Exhibit 99.1  MACK-GREEN-GALE LLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AT DECEMBER 31,
2008 AND 2007 AND CONSOLIDATED STATEMENTS OF OPERATIONS, CHANGES IN MEMBERS CAPITAL AND CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,
2008 AND 2007 AND FOR THE PERIOD FROM MAY 9, 2006
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2006


MACK-GREEN-GALE LLC AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS  Page No.Report of
  Independent Registered Public Accounting Firm
  1Consolidated
  Balance Sheets
  2Consolidated
  Statements of Operations
  3Consolidated
  Statements of Changes in Members Capital
  4Consolidated
  Statements of Cash Flows
  5Notes to
  Consolidated Financial Statements
  6 - 18


REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM  To the Members of Mack-Green-Gale LLC  We have audited the accompanying consolidated balance sheets of
Mack-Green-Gale LLC and Subsidiaries (the Company) as of December 31,
2008 and 2007 and the related consolidated statements of operations, changes in
members capital and cash flows for the years ended December 31, 2008 and
2007, and for the period May 9, 2006 (commencement of operations) through December 31,
2006.  These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.  We conducted our audits in
accordance with auditing standards generally accepted in the United States of
America.  Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.  An audit includes consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial
reporting. Accordingly, we express no such opinion.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits
provide a reasonable basis for our opinion.  In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 2008 and 2007, and the results of their operations and their
cash flows for the years ended December 31, 2008, 2007, and for the period May 9,
2006 (commencement of operations) through December 31, 2006, in conformity
with accounting principles generally accepted in the United States of America.   /s/Cornerstone Accounting Group LLPNew York, New YorkFebruary 9, 2009


MACK-GREEN-GALE LLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands)  December 31,2008
  
  2007ASSETSInvestment in real estate, net of
  accumulated depreciation of $34,332 and $21,612
  
  $
  326,912
  
  $
  368,028Cash and cash equivalents
  
  2,184
  
  10,794Restricted cash
  
  10,932
  
  9,141Accounts receivable, net of allowance for
  doubtful accounts of $412 and $1,216
  
  367
  
  560Other assets, net of accumulated
  amortization of $2,429 and $1,484
  
  14,967
  
  10,751Acquired favorable lease intangibles, net
  of accumulated amortization of $18,877 and $12,582
  
  16,941
  
  24,434$
  372,303
  
  $
  423,708LIABILITIES
  AND MEMBERS CAPITALLiabilitiesMortgage notes payable
  
  $
  276,752
  
  $
  281,746Accounts payable and accrued expenses
  
  8,403
  
  8,469Tenant security deposits
  
  789
  
  677Prepaid rent
  
  1,701
  
  2,047Acquired unfavorable lease intangibles, net
  of accumulated amortization of $7,057 and $4,415
  
  12,912
  
  15,554300,557
  
  308,493Minority Interest
  
  2,384
  
  3,865Commitments and ContingenciesMembers Capital
  
  69,362
  
  111,350$
  372,303
  
  $
  423,708  The accompanying notes are an integral part of these consolidated
financial statements.  2


MACK-GREEN-GALE LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollar amounts in thousands)  Year ended December 31,
  
  Period from
  May 9, 2006
  (commencement of
  operations)
  through2008
  
  2007
  
  December 31, 2006Revenues:Base Rents
  
  $
  47,055
  
  $
  47,708
  
  $
  29,538Escalations and other tenant recoveries
  
  2,703
  
  3,475
  
  1,653Other income
  
  1,527
  
  422
  
  2,14451,285
  
  51,605
  
  33,335Expenses:Real estate taxes
  
  5,384
  
  6,246
  
  3,871Other operating expenses
  
  15,081
  
  15,763
  
  9,791Interest
  
  17,381
  
  21,218
  
  13,527Depreciation and amortization
  
  20,433
  
  19,437
  
  14,243Selling, general and administrative
  
  811
  
  1,768
  
  517Impairment charge
  
  32,294
  
  
  
  91,384
  
  64,432
  
  41,949Gain on sale of investment in joint venture
  
  
  
  1,054
  
  Minority interest
  
  1,357
  
  415
  
  298Loss from continuing operations
  
  (38,742
  )
  (11,358
  )
  (8,316
  )Discontinued operations (net of minority
  interest):Loss from operations of properties
  
  
  
  (3,261
  )
  (4,775
  )(Loss)/Gain from sale of real estate
  
  
  
  (21,559
  )
  422Net Loss
  
  $
  (38,742
  )
  $
  (36,178
  )
  $
  (12,669
  )  The accompanying notes are an integral part of these consolidated
financial statements.  3


MACK-GREEN-GALE LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS
CAPITAL (Dollar amounts in thousands)  Mack-Cali
  Ventures
  L.L.C.
  
  Gale SLG NJ
  LLC
  
  TotalInitial Capital Contributions
  
  $
  110,802
  
  $
  62,343
  
  $
  173,145Distributions
  
  (84
  )
  (7,992
  )
  (8,076
  )Net loss
  
  (4,917
  )
  (7,752
  )
  (12,669
  )Members Capital, December 31, 2006
  
  $
  105,801
  
  $
  46,599
  
  $
  152,400Distributions
  
  (51
  )
  (4,821
  )
  (4,872
  )Net loss
  
  (6,222
  )
  (29,956
  )
  (36,178
  )Members Capital, December 31, 2007
  
  $
  99,528
  
  $
  11,822
  
  $
  111,350Distributions
  
  (32
  )
  (3,214
  )
  (3,246
  )Net loss
  
  (25,374
  )
  (13,368
  )
  (38,742
  )Members Capital, December 31, 2008
  
  $
  74,122
  
  $
  (4,760
  )
  $
  69,362  The accompanying notes are an integral part of these consolidated
financial statements.  4


MACK-GREEN-GALE LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Dollar amounts in thousands)  Year ended December 31,
  
  Period from
  May 9, 2006
  through
  December 31,2008
  
  2007
  
  2006Cash Flows from Operating Activities:Net Loss
  
  $
  (38,742
  )
  $
  (36,178
  )
  $
  (12,669
  )Adjustments to reconcile net loss to net
  cash provided by (used in) operating activities:Depreciation and amortization
  
  20,433
  
  24,751
  
  21,129Amortization of deferred loan cost
  
  264
  
  1,437
  
  725Amortization of acquired above and below
  market lease intangibles
  
  (2,181
  )
  (2,651
  )
  (2,124
  )Minority interest in loss
  
  (1,357
  )
  (1,289
  )
  (451
  )Impairment charge
  
  32,294
  
  
  
  Gain on sale of investment in joint venture
  
  
  
  (1,054
  )
  Loss (gain) on sale of real estate
  
  
  
  22,318
  
  (437
  )Restricted cash
  
  (1,791
  )
  4,501
  
  (13,642
  )Accounts receivable, net
  
  193
  
  (142
  )
  (418
  )Unbilled rents receivable
  
  (1,319
  )
  (4,252
  )
  (4,128
  )Deferred lease costs
  
  (4,029
  )
  (645
  )
  (3,164
  )Other assets
  
  187
  
  661
  
  (2,002
  )Accounts payable and accrued expenses
  
  332
  
  (4,752
  )
  9,494Tenant security deposits
  
  112
  
  69
  
  609Prepaid rent
  
  (346
  )
  (374
  )
  2,421Due to affiliates
  
  (398
  )
  
  
  3,727Net cash provided by (used in) operating
  activities
  
  3,652
  
  2,400
  
  (930
  )Cash Flows (Used In) Provided by Investing
  Activities:Net proceeds from sale of real estate
  
  
  
  81,864
  
  559Net proceeds from sale of investment in
  joint venture
  
  
  
  9,787
  
  Investment in joint venture
  
  
  
  446
  
  (9,180
  )Return of purchase price
  
  358
  
  459
  
  334Additions to real estate and intangible
  assets
  
  (4,256
  )
  (4,022
  )
  (515,127
  )Net cash (used in) provided by investing
  activities
  
  (3,898
  )
  88,534
  
  (523,414
  )Cash Flows (Used In) Provided by Financing
  Activities:Increase in deferred financing costs
  
  
  
  
  
  (3,344
  )Contributions from members
  
  
  
  
  
  173,145Contributions from minority interest
  
  
  
  
  
  6,128Mortgage notes payable
  
  
  
  3,275
  
  527,000Principal repayments on mortgage notes
  payable
  
  (4,994
  )
  (84,892
  )
  (163,637
  )Distributions to members
  
  (3,246
  )
  (4,872
  )
  (8,076
  )Distributions to minority interest
  
  (114
  )
  (171
  )
  (287
  )Redemptions
  
  (10
  )
  (55
  )
  (10
  )Net cash (used in) provided by financing
  activities
  
  (8,364
  )
  (86,715
  )
  530,919Net change in cash and cash equivalents
  
  (8,610
  )
  4,219
  
  6,575Cash and cash equivalents, beginning of
  period
  
  10,794
  
  6,575
  
  Cash and cash equivalents, end of period
  
  $
  2,184
  
  $
  10,794
  
  $
  6,575Supplemental Disclosure of Cash Flow
  Information:Cash paid during the period for interest
  
  $
  17,306
  
  $
  25,635
  
  $
  14,930  The accompanying notes are an integral part of these consolidated
financial statements.  5


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  1.ORGANIZATION AND RELATED MATTERS  Mack-Green-Gale LLC, together with its subsidiaries, (the Company), a
Delaware limited liability company, was established as a joint venture between
Mack-Cali Ventures L.L.C. (the CLI Member) and Gale SLG NJ LLC (the Gale/SLG
Member) to acquire 100% of the membership interests in Gale SLG NJ GP LLC, a
Delaware limited liability company and the 0.9600% general and 95.6025% limited
partnership interests in the Gale SLG NJ Operating Partnership, L.P.  a.Significant
Transactions  On December 18, 2007, eight properties located in Troy, Michigan
were sold for $83,500.  Third-party debt
allocated to the properties in the amount of $78,886 was repaid and a net loss
of $21,559 (net of $759 in minority interest) was recognized on the sale.  On July 16, 2007, the membership interest in Transwestern SL Gale
Naperville, LLC, a joint venture, was sold for $9,956 and the note payable of
$5,350 was repaid.  A net gain of $1,054
was recognized on the sale.  On August 3, 2006, a parcel of land located at 5600 New King
Street in Troy, Michigan was sold for $559 and a net gain of $422 (net of $15
in minority interest) was recognized on the sale.  b.Other
Matters  At December 31, 2008, a summary of the real estate by regional
market/park where the Companys assets are located are as follows:  Aggregate
  Square Feet
  
  Number of
  Properties(Unaudited)
  
  (Unaudited)New Jersey:Lyndhurst
  
  242,517
  
  2Parsippany
  
  456,514
  
  3Roseland
  
  862,972
  
  6Bridgewater
  
  198,376
  
  1Princeton
  
  293,761
  
  3Warren
  
  120,528
  
  1Branchburg
  
  63,213
  
  1Total
  
  2,237,881
  
  17  6


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  2.SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES  a.Principles
of Consolidation  The accompanying consolidated financial statements include the
consolidated accounts of the Company.  All
significant inter-company accounts and transactions have been eliminated.  b.Reclassifications  Certain prior year balances have been reclassified in order to conform
to the current year presentation.  c.Use
of Estimates  The preparation of the consolidated financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and accompanying notes.  Actual results could differ from those
estimates.  d.Cash
Equivalents  Cash equivalents consist of short-term, highly liquid investments,
which are readily convertible into cash, and have original maturity dates of
three months or less at the time of purchase.  e.Accounts
Receivable  The Company periodically performs a detailed review of amounts due from
tenants and clients to determine if accounts receivable balances are impaired
based on factors affecting the collectibility of those balances.  The Companys estimate of the allowance for
doubtful accounts requires the Company to exercise significant judgment about
the timing, frequency and severity of collection losses, which affects the
allowance and net income.  f.Restricted
Cash  Restricted cash is comprised of tenant security deposits and escrow and
reserve funds for debt service, real estate taxes, property insurance,
operating expenses, capital improvements, tenant improvements and leasing
costs, established pursuant to certain mortgage financing arrangements and is
comprised of the following:  December 31,2008
  
  2007Security deposits
  
  $
  866
  
  $
  741Escrow and other reserve funds
  
  10,066
  
  8,400$
  10,932
  
  $
  9,141  7


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  2.SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  g.Rental
Properties and Intangible Assets  The Company assesses the fair value of acquired assets (including land,
buildings and improvements, and identified intangibles such as above and below
market leases and acquired in-place leases) and acquired liabilities in
accordance with SFAS No. 141: Business Combinations and allocates the
purchase price based on these assessments. 
The Company assesses fair value based on estimated cash flow projections
that utilize appropriate discount and capitalization rates and available market
information.  Estimates of future cash
flows are based on a number of factors including the historical operating
results, known trends, and market/economic conditions that may affect the
property.  The cost of maintenance and repairs is charged to expense as incurred.
Depreciation is computed on a straight-line basis over the estimated useful
lives of the assets as follows:  Buildings and improvements
  40 yearsLand improvements
  15 yearsTenant improvements
  Lesser of lease term or estimated useful lifeFurniture, fixtures and equipment
  5-7 years  Above and below market lease values for acquired properties are
recorded based on the present value (using a discount rate which reflects the
risks associated with the leases acquired) of the difference between (i) the
contractual amounts to be paid pursuant to each in place lease and (ii) managements
estimate of the fair market lease rates for each corresponding in-place lease,
measured over a period equal to the remaining term of the lease.  The capitalized above and below market lease
values are amortized as a reduction or addition to base rental revenue over the
remaining term of the respective leases.  Other intangible assets acquired include amounts for the in-place lease
values which are based on managements evaluation of the specific
characteristics of each tenants lease. Factors considered by management in its
analysis of in-place lease values include an estimate of carrying costs during
the hypothetical expected time it would take management to find a tenant to
lease the space for the existing lease term (a lease-up period) considering
current market conditions, and costs to execute similar leases.  Management estimates carrying costs,
including such factors as real estate taxes, insurance and other operating
expenses during the expected lease-up period, considering current market
conditions.  In estimating costs to
execute similar leases, management considers leasing commissions, legal and
other related expenses.  The value of
in-place leases is amortized to expense over the remaining initial terms of the
respective leases.  8


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  2.  SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)  g.Rental Properties and
Intangible Assets (continued)  The Company reviews real estate and the related intangible assets for
impairment whenever events or changes in circumstances indicate that the
carrying value of assets to be held and used may not be recoverable. In
performing the review for recoverability of carrying value of property held for
use, estimates are made of the future undiscounted cash flows from each of the
properties during the period the property will be held and upon its eventual
disposition.  If the expected future
undiscounted cash flows are less than the carrying value of such property, an
impairment charge is recognized resulting in a write-down of the carrying value
of the property to an amount based on its fair value.  Property held for sale is reported at the lower of its carrying amount
or its estimated fair value less costs to sell. 
Once property is held for sale, depreciation expense is no longer
recorded.  The operations of the property
held for sale or property which has been sold are reported in discontinued
operations in the accompanying consolidated statements of operations and assets
and liabilities attributable to property held for sale are classified
separately in the consolidated balance sheets for all periods presented.  For property to be disposed of, an impairment charge is recognized when
the fair value of the property, less the estimated costs to sell, is less than
the carrying amount of the property measured at the time the Company makes a
commitment to sell the property.  h.Other Assets  Deferred lease costs consist of commissions paid on leases, inducements
paid to tenants and other costs directly attributable to acquiring and
effectuating lease agreements, all of which are capitalized and amortized using
the straight-line method over the lives of the related lease terms.  Deferred financing costs consist of fees and costs incurred to obtain
financing and are amortized over the terms of the respective agreement.
Unamortized deferred financing costs are expensed when the associated debt is
retired prior to maturity.  i.Revenue and Profit
Recognition  Rental revenue is recognized on a straight-line basis over the
non-cancelable term of the lease. The excess of rents so recognized over
amounts contractually due pursuant to the underlying leases is included in
other assets on the accompanying consolidated balance sheets.  Sales of real estate assets are recognized at closing subject to the
receipt of adequate down payment and the meeting of other requirements in
accordance with applicable accounting guidelines.  Gains and losses recognized on sales of real estate in which the
Company has no continuing involvement are classified as discontinued operations
in the consolidated statements of operations.  9


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  2.   SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)  j.Income Taxes  The Company is organized as limited partnerships and limited liability
companies and, accordingly, no provision is made for federal or state income
taxes, since income or loss of the Company must be reported by the respective
Members on their individual tax returns.  The tax reporting entitys tax return is subject to examination by
federal and state taxing authorities. 
Because many types of transactions are susceptible to varying
interpretations under federal and state income tax laws and regulations, the
amounts reported in the accompanying consolidated financials statements may be
subject to change at a later date upon final determination by the respective
taxing authorities.  In July 2006, the FASB issued FIN 48, Accounting for Uncertainty
in Income Taxes - an interpretation of FASB Statement No. 109, Accounting
for Income Taxes.  This interpretation
addresses the determination of whether tax benefits claimed or expected to be
claimed on a tax return should be recorded in the financial statements.  Under FIN 48, the Company may recognize the
tax benefit from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position.  The tax benefits recognized in the financial
statements from such a position should be measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon ultimate
settlement.  FIN 48 also provides
guidance on de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures.  The adoption of FIN 48 did not have an impact on the Companys
consolidated financial statements.  k.Concentration of
Tenant and Credit Risk  Management of the Company performs ongoing evaluations of its tenants
and requires certain tenants to provide security deposits.  Credit risk is dependent on the economic
conditions in the respective markets and the financial condition of the tenant.  The Company maintains its cash and cash equivalents in financial
institutions.  The combined balances at
each institution periodically exceed FDIC insurance coverage limits.  The Company believes the risk is not
significant.  10


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  2.   SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)  l.Advertising and
Marketing Costs  Advertising and marketing costs were $160, $95 and $53 for the years
ended December 31, 2008, 2007 and the period from May 9, 2006 (commencement
of operations) through December 31, 2006, respectively, and are included
in selling, general and administrative expense. 
These costs are expensed as incurred.  m.Minority Interest  Minority interest represents investors interests of 3.4% at December 31,
2008 and 2007 which, under certain conditions, are redeemable for cash at a
redemption price determined by using a formula which is tied to the trading
prices of shares of common stock of four leading Real Estate Investment Trusts
specializing in the ownership and management of office properties.  The amount the Company would be required to
pay to redeem the interests at December 31, 2008 and 2007 is $1,958 and
$3,331, respectively.  3.IMPACT OF RECENTLY
ISSUED ACCOUNTING STANDARDS  Fair Value Measurements  SFAS 157 &
The Fair Value Option for Financial Assets and Financial Liabilities  SFAS 159  Effective January 1, 2008, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements
(SFAS 157) and SFAS No. 159 The Fair Value Option for Financial Assets
and Financial Liabilities (SFAS 159). 
SFAS 157 defines fair value, establishes a framework for measuring fair
value under accounting principles generally accepted in the United States
(GAAP) and enhances disclosures about fair value measurements.  Fair value is defined under SFAS 157 as the
exchange price that would be received for an asset or paid to transfer a
liability (an exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market participants on the
measurement date.  SFAS 159 allows an
entity the irrevocable option to elect fair value for the initial and
subsequent measurement for certain financial assets and liabilities on a
contract-by-contract basis.  The impact
of adopting both SFAS 157 and SFAS 159 was immaterial to the Company.  In February 2008, the FASB deferred the effective date of SFAS 157
for one-year for non-financial assets and non-financial liabilities that are
recognized or disclosed at fair value on a nonrecurring basis.  SFAS 157 is now effective for those assets
and liabilities for years beginning after November 15, 2008.  11


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  3.IMPACT OF RECENTLY
ISSUED ACCOUNTING STANDARDS (Continued)  FASB Statement No. 160 (FASB No. 160),Non-controlling Interests in Consolidated Financial
Statements  an Amendment of ARB No. 51  In December 2007, the FASB issued No. 160, which establishes
and expands accounting and reporting standards for minority interests, which
will be re-characterized as non-controlling interests, in a subsidiary and the
deconsolidation of a subsidiary.  This
statement is effective for fiscal years beginning on or after December 15,
2008.  The Company is currently assessing
the potential impact that the adoption of FASB No. 160 will have on its
financial position and results of operations.  4.FAIR VALUE OF
FINANCIAL INSTRUMENTS  The techniques used to value financial instruments where quoted market
prices are not available are significantly affected by the assumptions used,
including the discount rates and the estimates of future cash flows. In that
regard, the derived fair value estimates cannot be substantiated by comparison
to independent markets and, in many cases, could not be realized in immediate
settlement of the instrument.  The methods and assumptions used to estimate the fair value of
financial instruments are as follows:  a.The carrying value
of cash and cash equivalents, restricted cash, accounts receivable, accounts
payable and accrued expenses, and tenant security deposits, approximates their
fair value due to the short maturities of these items.  b.At December 31,
2008, the fair values of mortgage notes payable are estimated as the value of
the discounted cash flow required to service the loan.  The rate used to discount the cash flow is
based upon the yield as of December 31, 2008 for a U.S. Treasury with a
similar maturity date as the loan, adjusted for risk factors.  The $186,465 carrying value of fixed rate
mortgage notes payable have an approximate fair value of $140,405 at December 31,
2008.  At December 31, 2008, fair
values of variable rate mortgage notes payable approximate their carrying
values because such mortgages re-price frequently.  12


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  5.INVESTMENT IN REAL
ESTATE  a.Investment in real estate consists of the
following:  December 31,2008
  
  2007Land
  
  $
  53,917
  
  $
  61,864Building and improvements
  
  307,327
  
  327,776361,244
  
  389,640Accumulated depreciation
  
  (34,332
  )
  (21,612
  )$
  326,912
  
  $
  368,028  b.Discontinued
operations  There were no discontinued operations during the year ended December 31,
2008.  For the year ended December 31, 2007, revenue and net loss
attributable to discontinued operations which were operations from properties
sold in 2007 were $15,976 and $3,261 (net of $115 in minority interest),
respectively which include interest expense attributable to the mortgage notes
payable secured by the sold properties in the amount of $5,488.  For the period from May 9, 2006 (commencement of operations)
through December 31, 2006, revenue and net loss attributable to
discontinued operations which were operations from properties sold in 2007 were
$10,928 and $4,775 (net of $168 in minority interest), respectively which
include interest expense attributable to the mortgage notes payable secured by
the sold properties in the amount of $3,590.  6.OTHER ASSETS  Other assets are comprised of the following:  December 31,2008
  
  2007Deferred financing costs
  
  $
  1,733
  
  $
  1,733Deferred lease costs
  
  7,024
  
  2,995Unbilled rents receivable
  
  7,902
  
  6,583Prepaid other
  
  737
  
  92417,396
  
  12,235Accumulated amortization
  
  (2,429
  )
  (1,484
  )$
  14,967
  
  $
  10,751  13


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  7.ACQUIRED FAVORABLE
AND UNFAVORABLE LEASE INTANGIBLES  In accordance with SFAS No. 141: Business Combinations, intangible
lease costs and in-place lease obligations are comprised of the following:  December 31,2008
  
  2007Above market lease value
  
  $
  2,520
  
  $
  2,520In-place lease value
  
  33,298
  
  34,49635,818
  
  37,016Accumulated amortization
  
  (18,877
  )
  (12,582
  )$
  16,941
  
  $
  24,434
  The acquired unfavorable lease intangibles are $12,912 and $15,554, net
of $7,057 and $4,415 in accumulated amortization, at December 31, 2008 and
2007, respectively. The net amortization of the acquired above and below market
lease intangibles of $2,181, $2,651 and $2,124 for the years ended December 31,
2008, 2007 and the period from May 9, 2006 (commencement of operations)
through December 31, 2006, respectively, is reflected as an increase to
rental revenue in the accompanying consolidated statements of operations.  The estimated annual amortization of acquired below market value leases
net of acquired above market value leases for each of the succeeding five years
and thereafter is as follows:  2009
  
  $
  1,8952010
  
  1,7062011
  
  1,7442012
  
  1,7782013
  
  1,609Thereafter
  
  3,084$
  11,816
  Amortization of acquired in-place lease value
of $7,032, $8,687 and $9,003 for the years ended December 31, 2008, 2007
and the period from May 9, 2006 (commencement of operations) through December 31,
2006, respectively, is included in depreciation and amortization in the
accompanying consolidated statements of operations. The estimated annual
amortization of acquired in-place lease value for each of the succeeding five
years and thereafter is as follows:  2009
  
  $
  6,1372010
  
  4,5082011
  
  2,5972012
  
  1,8942013
  
  592Thereafter
  
  117$
  15,845
  14


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  8.MORTGAGE NOTES
PAYABLE  Mortgage notes payable at December 31, 2008 and 2007 consisted of
the following:  December 31,Lender
  
  2008
  
  2007
  
  Interest Rate
  
  MaturityI. Wachovia Bank, N.A.2014 Loans
  
  $
  107,691
  
  $
  109,261
  
  6.26
  %
  August 11, 20142016 Loans
  
  78,774
  
  78,923
  
  6.27
  %
  May 11, 2016II. Gramercy Warehouse Funding I LLC
  
  90,287
  
  90,287
  
  LIBOR + 2.75
  %*
  May 9, 2009III. Mack-Cali Realty, L.P.
  
  
  
  3,275
  
  LIBOR + 4.00
  %*
  January 17, 2009$
  276,752
  
  $
  281,746  
 * London Interbank Offered Rate (LIBOR) at December 31, 2008 was
0.44%.  I.The fixed
rate loans require monthly payments of principal and interest, and tax,
insurance and replacement escrows.  The
loans may be prepaid subject to usual and customary yield maintenance
provisions, and are secured by ten properties located in New Jersey.  II.The
cross-collateralized, cross-defaulted, interest-only loan is secured by six
properties and a pledge of distributions from excess cash flows on another
property.  The loan has two remaining
one-year extension options subject to satisfying the following conditions: (i) the
Debt Service Coverage Ratio as of the payment date which is immediately prior
to the effective maturity date (i.e. without giving effect to such extension)
is 1.10 to 1.00 or greater, and (ii) a rate cap agreement with a term of
not less than one year.  Extension and
pay-off of this loan is subject to a 25 basis point exit fee.  III.Secured by one property,
this interest-only loan had a maximum borrowing capacity of $7,000.  The Companys real estate and related leases collateralized the
mortgage notes payable noted above.  15


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  8.MORTGAGE NOTES
PAYABLE (Continued)  The aggregate principal payments and maturities of mortgage notes
payable for each of the next five years and thereafter at December 31,
2008 are as follows:  2009
  
  $
  92,2152010
  
  2,0552011
  
  2,5412012
  
  2,9522013
  
  3,177Thereafter
  
  173,812$
  276,752
  9.BASE RENTS  The Company, as lessor, leases commercial space under operating leases.
Leased properties include both single and multi-tenant facilities. The future
minimum rental receipts due on non-cancelable operating leases for the next
five years and thereafter at December 31, 2008 are as follows:  2009
  
  $
  44,5712010
  
  42,3422011
  
  38,6952012
  
  36,2112013
  
  32,294Thereafter
  
  89,781$
  283,894
  Substantially all of these lease agreements contain provisions which
provide for the reimbursement of real estate taxes and operating expenses over
the base year amounts and rental increases tied to increases in, among other
factors, the consumer price index.  In 2006, the Company received $2,000 from one tenant for early
termination of their lease.  This amount
is included in other income.  16


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  10.RELATED PARTY
TRANSACTIONS  The Company, which does not employ any
personnel, designated The Gale Management Company, L.L.C. (a subsidiary of
Mack-Cali Realty, L.P.) and/or its affiliates (Gale) to be the administrator
of the Company pursuant to a one-year Management Agreement (the Management
Agreement) which is automatically renewable for successive one year
periods.  Under the Management Agreement,
Gale provides the Companys property management, construction, leasing,
accounting and other services as needed.  The Company incurred $8,712, $8,515 and $5,476 for management fees,
leasing fees, tenant improvements, other operating costs and direct expenses
relating to building operations, and improvements made to the properties for
the years ended December 31, 2008, 2007 and the period from May 9,
2006 (commencement of operations) through December 31, 2006,
respectively.  Included in accounts
payable and accrued expenses in the accompanying consolidated balance sheets,
are amounts due to Gale at December 31, 2008 and 2007 aggregating $520 and
$523, respectively, attributable to the above-referenced costs.  Included in accounts payable and accrued expenses at December 31,
2008 and 2007 is $2,318 and $2,939, respectively, due to the members.  This amount does not bear interest and is
expected to be repaid in the normal course of business.  The Company paid interest expense of $5,308,
$7,377 and $4,309 to Gramercy Warehouse Funding I LLC, an affiliate of SL Green
Realty Corp, Inc., a related party, and $61, $216 and $0 to Mack-Cali
Realty, L.P., a related party, for the years ended December 31, 2008, 2007
and the period from May 9, 2006 (commencement of operations) through December 31,
2006, respectively (see Note 8).  11.COMMITMENTS AND
CONTINGENCIES  The Company, as an owner of real estate, is subject to various
environmental laws of federal and local governments.  Compliance by the Company with existing laws
has not had a material adverse effect on the Companys financial condition and
results of operations, and management does not believe it will have such an
impact in the future. However, the Company cannot predict the impact of new or
changed laws or regulations on its current properties or on its properties that
it may acquire in the future.  The Company is not aware of any litigation threatened against the
Company other than routine litigation arising out of the normal course of
business, some of which is expected to be covered by insurance, none of which
is expected to have a material adverse effect on the Companys financial
condition.  17


MACK-GREEN-GALE LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands)  11.COMMITMENTS AND
CONTINGENCIES (Continued)  The Company has entered into certain commitments to tenants regarding
improvements and fix-up allowances.  The
estimated potential commitment as of December 31, 2008 total $6,232.  12.IMPAIRMENT
CHARGE  Due to the downturn in the economy and, in particular, the Companys
anticipated holding period pertaining to six properties encumbered under the
Gramercy Warehouse Funding I LLC loan that matures on May 9, 2009 (see
Note 8), management believes that this is an indicator that these properties
carrying amounts may not be recoverable at December 31, 2008.  In accordance with Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets, the Company prepared an analysis to estimate the sum of
the undiscounted cash flows expected to result from the use and eventual
disposition of these properties. 
Management determined that the estimate of the aggregate future cash
flows to be generated by these properties are less than the book values of the
total net rental properties.  The book
values of the total net rental properties exceed its fair values by
approximately $32,294, and the Company has recorded this amount on their
consolidated financial statements as an impairment charge for the year ended December 31,
2008.  Fair values were estimated by
using a discounted cash flow technique, which considered the cash flows
expected to result from the use and eventual disposition of the properties
discounted at an appropriate rate.  18