (incorporated by reference to Exhibit 10.1 of AMB Property,
    L.P.s Annual Report on Form 10-K for the year ended
    December 31, 2003).
|        | 10 | .2          |  | Terms Agreement dated as of December 14,
    2000, by and between Morgan Stanley & Co., Incorporated
    and J.P. Morgan Securities Inc. and AMB Property, L.P.
    (incorporated herein by reference to Exhibit 1.1 of AMB
    Property, L.P.s current Report on Form 8-K filed on
    January 8, 2001).                                                                                                                                                                                                                                             
|        | 10 | .3          |  | Terms Agreement dated as of January 4, 2001,
    by and between A.G. Edwards & Sons, Inc. and AMB
    Property, L.P. (incorporated herein by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 31, 2001).                                                                                                                                                                                                                                                                                           
|        | 10 | .4          |  | Terms Agreement dated as of March 2, 2001,
    by and among First Union Securities, Inc., AMB Property, L.P.
    and AMB Property Corporation (incorporated by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on March 16, 2001).                                                                                                                                                                                                                                                                           
|        | 10 | .5          |  | Form of Change in Control and Noncompetition
    Agreement between AMB Property Corporation and Executive
    Officers (incorporated by reference to Exhibit 10.6 of AMB
    Property, L.P.s Annual Report on Form 10-K for the
    year ended December 31, 1998).                                                                                                                                                                                                                                                                                    
|        | 10 | .6          |  | Twelfth Amended and Restated Agreement of Limited
    Partnership of AMB Property II, L.P., dated as of
    November 14, 2003 (incorporated by reference to
    Exhibit 10.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on November 17, 2003).                                                                                                                                                                                                                                                                                       



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .7          |  | Amended and Restated Revolving Credit Agreement,
    dated as of December 11, 2002, by and among AMB Property,
    L.P., the banks listed therein, JPMorgan Chase Bank, as
    administrative agent, J.P. Morgan Europe Limited, as
    administrative agent for alternate currencies, Bank of America,
    N.A., as syndication agent, J.P. Morgan Securities Inc. and
    Banc of America Securities LLC, as joint lead arrangers and
    joint bookrunners, Bank One, NA, Commerzbank Aktiengesellschaft,
    New York and Grand Cayman Branches and Wachovia Bank, N.A., as
    documentation agents, PNC Bank, National Association, The Bank
    of Nova Scotia, acting through its San Francisco Agency,
    and Wells Fargo Bank, N.A., as managing agents, and Key Bank
    National Association, as co-agent (incorporated by reference to
    Exhibit 10.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on December 18, 2002).
|        | 10 | .8          |  | Amendment to Amended and Restated Credit
    Agreement dated as of July 10, 2003, by and among AMB
    Property, L.P., the banks listed therein, JP Morgan Chase Bank,
    as administrative agent, Bank of America, N.A., as syndication
    agent, and Bank One, N.A., Commerzbank, A.G., New York and Grand
    Cayman Branches, and Wachovia Bank, as documentation agent
    (incorporated by reference to Exhibit 10.3 of AMB Property,
    L.P.s Quarterly Report on Form 10-Q for the quarter
    ended June 30, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 10 | .9          |  | Guaranty of Payment, dated as of
    December 11, 2002, by AMB Property Corporation for the
    benefit of JP Morgan Chase Bank, as administrative agent, and
    J.P. Morgan Europe Limited, as administrative agent for
    alternate currencies, for the banks listed on the signature page
    to the Revolving Credit Agreement (incorporated by reference to
    Exhibit 10.2 of AMB Property, L.P.s Current Report on
    Form 8-K filed on December 18, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 10 | .10         |  | Qualified Borrower Guaranty, dated as of
    December 11, 2002, by AMB Property, L.P. for the benefit of
    JPMorgan Chase Bank and J.P. Morgan Europe Limited, as
    administrative agents for the banks listed on the signature page
    to the Revolving Credit Agreement (incorporated by reference to
    Exhibit 10.3 of AMB Property, L.P.s Current Report on
    Form 8-K filed on December 18, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .11         |  | Terms Agreement dated as of August 30, 2001,
    by and among Lehman Brothers Inc., AMB Property, L.P., and AMB
    Property Corporation (incorporated by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on September 18, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10 | .12         |  | Terms Agreement dated as of January 14,
    2002, by and among Lehman Brothers Inc., AMB Property, L.P., and
    AMB Property Corporation (incorporated by reference to
    Exhibit 1.1 of AMB Property, L.P.s Current Report on
    Form 8-K filed on January 23, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10 | .13         |  | Third Amended and Restated 1997 Stock Option and
    Incentive Plan of AMB Property Corporation and AMB Property,
    L.P. (incorporated by reference to Exhibit 10.22 of AMB
    Property, L.P.s Annual Report on Form 10-K for the
    year ended December 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 10 | .14         |  | Amendment No. 1 to the Third Amended and
    Restated 1997 Stock Option and Incentive Plan of AMB Property
    Corporation and AMB Property, L.P. (incorporated by reference to
    Exhibit 10.23 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .15         |  | 2002 Stock Option and Incentive Plan of AMB
    Property Corporation and AMB Property, L.P. (incorporated by
    reference to Exhibit 10.21 of AMB Property, L.P.s
    Annual Report on Form 10-K for the year ended
    December 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .16         |  | Amended and Restated AMB Nonqualified Deferred
    Compensation Plan (incorporated by reference to
    Exhibit 4.17 of AMB Property, L.P.s Registration
    Statement on Form S-8 (No.333-100214)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10 | .17         |  | Note Purchase Agreement dated as of
    November 5, 2003, by and between AMB Property, L.P. and
    Teachers Insurance and Annuity Association of America
    (incorporated by reference to Exhibit 99.1 of AMB Property,
    L.P.s Current Report on Form 8-K filed on
    November 6, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .18         |  | Agreement of Sale made as of October 6,
    2003, by and between AMB Property, L.P., International Airport
    Centers L.L.C. and certain affiliated entities (incorporated by
    reference to Exhibit 99.3 of AMB Property, L.P.s
    Current Report on Form 8-K filed on November 6, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 21 | .1          |  | Subsidiaries of AMB Property, L.P. (incorporated
    by reference to Exhibit 21.1 of AMB Property, L.P.s
    Annual Report on Form 10-K for the year ended
    December 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 23 | .1          |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 24 | .1          |  | Powers of Attorney (incorporated by reference to
    Exhibit 24.1 of AMB Property, L.P.s Annual Report on
    Form 10-K for the year ended December 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 31 | .1          |  | Rule 13a-14 (a)/15d-14 (a) Certifications
    dated November 9, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 32 | .1          |  | 18 U.S.C. § 1350 Certifications
    dated November 9, 2004. The certifications in this exhibit
    are being furnished solely to accompany this report pursuant to
    18 U.S.C. § 1350, and are not being filed for
    purposes of Section 18 of the Securities Exchange Act of
    1934, as amended, and are not to be incorporated by reference
    into any of our filings, whether made before or after the date
    hereof, regardless of any general incorporation language in such
    filing.