|   | R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|--------|---|----------------------------------------------------------------------------------------|

|   | £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|--------|--------|-----------------------------------------------------------------------------------------|

| Maryland                                                       | 86-0602478                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| Large accelerated filer £ |    Accelerated filer £ | Non-accelerated filer £(Do not check if a smaller reporting company) | Smaller Reporting Company R |
|--------------------------------|--------------------------------------------|---------------------------------------------------------------------------|-----------------------------|

----

|                                                                                                | PAGE   |
|-----------------------------------------------------------------------------------------------------|--------|
| PART I – FINANCIAL INFORMATION                                                                |   |
| Item 1. Financial Statements (unaudited)                                                            | 1      |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31     |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                  | 46     |
| Item 4. Controls and Procedures                                                                     | 46     |
| PART II – OTHER INFORMATION                                                                   |   |
| Item 1. Legal Proceedings                                                                           | 46     |
| Item 1A. Risk Factors                                                                               | 46     |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 48     |
| Item 3. Defaults Upon Senior Securities                                                             | 48     |
| Item 4. (Removed and Reserved)                                                                      | 48     |
| Item 5. Other Information                                                                           | 48     |
| Item 6. Exhibits                                                                                    | 49     |
| Certification of the Chief Executive Officer                                                        |   |
| Certification of the Chief Financial Officer                                                        |   |
| Certification of the Chief Executive Officer                                                        |   |
| Certification of the Chief Financial Officer                                                        |   |

----

PART I – FINANCIAL INFORMATION

Item 1.  

|                                                                                                                        |   | March 31, 2011 |     |   | December 31, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------|--------|-------------------|--------|
| ASSETS                                                                                                                      |   |           |     |   |              |   |
| Investments in real estate, net                                                                                             |   | $              | 350,059  |   |              | $      | 353,137 |   |
| Cash and cash equivalents                                                                                                   |   |           | 7,524    |   |              |   | 9,112 |   |
| Restricted cash                                                                                                             |   |           | 10,817   |   |              |   | 9,851 |   |
| Rents and other receivables, net                                                                                            |   |           | 1,774    |   |              |   | 2,302 |   |
| Deferred rents                                                                                                              |   |           | 6,185    |   |              |   | 6,332 |   |
| Intangible assets, net                                                                                                      |   |           | 23,679   |   |              |   | 24,801 |   |
| Acquired above-market leases, net                                                                                           |   |           | 320      |   |              |   | 358 |   |
| Other assets, net                                                                                                           |   |           | 3,578    |   |              |   | 5,141 |   |
| Goodwill                                                                                                                    |   |           | 48,549   |   |              |   | 48,549 |   |
| Investments in unconsolidated joint ventures                                                                                |   |           | 8,516    |   |              |   | 8,802 |   |
| Total assets                                                                                                                |   | $              | 461,001  |   |              | $      | 468,385 |   |
|                                                                                                                        |   |           |     |   |              |   |   |   |
| LIABILITIES AND EQUITY                                                                                                      |   |           |     |   |              |   |   |   |
| Mortgage and other loans, net                                                                                               |   | $              | 420,642  |   |              | $      | 420,126 |   |
| Unsecured notes payable to related parties                                                                                  |   |           | 21,104   |   |              |   | 21,104 |   |
| Accounts payable and other liabilities                                                                                      |   |           | 30,780   |   |              |   | 31,816 |   |
| Acquired below-market leases, net                                                                                           |   |           | 7,457    |   |              |   | 7,918 |   |
| Total liabilities                                                                                                           |   |           | 479,983  |   |              |   | 480,964 |   |
|                                                                                                                        |   |           |     |   |              |   |   |   |
| Commitments and contingencies                                                                                               |   |           |     |   |              |   |   |   |
|                                                                                                                        |   |           |     |   |              |   |   |   |
| Equity:                                                                                                                     |   |           |     |   |              |   |   |   |
| Preferred Stock, $0.0001 par value per share, 100,000,000 shares authorized, one share of Proportionate                     |   |           |     |   |              |   |   |   |
| Voting Preferred Stock issued and outstanding at March 31, 2011 and December 31, 2010                                       |   |           | -        |   |              |   | - |   |
| Senior Common Stock, $0.0001 par value per share (liquidation preference $10 per share, $24,179 for both periods)           |   |           |     |   |              |
| 40,000,000 shares authorized, 2,417,867 shares issued and outstanding at March 31, 2011 and December 31, 2010               |   |           | 21,525   |   |              |   | 21,525 |   |
| Listed Common Stock, $0.0001 par value per share, 599,999,900 shares authorized, 3,903,050 shares issued and outstanding at |   |           |     |   |              |
| March 31, 2011 and December 31, 2010                                                                                        |   |           | 185      |   |              |   | 185 |   |
| Class B Common Stock, $0.0001 par value per share, 100 shares authorized, issued and outstanding at March 31, 2011          |   |           |     |   |              |
| and December 31, 2010                                                                                                       |   |           | -        |   |              |   | - |   |
| Additional paid-in capital                                                                                                  |   |           | 70       |   |              |   | 50 |   |
| Cumulative deficit                                                                                                          |   |           | (151,917 | )      |              |   | (150,524 | ) |
| Total stockholders' equity (deficit)                                                                                        |   |           | (130,137 | )      |              |   | (128,764 | ) |
| Non-controlling interests:                                                                                                  |   |           |     |   |              |   |   |   |
| Preferred unitholders in the Operating Partnership                                                                          |   |           | 127,268  |   |              |   | 127,268 |   |
| Common unitholders in the Operating Partnership                                                                             |   |           | (16,113  | )      |              |   | (11,083 | ) |
| Total equity (deficit)                                                                                                      |   |           | (18,982  | )      |              |   | (12,579 | ) |
| Total liabilities and equity                                                                                                |   | $              | 461,001  |   |              | $      | 468,385 |   |
|                                                                                                                        |   |           |     |   |              |   |   |   |

----

|                                                         |   | For the three months ended March 31, |      |
|--------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                         |   | 2011                                 |      |   | 2010 |   |
|                                                         |   |                                 |      |   |   |   |
| Revenue:                                                     |   |                                 |      |   |   |   |
| Rental                                                       |   | $                                    | 10,260    |   |   | $ | 10,409 |   |
| Tenant reimbursements                                        |   |                                 | 5,332     |   |   |   | 5,408 |   |
| Property management and other services                       |   |                                 | 712       |   |   |   | - |   |
| Parking                                                      |   |                                 | 2,038     |   |   |   | 2,022 |   |
| Other                                                        |   |                                 | 580       |   |   |   | 95 |   |
| Total revenue                                                |   |                                 | 18,922    |   |   |   | 17,934 |   |
|                                                         |   |                                 |      |   |   |   |   |   |
| Expenses:                                                    |   |                                 |      |   |   |   |   |   |
| Rental property operating                                    |   |                                 | 9,509     |   |   |   | 9,619 |   |
| General and administrative                                   |   |                                 | 2,567     |   |   |   | 607 |   |
| Depreciation and amortization                                |   |                                 | 4,938     |   |   |   | 5,772 |   |
| Interest                                                     |   |                                 | 7,327     |   |   |   | 6,603 |   |
| Abandoned offering costs                                     |   |                                 | 420       |   |   |   | - |   |
| Acquisition costs                                            |   |                                 | 199       |   |   |   | - |   |
| Total expenses                                               |   |                                 | 24,960    |   |   |   | 22,601 |   |
|                                                         |   |                                 |      |   |   |   |   |   |
| Loss before equity in net earnings of unconsolidated         |   |                                 |      |   |   |   |   |   |
| joint ventures and non-operating income                      |   |                                 | (6,038    | ) |   |   | (4,667 | ) |
| Equity in net earnings of unconsolidated                     |   |                                 |      |   |   |   |   |   |
| joint ventures                                               |   |                                 | 96        |   |   |   | 11 |   |
| Non-operating income                                         |   |                                 | 524       |   |   |   | - |   |
| Net loss                                                     |   |                                 | (5,418    | ) |   |   | (4,656 | ) |
|                                                         |   |                                 |      |   |   |   |   |   |
| Net (income) loss attributable to non-controlling interests: |   |                                 |      |   |   |   |   |   |
| Preferred unitholders in the Operating Partnership           |   |                                 | (568      | ) |   |   | (568 | ) |
| Common unitholders in the Operating Partnership              |   |                                 | 5,031     |   |   |   | 4,116 |   |
|                                                         |   |                                 | 4,463     |   |   |   | 3,548 |   |
| Dividends on Senior Common Stock                             |   |                                 | (438      | ) |   |   | - |   |
| Net loss attributable to common stockholders                 |   | $                                    | (1,393    | ) |   | $ | (1,108 | ) |
|                                                         |   |                                 |      |   |   |   |   |   |
| Net loss per common share - basic and diluted                |   | $                                    | (0.36     | ) |   | $ | (0.29 | ) |
|                                                         |   |                                 |      |   |   |   |   |   |
| Weighted average number of common shares                     |   |                                 |      |   |   |   |   |   |
| outstanding - basic and diluted                              |   |                                 | 3,903,150 |   |   |   | 3,850,520 |   |
|                                                         |   |                                 |      |   |   |   |   |   |

----

|                                                                   |   | For the three months ended March 31, |   |
|------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                   |   | 2011                                 |   |   | 2010 |   |
| Operating activities                                                   |   |                                 |   |   |   |   |
| Net loss                                                               |   | $                                    | (5,418 | ) |   | $ | (4,656 | ) |
| Adjustments to reconcile net loss to net cash                          |   |                                 |   |   |   |   |   |   |
| provided by operating activities:                                      |   |                                 |   |   |   |   |   |   |
| Depreciation and amortization                                          |   |                                 | 4,938  |   |   |   | 5,772 |   |
| Gain on internalization of the Advisor                                 |   |                                 | (524   | ) |   |   | - |   |
| Deferred rent                                                          |   |                                 | 147    |   |   |   | (9 | ) |
| Deferred ground rents                                                  |   |                                 | 521    |   |   |   | 523 |   |
| Interest amortization                                                  |   |                                 | 808    |   |   |   | 329 |   |
| Share based compensation                                               |   |                                 | 20     |   |   |   | 50 |   |
| Above- and below-market lease amortization, net                        |   |                                 | (423   | ) |   |   | (511 | ) |
| Equity in net earnings of unconsolidated joint ventures                |   |                                 | (96    | ) |   |   | (11 | ) |
| Net operating distributions received from unconsolidated               |   |                                 |   |   |   |   |   |   |
|    joint ventures                                       |   |                                 | -      |   |   |   | 60 |   |
| Bad debt expense                                                       |   |                                 | 177    |   |   |   | 91 |   |
| Changes in operating assets and liabilities:                           |   |                                 |   |   |   |   |   |   |
| Restricted cash used for operating activities                          |   |                                 | (133   | ) |   |   | 510 |   |
| Rents and other receivables                                            |   |                                 | 939    |   |   |   | 188 |   |
| Other assets                                                           |   |                                 | 1,340  |   |   |   | (878 | ) |
| Accounts payable and other liabilities                                 |   |                                 | (1,204 | ) |   |   | 364 |   |
| Net cash provided by operating activities                              |   |                                 | 1,092  |   |   |   | 1,822 |   |
| Investing activities                                                   |   |                                 |   |   |   |   |   |   |
| Improvement of real estate                                             |   |                                 | (1,373 | ) |   |   | (1,419 | ) |
| Acquisition of Advisor, net of cash received                           |   |                                 | 293    |   |   |   | - |   |
| Capital distributions from unconsolidated joint ventures               |   |                                 | 382    |   |   |   | 496 |   |
| Payment of leasing commissions                                         |   |                                 | (312   | ) |   |   | (256 | ) |
| Increase in restricted cash used for capital expenditures              |   |                                 | (833   | ) |   |   | (72 | ) |
| Net cash used in investing activities                                  |   |                                 | (1,843 | ) |   |   | (1,251 | ) |
| Financing activities                                                   |   |                                 |   |   |   |   |   |   |
| Repayment of mortgage notes payable                                    |   |                                 | (111   | ) |   |   | (130 | ) |
| Borrowings from revolving credit facility                              |   |                                 | 553    |   |   |   | 3,100 |   |
| Offering costs                                                         |   |                                 | -      |   |   |   | (407 | ) |
| Security deposits                                                      |   |                                 | (93    | ) |   |   | (168 | ) |
| Senior Common Stock dividends                                          |   |                                 | (420   | ) |   |   | - |   |
| Listed Common Stock dividends                                          |   |                                 | (43    | ) |   |   | (193 | ) |
| Distributions to non-controlling interests - Preferred unitholders     |   |                                 | (568   | ) |   |   | (568 | ) |
| Distributions to non-controlling interests - Common unitholders        |   |                                 | (155   | ) |   |   | (715 | ) |
| Net cash (used in) provided by financing activities                    |   |                                 | (837   | ) |   |   | 919 |   |
| Increase in cash and cash equivalents                                  |   |                                 | (1,588 | ) |   |   | 1,490 |   |
| Cash and cash equivalents at beginning of period                       |   |                                 | 9,112  |   |   |   | 2,354 |   |
| Cash and cash equivalents at end of period                             |   | $                                    | 7,524  |   |   | $ | 3,844 |   |
| Supplemental cash flow information                                     |   |                                 |   |   |   |   |   |   |
| Interest paid                                                          |   | $                                    | 5,645  |   |   | $ | 5,858 |   |
|                                                                   |   |                                 |   |   |   |   |   |   |
| Supplemental Disclosure of Non-Cash Investing and Financing Activities |   |                                 |   |   |   |   |   |   |
|                                                                   |   |                                 |   |   |   |   |   |   |
| Accrued dividends and distributions                                    |   | $                                    | 568    |   |   | $ | - |   |
| Accrued capital expenditures                                           |   | $                                    | (947   | ) |   |   | 914 |   |
|                                                                   |   |                                 |   |   |   |   |   |   |
|                                                                   |   |                                 |   |   |   |   |   |   |

----

| 1. | Organization and Ownership |
|----|----------------------------|

|                                     |   |       |   |   |      |   |   | Property  |   |
|------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                     |   | Number of  |   |   |      |   |   | Portfolio |   |
|                                     |   | Properties |   |   | Buildings |   |   | Sq. Ft.   |   |
| Wholly-owned properties(1)               |   |       | 8      |   |      |   | 11     |      |   |   | 2,358,749 |   |
| Unconsolidated joint ventures properties |   |       | 16     |   |      |   | 34     |      |   |   | 2,412,909 |   |
| Total                                    |   |       | 24     |   |      |   | 45     |      |   |   | 4,771,658 |   |
|                                     |   |       |   |   |      |   |   |      |   |   |   |   |

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

|   | Basis of Presentation |
|--------|-----------------------|

----

| ·   | Unrestricted and restricted cash on hand; |
|--------------------|-------------------------------------------|

| ·   | Net cash flow generated from operations; |
|--------------------|------------------------------------------|

| ·   | Contribution of existing wholly-owned assets to joint ventures; |
|--------------------|-----------------------------------------------------------------|

| ·   | Asset dispositions; and/or |
|--------------------|----------------------------|

| ·   | Proceeds from additional secured or unsecured debt financings. |
|--------------------|----------------------------------------------------------------|

----

----

----

----

|   | • | persuasive evidence of an arrangement exists; |
|--------|---------|-----------------------------------------------|

|   | • | the delivery has occurred or services rendered; |
|--------|---------|-------------------------------------------------|

|   | • | the fee is fixed and determinable; and |
|--------|---------|----------------------------------------|

|   | • | collectibility is reasonably assured. |
|--------|---------|---------------------------------------|

----

----

----

----

| 3. | Investments in Real Estate, net |
|----|---------------------------------|

|   | Our investments in real estate, net, at March 31, 2011, and at December 31, 2010, are summarized as follows (in thousands): |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

|                                      |   | March 31, 2011 |    |   | December 31, 2010 |   |
|-------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                      |   |           |    |   |              |   |
| Land and land improvements                |   | $              | 69,040  |   |              | $      | 69,040 |   |
| Building and building improvements        |   |           | 294,869 |   |              |   | 294,829 |   |
| Tenant improvements                       |   |           | 35,817  |   |              |   | 35,681 |   |
| Construction in progress                  |   |           | 2,797   |   |              |   | 2,757 |   |
| Furniture, fixtures and equipment         |   |           | 1,396   |   |              |   | 1,391 |   |
| Investments in real estate                |   |           | 403,919 |   |              |   | 403,698 |   |
| Less:  accumulated depreciation |   |           | (53,860 | )      |              |   | (50,561 | ) |
| Investments in real estate, net           |   | $              | 350,059 |   |              | $      | 353,137 |   |
|                                      |   |           |    |   |              |   |   |   |

----

|   | Our identifiable intangible assets and acquired above- and below-market leases, net at March 31, 2011, and at December 31, 2010, are summarized as follows (in thousands): |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                 |   | March 31, 2011 |    |   | December 31, 2010 |   |
|--------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                 |   |           |    |   |              |   |
| Acquired leasing commissions                                                         |   |           |    |   |              |   |
|           Gross amount             |   | $              | 9,874   |   |              | $      | 9,596 |   |
|           Accumulated amortization |   |           | (5,834  | )      |              |   | (5,528 | ) |
|           Net balance              |   | $              | 4,040   |   |              | $      | 4,068 |   |
|                                                                                 |   |           |    |   |              |   |   |   |
| Acquired leases in place                                                             |   |           |    |   |              |   |   |   |
|           Gross amount             |   | $              | 15,690  |   |              | $      | 15,823 |   |
|           Accumulated amortization |   |           | (12,431 | )      |              |   | (12,103 | ) |
|           Net balance              |   | $              | 3,259   |   |              | $      | 3,720 |   |
|                                                                                 |   |           |    |   |              |   |   |   |
| Acquired tenant relationship costs                                                   |   |           |    |   |              |   |   |   |
|           Gross amount             |   | $              | 18,312  |   |              | $      | 18,312 |   |
|           Accumulated amortization |   |           | (7,466  | )      |              |   | (6,899 | ) |
|           Net balance              |   | $              | 10,846  |   |              | $      | 11,413 |   |
|                                                                                 |   |           |    |   |              |   |   |   |
| Acquired other intangibles                                                           |   |           |    |   |              |   |   |   |
|           Gross amount             |   | $              | 7,118   |   |              | $      | 7,139 |   |
|           Accumulated amortization |   |           | (1,584  | )      |              |   | (1,539 | ) |
|           Net balance              |   | $              | 5,534   |   |              | $      | 5,600 |   |
|                                                                                 |   |           |    |   |              |   |   |   |
| Intangible assets, net                                                               |   | $              | 23,679  |   |              | $      | 24,801 |   |
|                                                                                 |   |           |    |   |              |   |   |   |
| Acquired above-market leases                                                         |   |           |    |   |              |   |   |   |
|           Gross amount             |   | $              | 2,164   |   |              | $      | 2,167 |   |
|           Accumulated amortization |   |           | (1,844  | )      |              |   | (1,809 | ) |
| Acquired above-market leases, net                                                    |   | $              | 320     |   |              | $      | 358 |   |
|                                                                                 |   |           |    |   |              |   |   |   |
| Acquired below-market leases                                                         |   |           |    |   |              |   |   |   |
|           Gross amount             |   | $              | 15,201  |   |              | $      | 15,245 |   |
|           Accumulated amortization |   |           | (7,744  | )      |              |   | (7,327 | ) |
| Acquired below-market leases, net                                                    |   | $              | 7,457   |   |              | $      | 7,918 |   |
|                                                                                 |   |           |    |   |              |   |   |   |

| 5. | Investment in Unconsolidated Joint Ventures |
|----|---------------------------------------------|

----

|                                                   |   | Three months ended March 31, |   |
|--------------------------------------------------------|--------|------------------------------|--------|
|                                                   |   | 2011                         |   |   | 2010 |   |
| Revenues:                                              |   |                         |   |   |   |   |
| Rental                                                 |   | $                            | 10,560 |   |   | $ | 11,561 |   |
| Other                                                  |   |                         | 2,621  |   |   |   | 2,250 |   |
| Total revenues                                         |   |                         | 13,181 |   |   |   | 13,811 |   |
|                                                   |   |                         |   |   |   |   |   |   |
| Expenses:                                              |   |                         |   |   |   |   |   |   |
| Rental operating                                       |   |                         | 5,329  |   |   |   | 5,468 |   |
| Depreciation and amortization                          |   |                         | 5,708  |   |   |   | 5,998 |   |
| Interest                                               |   |                         | 4,475  |   |   |   | 5,631 |   |
| Total expenses                                         |   |                         | 15,512 |   |   |   | 17,097 |   |
| Net loss                                               |   | $                            | (2,331 | ) |   | $ | (3,286 | ) |
|                                                   |   |                         |   |   |   |   |   |   |
| Equity in net earnings                                 |   |                         |   |   |   |   |   |   |
|    of unconsolidated joint ventures (a) |   | $                            | 96     |   |   | $ | 11 |   |
|                                                   |   |                         |   |   |   |   |   |   |

|                                        |   | March 31, 2011 |    |   | December 31, 2010 |   |
|---------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
| Investment in real estate, net              |   | $              | 378,693 |   |              | $      | 381,738 |   |
| Other assets                                |   |           | 61,285  |   |              |   | 65,064 |   |
| Total assets                                |   | $              | 439,978 |   |              | $      | 446,802 |   |
|                                        |   |           |    |   |              |   |   |   |
| Mortgage and other loans                    |   | $              | 365,307 |   |              | $      | 365,573 |   |
| Other liabilities                           |   |           | 17,733  |   |              |   | 20,073 |   |
| Total liabilities                           |   | $              | 383,040 |   |              | $      | 385,646 |   |
|                                        |   |           |    |   |              |   |   |   |
| Investment in unconsolidated joint ventures |   | $              | 8,516   |   |              | $      | 8,802 |   |
|                                        |   |           |    |   |              |   |   |   |

| (a) | The total earnings of all the respective joint ventures of the Company, for both periods presented, are in a loss position. However, the equity in net earnings of the joint ventures attributable to the Company is positive for both periods presented. This occurs because the Company’s effective ownership in the various joint ventures ranges from 5% to 32.2% and therefore only a portion of the losses of the joint ventures is attributable to the Company. In addition, the Company earns a priority return which in the case of most of the joint ventures exceeds the attributable losses, resulting in net earnings attributable to the Company. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                       |   | March 31, 2011 |   |   | December 31, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Deferred loan fees, net of accumulated amortization of $2.0 million and $1.7 million at March 31, 2011 and December 31, 2010, respectively |   | $              | 1,562  |   |              | $      | 1,846 |   |
| Prepaid expenses                                                                                                                           |   |           | 2,016  |   |              |   | 1,305 |   |
| Acquisition deposits                                                                                                                       |   |           | -      |   |              |   | 1,990 |   |
| Total other assets, net                                                                                                                    |   | $              | 3,578  |   |              | $      | 5,141 |   |

| 7. | Accounts Payable and Other Liabilities |
|----|----------------------------------------|

|                                         |   | March 31, 2011 |   |   | December 31, 2010 |   |
|----------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Accounts payable                             |   | $              | 1,753  |   |              | $      | 1,150 |   |
| Interest payable                             |   |           | 7,956  |   |              |   | 6,675 |   |
| Deferred revenue                             |   |           | 1,441  |   |              |   | 1,690 |   |
| Security deposits                            |   |           | 2,517  |   |              |   | 2,618 |   |
| Deferred straight-line ground rent           |   |           | 9,228  |   |              |   | 8,708 |   |
| Accrued expenses                             |   |           | 7,233  |   |              |   | 10,334 |   |
| Asset retirement obligations                 |   |           | 652    |   |              |   | 641 |   |
| Total accounts payable and other liabilities |   | $              | 30,780 |   |              | $      | 31,816 |   |
|                                         |   |           |   |   |              |   |   |   |

----

|                           |   | Outstanding Principal Balance, Net at |    |   |              |   |    |
|--------------------------------|--------|---------------------------------------|---------|--------|-------------------|--------|---------|
| Property                       |   | March 31, 2011                        |    |   | December 31, 2010 |   |    | Interest Rate |   | Maturity Date |
| Pacific Business News Building |   | $                                     | 11,601  |   |              | $      | 11,601  |   |   |   | 6.98 | % (a) | 4/6/2010 (a) |
| City Square                    |   |                                  | 27,500  |   |              |   | 27,500  |   |   |   | 5.58 | % | 9/1/2010 (b) |
| City Square                    |   |                                  | 25,293  |   |              |   | 25,294  |   |   |          LIBOR + 2.35% (c) |   | 9/1/2010 (c) |
| Clifford Center                |   |                                  | 3,154   |   |              |   | 3,226   |   |   |   | 6.00 | % | 8/15/2011(d) |
| First Insurance Center         |   |                                  | 37,556  |   |              |   | 37,533  |   |   |   | 5.74 | % | 1/1/2016 |
| First Insurance Center         |   |                                  | 13,834  |   |              |   | 13,826  |   |   |   | 5.40 | % | 1/6/2016 |
| Sorrento Technology Center     |   |                                  | 11,491  |   |              |   | 11,521  |   |   |   | 5.75 | % | 1/11/2016 |
| Pan Am Building                |   |                                  | 59,970  |   |              |   | 59,969  |   |   |   | 6.17 | % | 8/11/2016 |
| Waterfront Plaza               |   |                                  | 100,000 |   |              |   | 100,000 |   |   |   | 6.37 | % | 9/11/2016 |
| Waterfront Plaza               |   |                                  | 11,000  |   |              |   | 11,000  |   |   |   | 6.37 | % | 9/11/2016 |
| Davies Pacific Center          |   |                                  | 94,243  |   |              |   | 94,209  |   |   |   | 5.86 | % | 11/11/2016 |
| Subtotal                       |   |                                  | 395,642 |   |              |   | 395,679 |   |   |   |   |   |   |
| Revolving line of credit (e)   |   |                                  | 25,000  |   |              |   | 24,447  |   |   |   | 1.25 | % | 12/31/2013 |
| Total                          |   | $                                     | 420,642 |   |              | $      | 420,126 |   |   |   |   |   |   |
|                           |   |                                  |    |   |              |   |    |   |   |   |   |   |   |

| (a) | The loan secured by the Pacific Business News Building had matured and we had not repaid the principal balance as of March 31, 2011.  As a result, interest was being incurred at the default rate of 11.98%.  Subsequent to March 31, 2011, the property was contributed into a joint venture with a third party and the joint venture repaid the loan at a discount. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The loan secured by the City Square property had matured and we had not repaid the principal balance as of March 31, 2011.  The Company signed a forbearance agreement with the lender on October 15, 2010.  Under the forbearance agreement, the default interest of 5% in excess of the stated rate and late charge penalties in the amount of approximately $1.9 million will be forgiven if the loan is repaid in full prior to April 29, 2011.  Subsequent to March 31, 2011, the property was contributed into a joint venture with a third party that assumed the loan in full and the loan’s maturity date was extended through June 15, 2011. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The loan secured by a pledge of the ownership interests in the entities owning the City Square property had matured and we had not repaid the principal balance as of March 31, 2011.  As a result, interest was being incurred at the default rate of LIBOR + 7.35%. The Company had an interest rate cap on this loan for the notional amount of $28.5 million, which effectively limited the LIBOR rate on this loan to 7.45%.  The interest rate cap expired on September 1, 2010, commensurate with the maturity date of the loan.  Subsequent to March 31, 2011, the property was contributed into a joint venture with a third party and the joint venture repaid the loan at a discount. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | The terms of the Clifford Center loan provide the Company with the option to extend the maturity date to August 15, 2014 subject to a nominal fee.  We expect to exercise this option. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | The revolving line of credit matures on December 31, 2013.  Amounts borrowed under the revolving line of credit bear interest at a fluctuating annual rate equal to the effective rate of interest paid by the lender on time certificates of deposit, plus 1.00%.  See “Revolving Line of Credit” below. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2011 (1) (2) |   | $      | 67,660  |   |
|--------------|--------|--------|---------|--------|
| 2012         |   |   | 157     |   |
| 2013         |   |   | 25,168  |   |
| 2014         |   |   | 179     |   |
| 2015         |   |   | 189     |   |
| Thereafter   |   |   | 328,825 |   |
| Total        |   | $      | 422,178 |   |
|         |   |   |    |   |

| (1)   | Includes (i) loans that matured in 2010 and remained unpaid as of March 31, 2011 and (ii) the loan secured by Clifford Center, as to which we have the option to extend the maturity date to August 15, 2014 and intend to do so. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Subsequent to March 31, 2011, the City Square and Pacific Business News Building loans representing $64.4 million of the 2011 amount were assumed and/or repaid by the new joint ventures entered into with a third party into which these properties were contributed. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9. | Unsecured Notes Payable to Related Parties |
|----|--------------------------------------------|

----

| 10. | Commitments and Contingencies |
|-----|-------------------------------|

|   | Minimum Future Ground Rents |
|--------|-----------------------------|

|   | Contingencies |
|--------|---------------|

----

----

| 11. | Equity and Earnings per Share |
|-----|-------------------------------|

|                         |   | Pacific Office Properties Trust, Inc. |     |   | Non-controlling interests |   |    | Total  |   |
|------------------------------|--------|---------------------------------------|----------|--------|---------------------------|--------|---------|--------|--------|
|                         |   |                                  |     |   |                      |   |    |   |   |
| Balance at December 31, 2010 |   | $                                     | (128,764 | )      |                      | $      | 116,185 |   |   |   | (12,579 | ) |
| Net loss                     |   |                                  | (955     | )      |                      |   | (4,463  | )      |   |   | (5,418 | ) |
| Stock compensation           |   |                                  | 20       |   |                      |   | -       |   |   |   | 20 |   |
| Dividends and distributions  |   |                                  | (438     | )      |                      |   | (567    | )      |   |   | (1,005 | ) |
| Balance at March 31, 2011    |   | $                                     | (130,137 | )      |                      | $      | 111,155 |   |   | $ | (18,982 | ) |
|                         |   |                                  |     |   |                      |   |    |   |   |   |   |   |

----

----

----

|                                                                                |   | For the three months ended March 31, |      |
|-------------------------------------------------------------------------------------|--------|--------------------------------------|-----------|
|                                                                                |   | 2011                                 |      |   | 2010 |   |
|                                                                                |   |                                 |      |   |   |   |
| Net loss attributable to common stockholders - basic and diluted (1)                |   | $                                    | (1,393    | ) |   | $ | (1,108 | ) |
|                                                                                |   |                                 |      |   |   |   |   |   |
| Weighted average number of common shares                                            |   |                                 | 3,903,150 |   |   |   | 3,850,520 |   |
| Potentially dilutive common shares (2)                                              |   |                                 | —   |   |   |   | — |   |
| Weighted average number of common shares outstanding — basic and diluted |   |                                 | 3,903,150 |   |   |   | 3,850,520 |   |
| Net loss per common share — basic and diluted                            |   | $                                    | (0.36     | ) |   | $ | (0.29 | ) |
|                                                                                |   |                                 |      |   |   |   |   |   |

| (1) | For the three months ended March 31, 2011 and March 31, 2010, net loss attributable to common stockholders includes $0.6 million of priority allocation to Preferred Unit holders each, respectively, which is included in non-controlling interests in the consolidated statements of operations. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | 38,092 non-vested restricted stock units, 14,101,004 shares of Listed Common Stock which may be issued upon redemption of Common Units, 32,597,528 shares of Listed Common Stock which may be issued upon redemption of Preferred Units, and 2,417,867 shares of Senior Common Stock, for the three months ended March 31, 2011, and 52,630 non-vested restricted stock units, 14,299,267 shares of Listed Common Stock which may be issued upon redemption of Common Units and 32,597,528 shares of Listed Common Stock which may be issued upon redemption of Preferred Units for the three months ended March 31, 2010, were excluded from the calculation of diluted earnings per share because they were anti-dilutive due to our net loss position.  Refer to “Non-Controlling Interests” and “Stockholders’ Equity (Deficit)” in this footnote for the redemption and conversion terms and conditions of the Preferred Units and Senior Common Stock. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 12. | Internalization of the Advisor |
|-----|--------------------------------|

|                                     |   | For the three months ended March 31, |   |
|------------------------------------------|--------|-------------------------------------------|--------|
|                                     |   | 2011                                      |   |   | 2010 |   |
| Property management fees                 |   |                                      |   |   |   |   |
|   to affiliates of Advisor (1) |   | $                                         | 223    |   |   | $ | 767 |   |
| Corporate management fees to Advisor     |   |                                      | 63     |   |   |   | 188 |   |
| Leasing commissions (2)                  |   |                                      | -      |   |   |   | 228 |   |
| Construction management fees and other   |   |                                      | 3      |   |   |   | 12 |   |
| Total                                    |   | $                                         | 289    |   |   | $ | 1,195 |   |
|                                     |   |                                      |   |   |   |   |   |   |

|   | ________________________ |
|--------|--------------------------|

|   | (1) | Property management fees are calculated as a percentage of the rental cash receipts collected by the properties under management (ranging from 2.5% to 4.5%), plus the payroll costs of on-site employees. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Leasing commissions are capitalized as deferred leasing costs and are amortized over the life of the related lease. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------|

----

| Revenues:                              |   |   |   |
|----------------------------------------|--------|--------|--------|
| Property management and other services |   | $      | 712    |   |
| Other                                  |   |   | 46     |   |
| Total revenues                         |   | $      | 758    |   |
|                                   |   |   |   |   |
| Expenses:                              |   |   |   |   |
| General and administrative             |   | $      | 1,814  |   |
| Total expenses                         |   | $      | 1,814  |   |
|                                   |   |   |   |   |

|                                                   |   | For the three months ended March 31, |   |
|--------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                   |   | 2011                                      |   |   | 2010 |   |
|                                                   |   |                                      |   |   |   |   |
| Pro forma revenues                                     |   | $                                         | 19,127 |   |   | $ | 18,613 |   |
| Pro forma net loss attributable to common stockholders |   | $                                         | (1,470 | ) |   | $ | (1,399 | ) |
| Pro forma loss per share                               |   | $                                         | (0.38  | ) |   | $ | (0.36 | ) |
|                                                   |   |                                      |   |   |   |   |   |   |

| 13. | Related Party Transactions |
|-----|----------------------------|

----

| 15. | Segment Reporting |
|-----|-------------------|

----

|                                                    |   | For the three months ended March 31, 2011 |   |   |         |   |
|---------------------------------------------------------|--------|-------------------------------------------|--------|--------|--------------|--------|
|                                                    |   | Honolulu                                  |   |   | Western U.S. |   |   | Corporate |   |   | Total |   |
| Revenue:                                                |   |                                      |   |   |         |   |   |   |   |   |   |   |
| Rental                                                  |   | $                                         | 7,384  |   |         | $      | 2,872 |   |   | $ | 4 |   |   | $ | 10,260 |   |
| Tenant reimbursements                                   |   |                                      | 5,125  |   |         |   | 207 |   |   |   | - |   |   |   | 5,332 |   |
| Property management and other services                  |   |                                      | -      |   |         |   | - |   |   |   | 712 |   |   |   | 712 |   |
| Parking                                                 |   |                                      | 1,796  |   |         |   | 242 |   |   |   | - |   |   |   | 2,038 |   |
| Other                                                   |   |                                      | 572    |   |         |   | 7 |   |   |   | 1 |   |   |   | 580 |   |
| Total revenue                                           |   |                                      | 14,877 |   |         |   | 3,328 |   |   |   | 717 |   |   |   | 18,922 |   |
| Expenses:                                               |   |                                      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Rental property operating                               |   |                                      | 7,883  |   |         |   | 1,626 |   |   |   | - |   |   |   | 9,509 |   |
| General and administrative                              |   |                                      | -      |   |         |   | - |   |   |   | 2,567 |   |   |   | 2,567 |   |
| Depreciation and amortization                           |   |                                      | 3,723  |   |         |   | 1,215 |   |   |   | - |   |   |   | 4,938 |   |
| Interest                                                |   |                                      | 5,355  |   |         |   | 1,303 |   |   |   | 669 |   |   |   | 7,327 |   |
| Loss on extinguishment of debt                          |   |                                      | -      |   |         |   | - |   |   |   | - |   |   |   | - |   |
| Abandoned offering costs                                |   |                                      | -      |   |         |   | - |   |   |   | 420 |   |   |   | 420 |   |
| Acquisition costs                                       |   |                                      | -      |   |         |   | - |   |   |   | 199 |   |   |   | 199 |   |
| Impairment on long-lived assets                         |   |                                      | -      |   |         |   | - |   |   |   | - |   |   |   | - |   |
| Total expenses                                          |   |                                      | 16,961 |   |         |   | 4,144 |   |   |   | 3,855 |   |   |   | 24,960 |   |
| Loss before equity in net earnings of unconsolidated    |   |                                      |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| joint ventures and non-operating income                 |   | $                                         | (2,084 | )      |         | $      | (816 | ) |   | $ | (3,138 | ) |   | $ | (6,038 | ) |
| Equity in net earnings of unconsolidated joint ventures |   |                                      |   |   |         |   |   |   |   |   |   | 96 |   |
| Net loss attributable to non-controlling interests      |   |                                      |   |   |         |   |   |   |   |   |   |   |   |   | 4,463 |   |
| Non-operating income                                    |   |                                      |   |   |         |   |   |   |   |   |   |   |   |   | 524 |   |
| Dividends on Senior Common Stock                        |   |                                      |   |   |         |   |   |   |   |   |   |   |   |   | (438 | ) |
| Net loss attributable to common stockholders            |   |                                      |   |   |         |   |   |   |   |   |   |   |   | $ | (1,393 | ) |

----

|                                                    |   | For the three months ended March 31, 2010 |    |   |         |   |
|---------------------------------------------------------|--------|-------------------------------------------|---------|--------|--------------|--------|
|                                                    |   | Honolulu                                  |    |   | Western U.S. |   |   | Corporate |   |   | Total |   |
| Revenue:                                                |   |                                      |    |   |         |   |   |   |   |   |   |   |
| Rental                                                  |   | $                                         | 7,250   |   |         | $      | 3,155 |   |   | $ | 4 |   |   | $ | 10,409 |   |
| Tenant reimbursements                                   |   |                                      | 5,173   |   |         |   | 235 |   |   |   | — |   |   |   | 5,408 |   |
| Parking                                                 |   |                                      | 1,781   |   |         |   | 241 |   |   |   | — |   |   |   | 2,022 |   |
| Other                                                   |   |                                      | 38      |   |         |   | 7 |   |   |   | 50 |   |   |   | 95 |   |
| Total revenue                                           |   |                                      | 14,242  |   |         |   | 3,638 |   |   |   | 54 |   |   |   | 17,934 |   |
| Expenses:                                               |   |                                      |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Rental property operating                               |   |                                      | 8,004   |   |         |   | 1,615 |   |   |   | — |   |   |   | 9,619 |   |
| General and administrative                              |   |                                      | — |   |         |   | — |   |   |   | 607 |   |   |   | 607 |   |
| Depreciation and amortization                           |   |                                      | 3,961   |   |         |   | 1,811 |   |   |   | — |   |   |   | 5,772 |   |
| Interest                                                |   |                                      | 5,224   |   |         |   | 823 |   |   |   | 556 |   |   |   | 6,603 |   |
| Total expenses                                          |   |                                      | 17,189  |   |         |   | 4,249 |   |   |   | 1,163 |   |   |   | 22,601 |   |
| Loss before equity in net earnings of unconsolidated    |   |                                      |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| joint ventures and non-operating income                 |   | $                                         | (2,947  | )      |         | $      | (611 | ) |   | $ | (1,109 | ) |   | $ | (4,667 | ) |
| Equity in net earnings of unconsolidated joint ventures |   |                                      |    |   |         |   |   |   |   |   |   |   |   |   | 11 |   |
| Net loss attributable to non-controlling interests      |   |                                      |    |   |         |   |   |   |   |   |   |   |   |   | 3,548 |   |
| Net loss attributable to common stockholders            |   |                                      |    |   |         |   |   |   |   |   |   |   |   | $ | (1,108 | ) |

|                  |   | Honolulu |    |   | Western U.S. |   |   | Corporate |   |   | Total  |   |
|-----------------------|--------|----------|---------|--------|--------------|--------|--------|-----------|--------|--------|--------|--------|
| Total assets:         |   |     |    |   |         |   |   |      |   |   |   |   |
| March 31, 2011        |   | $        | 373,684 |   |         | $      | 72,745 |      |   | $      | 14,572 |   |   | $ | 461,001 |   |
| December 31, 2010     |   | $        | 375,645 |   |         | $      | 73,351 |      |   | $      | 19,389 |   |   | $ | 468,385 |   |
| Total goodwill:       |   |     |    |   |         |   |   |      |   |   |   |   |   |   |   |   |
| March 31, 2011        |   | $        | 48,549  |   |         | $      | -      |      |   | $      | -      |   |   | $ | 48,549 |   |
| December 31, 2010     |   | $        | 48,549  |   |         | $      | -      |      |   | $      | -      |   |   | $ | 48,549 |   |
| Capital expenditures  |   |     |    |   |         |   |   |      |   |   |   |   |   |   |   |   |
| For the period ended: |   |     |    |   |         |   |   |      |   |   |   |   |   |   |   |   |
| March 31, 2011        |   | $        | 508     |   |         | $      | 7      |      |   | $      | -      |   |   | $ | 515 |   |
| March 31, 2010        |   | $        | 2,303   |   |         | $      | 30     |      |   | $      | -      |   |   | $ | 2,333 |   |
|                  |   |     |    |   |         |   |   |      |   |   |   |   |   |   |   |   |

----

| 16. | Fair Value of Financial Instruments |
|-----|-------------------------------------|

| 17. | Subsequent Events |
|-----|-------------------|

----

Item 2. 

|   | Note Regarding Forward-Looking Statements - |
|--------|---------------------------------------------|

----

----

| PROPERTY                                 |   | NO. OF    |   |   | RENTABLE   |   |      | PERCENTAGE |   |   | ANNUALIZED |   |
|------------------------------------------|--------|-----------|--------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|
|                                     |   | BUILDINGS |   |   | SQ. FT.(1) |   |      | OWNERSHIP  |   |   | RENT(2)(3) |   |
| Wholly-Owned Properties                  |   |      |   |   |       |   |      |       |   |   |       |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |
| Waterfront Plaza                         |   |      |   |   |       |   |      |       |   |   |       |   |
| 500 Ala Moana Blvd.                      |   |      | 1      |   |       |   | 554,695   |       |   |   | 100.0      | %      |   | $ | 18,941,664 |   |
| Honolulu, HI 96813                       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Davies Pacific Center                    |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 841 Bishop Street                        |   |      | 1      |   |       |   | 375,021   |       |   |   | 100.0      | %      |   |   | 10,017,018 |   |
| Honolulu, HI 96813                       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Pan Am Building                          |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 1600 Kapiolani Blvd.                     |   |      | 1      |   |       |   | 225,847   |       |   |   | 100.0      | %      |   |   | 6,757,288 |   |
| Honolulu, HI 96814                       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| First Insurance Center                   |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 1100 Ward Avenue                         |   |      | 1      |   |       |   | 215,527   |       |   |   | 100.0      | %      |   |   | 7,434,773 |   |
| Honolulu, HI 96814                       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Pacific Business News Building (4)       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 1833 Kalakaua Avenue                     |   |      | 1      |   |       |   | 96,310    |       |   |   | 100.0      | %      |   |   | 1,997,729 |   |
| Honolulu, HI 96815                       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Clifford Center                          |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 810 Richards Street                      |   |      | 1      |   |       |   | 77,655    |       |   |   | 100.0      | %      |   |   | 1,780,721 |   |
| Honolulu, HI 96813                       |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Sorrento Technology Center               |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 10140 Barnes Canyon Rd.                  |   |      | 2      |   |       |   | 63,363    |       |   |   | 100.0      | %      |   |   | 676,381 |   |
| 10180 Barnes Canyon Rd.                  |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92121                      |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| City Square (4)                          |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 3800 N. Central Ave.                     |   |      | 3      |   |       |   | 750,331   |       |   |   | 100.0      | %      |   |   | 10,909,429 |   |
| 3838 N. Central Ave.                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| 4000 N. Central Ave.                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Phoenix, AZ 85012                        |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                     |   |      |   |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Total Wholly-Owned  Properties |   |      | 11     |   |       |   | 2,358,749 |       |   |   |       |   |   | $ | 58,515,003 |   |

----

| PROPERTY                     |   | NO. OF    |   |   | RENTABLE    |   |    | PERCENTAGE |   |   | ANNUALIZED |   |
|------------------------------|--------|-----------|--------|--------|-------------|--------|---------|------------|--------|--------|------------|--------|
|                         |   | BUILDINGS |   |   | SQ. FT. (1) |   |    | OWNERSHIP  |   |   | RENT(2)(3) |   |
| Joint Venture Properties     |   |      |   |   |        |   |    |       |   |   |       |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |
| Torrey Hills Corp. Center    |   |      |   |   |        |   |    |       |   |   |       |   |
| 11250 El Camino Real         |   |      | 1      |   |        |   | 23,478  |       |   |   | 32.2       | %      |   | $ | 111,153 |   |
| San Diego, CA 92130          |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Palomar Heights Plaza        |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 5860 Owens Avenue            |   |      | 3      |   |        |   | 45,538  |       |   |   | 32.2       | %      |   |   | 744,855 |   |
| 5868 Owens Avenue            |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 5876 Owens Avenue            |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Carlsbad, CA 92008           |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Palomar Heights Corp. Center |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 5857 Owens Avenue            |   |      | 1      |   |        |   | 67,862  |       |   |   | 32.2       | %      |   |   | 1,245,530 |   |
| Carlsbad, CA 92008           |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Scripps Ranch Bus. Park      |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 9775 Business Park Ave.      |   |      | 2      |   |        |   | 48,146  |       |   |   | 32.2       | %      |   |   | 607,871 |   |
| 10021 Willow Creek Rd.       |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92131          |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Via Frontera Bus. Park       |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 10965 Via Frontera Dr.       |   |      | 2      |   |        |   | 75,651  |       |   |   | 10.0       | %      |   |   | 702,271 |   |
| 10993 Via Frontera Dr.       |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92127          |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Poway Flex                   |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 13550 Stowe Drive            |   |      | 1      |   |        |   | 111,258 |       |   |   | 10.0       | %      |   |   | 1,457,920 |   |
| Poway, CA 92064              |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| Carlsbad Corp. Center.       |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
| 1950 Camino Vida Roble       |   |      | 1      |   |        |   | 120,483 |       |   |   | 10.0       | %      |   |   | 2,437,250 |   |
| Carlsbad, CA 92008           |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |        |   |    |       |   |   |       |   |   |   |   |   |

----

| PROPERTY                       |   | NO. OF    |   |   | RENTABLE    |   |      | PERCENTAGE |   |   | ANNUALIZED |   |
|--------------------------------|--------|-----------|--------|--------|-------------|--------|-----------|------------|--------|--------|------------|--------|
|                           |   | BUILDINGS |   |   | SQ. FT. (1) |   |      | OWNERSHIP  |   |   | RENT(2)(3) |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |
| Savi Tech Center               |   |      |   |   |        |   |      |       |   |   |       |   |
| 22705 Savi Ranch Pkwy.         |   |      | 4      |   |        |   | 371,098   |       |   |   | 10.0       | %      |   | $ | 7,364,904 |   |
| 22715 Savi Ranch Pkwy.         |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 22725 Savi Ranch Pkwy.         |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 22745 Savi Ranch Pkwy.         |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Yorba Linda, CA 92887          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Yorba Linda Bus. Park          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 22833 La Palma Ave.            |   |      | 5      |   |        |   | 164,121   |       |   |   | 10.0       | %      |   |   | 1,453,483 |   |
| 22343 La Palma Ave.            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 22345 La Palma Ave.            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 22347 La Palma Ave.            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 22349 La Palma Ave.            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Yorba Linda, CA 92887          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| South Coast Exec. Center       |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 1503 South Coast Dr.           |   |      | 1      |   |        |   | 60,798    |       |   |   | 10.0       | %      |   |   | 854,046 |   |
| Costa Mesa, CA 92626           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Gateway Corp. Center           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 1370 Valley Vista Dr.          |   |      | 1      |   |        |   | 85,048    |       |   |   | 10.0       | %      |   |   | 1,940,641 |   |
| Diamond Bar, CA 91765          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Black Canyon Corp. Ctr.        |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 16404 N. Black Canyon Hwy.     |   |      | 1      |   |        |   | 218,694   |       |   |   | 17.5       | %      |   |   | 3,050,244 |   |
| Phoenix, AZ 85053              |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Bank of Hawaii Waikiki Center  |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 2155 Kalakaua Avenue           |   |      | 1      |   |        |   | 152,288   |       |   |   | 17.5       | %      |   |   | 7,461,626 |   |
| Honolulu, HI 96815             |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Seville Plaza                  |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 5469 Kearny Villa Rd.          |   |      | 3      |   |        |   | 139,336   |       |   |   | 7.5        | %      |   |   | 2,302,523 |   |
| 5471 Kearny Villa Rd.          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 5473 Kearny Villa Rd.          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92123            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| U.S. Bank Center               |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 101 North First Ave.           |   |      | 2      |   |        |   | 372,606   |       |   |   | 7.5        | %      |   |   | 6,356,780 |   |
| 21 West Van Buren St.          |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Phoenix, AZ 85003              |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Seaview Corporate Center       |   |      | 5      |   |        |   | 356,504   |       |   |   | 5.0        | %      |   |   | 10,032,338 |   |
| 10180 Telesis Court            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 10190 Telesis Court            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 10182 Telesis Court            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| 10188 Telesis Court            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92121            |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |
| Total Joint Venture Properties |   |      | 34     |   |        |   | 2,412,909 |       |   |   |       |   |   | $ | 48,123,435 |   |
|                           |   |      |   |   |        |   |      |       |   |   |       |   |   |   |   |   |

----

| (1)  Based on Building Owners and Managers Association (BOMA) 1996 remeasurement.                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  Annualized rent represents the monthly contractual rent under commenced leases as of March 31, 2011. This amount reflects total rent before abatements and includes contractual expense reimbursements, which are estimated by annualizing March 2011 actual expense reimbursement billings. Total abatements committed to as of March 31, 2011 for the 12 months ending March 31, 2012 were approximately $0.8 million for our wholly-owned properties and $2.8 million for our joint venture properties. |
| (3)  Annualized rent for the joint venture properties is reported with respect to each property in its entirety, rather than the portion of the property represented by our ownership interest.  No portion of the joint venture properties’ annualized rent is consolidated in our consolidated financial statements because our interests in our joint venture properties are accounted for under the equity method of accounting.                                                            |
| (4)   Subsequent to March 31, 2011, we have contributed this property into a newly formed joint venture and will deconsolidate the property in the quarter ended June 30, 2011.                                                                                                                                                                                                                                                                                                                            |

|   | Critical Accounting Policies - |
|--------|--------------------------------|

----

|                                                 |   | 2011   |   |   | 2010   |   |   | $ Change |   |   | % Change |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|----------|--------|
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |
| Revenue:                                             |   |   |   |   |   |   |   |     |   |   |     |   |
| Rental                                               |   | $      | 10,260 |   |   | $      | 10,409 |     |   | $      | (149     | )      |   |   | (1.4 | %) |
| Tenant reimbursements                                |   |   | 5,332  |   |   |   | 5,408  |     |   |   | (76      | )      |   |   | (1.4 | %) |
| Property management and other services               |   |   | 712    |   |   |   | -      |     |   |   | 712      |   |   |   | 100.0 | % |
| Parking                                              |   |   | 2,038  |   |   |   | 2,022  |     |   |   | 16       |   |   |   | 0.8 | % |
| Other                                                |   |   | 580    |   |   |   | 95     |     |   |   | 485      |   |   |   | 510.5 | % |
| Total revenue                                        |   |   | 18,922 |   |   |   | 17,934 |     |   |   | 988      |   |   |   | 5.5 | % |
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| Expenses:                                            |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| Rental property operating                            |   |   | 9,509  |   |   |   | 9,619  |     |   |   | (110     | )      |   |   | (1.1 | %) |
| General and administrative                           |   |   | 2,567  |   |   |   | 607    |     |   |   | 1,960    |   |   |   | 322.9 | % |
| Depreciation and amortization                        |   |   | 4,938  |   |   |   | 5,772  |     |   |   | (834     | )      |   |   | (14.4 | %) |
| Interest                                             |   |   | 7,327  |   |   |   | 6,603  |     |   |   | 724      |   |   |   | 11.0 | % |
| Abandoned offering costs                             |   |   | 420    |   |   |   | -      |     |   |   | 420      |   |   |   | 100.0 | % |
| Acquisition costs                                    |   |   | 199    |   |   |   | -      |     |   |   | 199      |   |   |   | 100.0 | % |
| Total expenses                                       |   |   | 24,960 |   |   |   | 22,601 |     |   |   | 2,359    |   |   |   | 10.4 | % |
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| Loss before equity in net earnings of unconsolidated |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| joint ventures and non-operating income              |   |   | (6,038 | )      |   |   | (4,667 | )        |   |   | (1,371   | )      |   |   | (29.4 | %) |
| Equity in net earnings of unconsolidated             |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| joint ventures                                       |   |   | 96     |   |   |   | 11     |     |   |   | 85       |   |   |   | 772.7 | % |
| Non-operating income                                 |   |   | 524    |   |   |   | -      |     |   |   | 524      |   |   |   | 100.0 | % |
| Net loss                                             |   | $      | (5,418 | )      |   | $      | (4,656 | )        |   | $      | (762     | )      |   |   | (16.4 | %) |
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |

|   | Revenues |
|--------|----------|

----

----

| ·   | Unrestricted and restricted cash on hand; |
|--------------------|-------------------------------------------|

| ·   | Net cash flow generated from operations; |
|--------------------|------------------------------------------|

| ·   | Contribution of existing wholly-owned assets to joint ventures; |
|--------------------|-----------------------------------------------------------------|

| ·   | Asset dispositions; and/or |
|--------------------|----------------------------|

| ·   | Proceeds from additional secured or unsecured debt financings. |
|--------------------|----------------------------------------------------------------|

----

|                                              |   |   |   |
|---------------------------------------------------|--------|--------|--------|
| Tax, insurance and other working capital reserves |   | $      | 3,257  |   |
| Leasing and capital expenditure reserves          |   |   | 2,476  |   |
| Ground lease reserves                             |   |   | 1,055  |   |
| Collateral accounts                               |   |   | 2,519  |   |
| Reserve for letter of credit                      |   |   | 1,510  |   |
|                                              |   | $      | 10,817 |   |
|                                              |   |   |   |   |

----

| ·   | Property operating and corporate expenses; |
|--------------------|--------------------------------------------|

| ·   | Capital expenditures (including building and tenant improvements and leasing commissions); |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Debt maturities and financing costs; and/or |
|--------------------|---------------------------------------------|

| ·   | Dividends to stockholders and distributions to limited partners of our Operating Partnership. |
|--------------------|-----------------------------------------------------------------------------------------------|

----

----

----

|   PROPERTY                      |                                                                                  |   AMOUNT                                                                                          |   |   INTEREST RATE |     |   MATURITY DATE |   |  BALANCE DUE AT MATURITY DATE                                                              |   |  PREPAYMENT/DEFEASANCE |
|-------------------------------------------|---------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|--------|---------------------------|----------|---------------------------|--------|-------------------------------------------------------------------------------------------------|--------|-----------------------------|
| Pacific Business News Building (1)        |  $            11,601 |                                                                                                        | 11.98% |                      | 4/6/2010 |                      | (1)    |                                                                                            |   |
| City Square (Senior) (2)                  |                                                                                  |                27,500            |   | 5.58%                     |     | 9/1/2010                  |   | (2)                                                                                             |   |                        |
| City Square (Mezannine) (3)               |                                                                                  |                25,293            |   | LIBOR + 7.35%             |     | 9/1/2010                  |   | (3)                                                                                             |   |                        |
| Clifford Center (4)                       |                                                                                  |                  3,154 |   | 6.00%                     |     | 8/15/2011                 |   |                3,032 |   | (5)                         |
| First Insurance Center                    |                                                                                  |                38,000            |   | 5.74%                     |     | 1/1/2016                  |   |              38,000            |   | (6)                         |
| First Insurance Center                    |                                                                                  |                14,000            |   | 5.40%                     |     | 1/6/2016                  |   |              14,000            |   | (7)                         |
| Sorrento Technology Center (8)            |                                                                                  |                11,630            |   | 5.75% (9)                 |     | 1/11/2016 (9)             |   |              10,825            |   | (10)                        |
| Pan Am Building                           |                                                                                  |                60,000            |   | 6.17%                     |     | 8/11/2016                 |   |              60,000            |   | (11)                        |
| Waterfront Plaza                          |                                                                                  |              100,000                       |   | 6.37%                     |     | 9/11/2016                 |   |            100,000                       |   | (12)                        |
| Waterfront Plaza                          |                                                                                  |                11,000            |   | 6.37%                     |     | 9/11/2016                 |   |              11,000            |   | (13)                        |
| Davies Pacific Center                     |                                                                                  |                95,000            |   | 5.86%                     |     | 11/11/2016                |   |              95,000            |   | (14)                        |
| Subtotal                                  |                                                                                  |  $          397,178                                  |   |                      |     |                      |   |                                                                                            |   |                        |
| Revolving line of credit (15)             |                                                                                  |                25,000            |   | 1.25%                     |     | 12/31/2013                |   |              25,000            |   |                        |
|   Outstanding principal balance |                                                                                  |  $          422,178                                  |   |                      |     |                      |   |                                                                                            |   |                        |
| Less: Unamortized discount, net           |                                                                                  |                (1,536)           |   |                      |     |                      |   |                                                                                            |   |                        |
| Net                                       |                                                                                  |  $          420,642                                  |   |                      |     |                      |   |                                                                                            |   |                        |
|                                      |                                                                                  |                                                                                                        |   |                      |     |                      |   |                                                                                            |   |                        |

| (1) | The loan secured by the Pacific Business News Building had matured and we had not repaid the principal balance as of March 31, 2011.  As a result, interest was being incurred at the default rate of 11.98%.  Subsequent to March 31, 2011, this property was contributed to a joint venture with a third party and the joint venture repaid the loan at a discount.  For additional information, see “Liquidity and Capital Resources” above. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The loan secured by the City Square property had matured and we had not repaid the principal balance as of March 31, 2011.  We entered into a forbearance agreement with the lender pursuant to which the default interest of 5% in excess of the stated rate and late charge penalties in the amount of approximately $1.9 million will be forgiven if the loan is repaid in full prior to April 29, 2011.  Subsequent to March 31, 2011, this property was contributed to a joint venture with a third party.  The joint venture assumed this loan in full and the maturity date was extended to June 15, 2011.  For additional information, see “Liquidity and Capital Resources” above. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The loan secured by a pledge of the ownership interests in the entities owning the City Square property had matured and we had not repaid the principal balance as of March 31, 2011.  As a result, interest was being incurred at the default rate of LIBOR + 7.35%.  Subsequent to March 31, 2011, this property was contributed to a joint venture with a third party and the joint venture repaid the loan at a discount. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Requires monthly principal and interest payments of $39.8 thousand. The initial maturity date is August 15, 2011.  We have the option to extend the maturity date to August 15, 2014 for a nominal fee.  We expect to exercise this option. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Loan is prepayable subject to a prepayment premium in an amount equal to the greater of 3% of outstanding principal amount or yield maintenance.  No premium due after October 1, 2015.  Loan may also be defeased. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Loan is not prepayable until October 6, 2015; however, loan may be defeased.  No premium is due upon prepayment. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (8) | Requires monthly principal and interest payments in the amount of $69 thousand.  The loan also requires us to deposit letters of credit totaling $0.6 million in the event that certain tenants cease occupancy, go dark or give us notice of their intent to vacate the property.  We expect to fund these letters of credit in the second quarter of 2011. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Although the maturity date is January 11, 2036, January 11, 2016 is the anticipated repayment date because the interest rate adjusts as of January 11, 2016 to greater of 7.75% or treasury rate plus 70 basis points, plus 2.0%. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | No prepayment is permitted prior to October 11, 2015.  Loan may be defeased. |
|------|----------------------------------------------------------------------------------------|

| (11) | Loan is prepayable subject to a prepayment premium equal to greater of 1% of principal balance of loan or yield maintenance.  No premium is due after May 11, 2016. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Loan may be prepaid subject to payment of a yield maintenance-based prepayment premium; no premium is due after June 11, 2016.  Loan may also be defeased. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13) | Loan may be prepaid subject to payment of a yield maintenance-based prepayment premium; no premium is due after June 11, 2016. |
|------|--------------------------------------------------------------------------------------------------------------------------------|

| (14) | Loan is prepayable, subject to prepayment premium equal to greater of (a) 1% of amount prepaid or (b) yield maintenance.  No premium due after August 11, 2016. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (15) | The revolving line of credit matures on December 31, 2013.  See “Revolving Line of Credit” below. |
|------|-------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

----

----

----

Item 3. 

Item 4. 

PART II 

Item 1. 

Item 1A. 

----

| ·   | the financial condition and/or operating results of the issuer appear to be unsatisfactory, |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | it appears that the extent of public distribution or the aggregate market value of the security has become so reduced as to make further dealings on the NYSE Amex inadvisable, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the issuer has sold or otherwise disposed of its principal operating assets or has ceased to be an operating company, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | the issuer has failed to comply with its listing agreements with the NYSE Amex, or |
|--------------------|------------------------------------------------------------------------------------|

| ·   | any other event occurs or any condition exists which makes further dealings on the NYSE Amex unwarranted. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

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Item 2. 

Item 3. 

Item 4. 

Item 5

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Item 6. 

| Exhibit No.  |  Description                                                                                                                                            |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.1               | Articles of Amendment and Restatement of the Company (previously filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2               | Articles Supplementary of the Company dated November 20, 2009 (previously filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.3               | Articles of Amendment of the Company dated November 20, 2009 (previously filed as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.4               | Articles of Amendment of the Company dated January 5, 2010 (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 5, 2010 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.5               | Articles Supplementary of Board of Directors Reclassifying and Designating a series of common stock as Senior Common Stock, dated March 4, 2010 (previously filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed March 9, 2010 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.6               | Certificate of Correction to Articles Supplementary, dated April 30, 2010 (previously filed as Exhibit 3.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.7               | Articles of Amendment of the Company dated November 1, 2010 (previously filed as Exhibit 3.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.8               | Amended and Restated Bylaws dated December 20, 2010 (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 27, 2010 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.1              | Subscription Agreement, dated as of January 3, 2011, among Pacific Office Properties Trust, Inc. and the persons named therein (previously filed as Exhibit 10.50 to the Company’s Amendment No. 1 to Form S-11 filed January 3, 2011 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2              | Exchange Agreement, dated as of January 3, 2011, among Pacific Office Properties, L.P. and the persons named therein (previously filed as Exhibit 10.51 to the Company’s Amendment No. 1 to Form S-11 filed January 3, 2011 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3              | Amended and Restated Stock Purchase, Representation, Warranty and Indemnity Agreement, dated as of February 17, 2011, among Pacific Office Properties, L.P., Jay H. Shidler, JRI Equities II, LLC, MJR Equities, LLC, Lawrence J. Taff and James C. Reynolds. (Filed herewith.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.4              | Amended and Restated Agreement to Terminate Advisory Agreement, dated as of February 17, 2011, among Pacific Office Properties Trust, Inc., Pacific Office Properties, L.P. and Pacific Office Management, Inc. (Filed herewith.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.5              | Amended and Restated Stock Purchase Agreement, dated as of February 17, 2011, among Pacific Office Properties Trust, Inc., Pacific Office Management, Inc. and Pacific Office Holding, Inc. (Filed herewith.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.6              | Master Amendment to Certain Contribution Agreements, dated as of January 3, 2011, between Pacific Office Properties, L.P. and POP Venture, LLC. (previously filed as Exhibit 10.55 to the Company’s Amendment No. 1 to Form S-11 filed January 3, 2011 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

----

|    |                                                                                                                                                                                                                                     |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.7         | Agreement and General Release, effective as of February 8, 2011, between Pacific Office Management, Inc., Pacific Office Properties Trust, Inc., Pacific Office Properties, L.P. and James R. Wolford. (Filed herewith.)                 |
|         |                                                                                                                                                                                                                                     |
| 10.8         | Amended and Restated Employment Agreement, effective as of February 1, 2011, between Pacific Office Management, Inc., Pacific Office Properties Trust, Inc., Pacific Office Properties, L.P. and James R. Ingebritsen. (Filed herewith.) |
|         |                                                                                                                                                                                                                                     |
| 31.1         | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)                                                                                                                    |
|         |                                                                                                                                                                                                                                     |
| 31.2         | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)                                                                                                                    |
|         |                                                                                                                                                                                                                                     |
| 32.1         | Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Furnished herewith.)                                                                  |
|         |                                                                                                                                                                                                                                     |
| 32.2         | Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Furnished herewith.)                                                                  |

----

|                     | PACIFIC OFFICE PROPERTIES TRUST, INC. |                           |
|--------------------------|---------------------------------------|--------------------------------|
|                     |                                  |                           |   |
| Date:  May 16, 2011 | By:                                   | /s/  James R. Ingebritsen |   |
|                     |                                  | James R. Ingebritsen           |   |
|                     |                                  | Chief Executive Officer        |   |
|                     |                                  |                           |   |

|   |   |                             |
|--------|--------|----------------------------------|
|   |   |                             |   |
|   | By:    | /s/   Michael C. Burer |   |
|   |   | Michael C. Burer                 |   |
|   |   | Chief Financial Officer          |   |
|   |   |                             |   |

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