----

----

|   | 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 | 34     |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                  | 49     |
| Item 4. Controls and Procedures                                                                     | 49     |
| PART II – OTHER INFORMATION                                                                   |   |
| Item 1. Legal Proceedings                                                                           | 50     |
| Item 1A. Risk Factors                                                                               | 50     |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 51     |
| Item 3. Defaults Upon Senior Securities                                                             | 51     |
| Item 4. (Removed and Reserved)                                                                      | 51     |
| Item 5. Other Information                                                                           | 51     |
| Item 6. Exhibits                                                                                    | 52     |
| Certification of the Chief Executive Officer                                                        |   |
| Certification of the Chief Financial Officer                                                        |   |
| Certification of the Chief Executive Officer                                                        |   |
| Certification of the Chief Financial Officer                                                        |   |

----

|                                                                                                              |   | September 30, 2010 |     |   | December 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------|--------|--------------------|----------|--------|-------------------|--------|
| ASSETS                                                                                                            |   |               |     |   |              |   |
| Investments in real estate, net                                                                                   |   | $                  | 378,274  |   |              | $      | 382,950 |   |
| Cash and cash equivalents                                                                                         |   |               | 7,355    |   |              |   | 2,354 |   |
| Restricted cash                                                                                                   |   |               | 7,232    |   |              |   | 7,348 |   |
| Rents and other receivables, net                                                                                  |   |               | 7,441    |   |              |   | 6,471 |   |
| Intangible assets, net                                                                                            |   |               | 28,943   |   |              |   | 33,228 |   |
| Acquired above-market leases, net                                                                                 |   |               | 403      |   |              |   | 612 |   |
| Other assets, net                                                                                                 |   |               | 13,213   |   |              |   | 5,055 |   |
| Goodwill                                                                                                          |   |               | 62,019   |   |              |   | 62,019 |   |
| Investments in unconsolidated joint ventures                                                                      |   |               | 9,444    |   |              |   | 10,911 |   |
| Total assets                                                                                                      |   | $                  | 514,324  |   |              | $      | 510,948 |   |
|                                                                                                              |   |               |     |   |              |   |   |   |
| LIABILITIES AND EQUITY                                                                                            |   |               |     |   |              |   |   |   |
| Mortgage and other loans, net                                                                                     |   | $                  | 419,720  |   |              | $      | 406,439 |   |
| Unsecured notes payable to related parties                                                                        |   |               | 21,104   |   |              |   | 21,104 |   |
| Accounts payable and other liabilities                                                                            |   |               | 30,601   |   |              |   | 22,000 |   |
| Acquired below-market leases, net                                                                                 |   |               | 8,420    |   |              |   | 10,124 |   |
| Total liabilities                                                                                                 |   |               | 479,845  |   |              |   | 459,667 |   |
|                                                                                                              |   |               |     |   |              |   |   |   |
| Commitments and contingencies                                                                                     |   |               |     |   |              |   |   |   |
|                                                                                                              |   |               |     |   |              |   |   |   |
| Equity:                                                                                                           |   |               |     |   |              |   |   |   |
| Preferred Stock, $0.0001 par value, 100,000,000 shares authorized, one share of Proportionate                     |   |               |     |   |              |   |   |   |
| Voting Preferred Stock issued and outstanding at September 30, 2010 and December 31, 2009                         |   |               | -        |   |              |   | - |   |
| Senior Common Stock, $0.0001 par value (liquidation preference $10 per share, $6,633 and $0, respectively)        |   |               |     |   |              |   |   |   |
| 40,000,000 shares authorized, 663,394 shares issued and outstanding at September 30, 2010;                        |   |               |     |   |              |   |   |   |
| 0 shares authorized, issued and outstanding at December 31, 2009                                                  |   |               | 5,905    |   |              |   | - |   |
| Listed Common Stock, $0.0001 par value, 599,999,900 shares authorized, 3,903,050 shares issued and outstanding at |   |               |     |   |              |
| September 30, 2010; 239,999,900 shares authorized, 3,850,420 shares issued and outstanding at December 31, 2009   |   |               | 185      |   |              |   | 185 |   |
| Class B Common Stock, $0.0001 par value, 100 shares authorized, issued and outstanding at September 30, 2010      |   |               |     |   |              |
| and December 31, 2009                                                                                             |   |               | -        |   |              |   | - |   |
| Additional paid-in capital                                                                                        |   |               | -        |   |              |   | - |   |
| Cumulative deficit                                                                                                |   |               | (137,336 | )      |              |   | (132,511 | ) |
| Total stockholders' equity (deficit)                                                                              |   |               | (131,246 | )      |              |   | (132,326 | ) |
| Non-controlling interests:                                                                                        |   |               |     |   |              |   |   |   |
| Preferred unitholders in the Operating Partnership                                                                |   |               | 127,268  |   |              |   | 127,268 |   |
| Common unitholders in the Operating Partnership                                                                   |   |               | 38,457   |   |              |   | 56,339 |   |
| Total equity                                                                                                      |   |               | 34,479   |   |              |   | 51,281 |   |
| Total liabilities and equity                                                                                      |   | $                  | 514,324  |   |              | $      | 510,948 |   |
|                                                                                                              |   |               |     |   |              |   |   |   |

----

|                                                         |   | For the three months ended September 30, |      |
|--------------------------------------------------------------|--------|------------------------------------------|-----------|
|                                                         |   | 2010                                     |      |   | 2009 |   |
|                                                         |   |                                     |      |   |   |   |
| Revenue:                                                     |   |                                     |      |   |   |   |
| Rental                                                       |   | $                                        | 10,876    |   |   | $ | 10,486 |   |
| Tenant reimbursements                                        |   |                                     | 5,324     |   |   |   | 5,163 |   |
| Parking                                                      |   |                                     | 2,025     |   |   |   | 2,012 |   |
| Other                                                        |   |                                     | 91        |   |   |   | 83 |   |
| Total revenue                                                |   |                                     | 18,316    |   |   |   | 17,744 |   |
|                                                         |   |                                     |      |   |   |   |   |   |
| Expenses:                                                    |   |                                     |      |   |   |   |   |   |
| Rental property operating                                    |   |                                     | 10,168    |   |   |   | 9,781 |   |
| General and administrative                                   |   |                                     | 687       |   |   |   | 351 |   |
| Depreciation and amortization                                |   |                                     | 5,649     |   |   |   | 6,913 |   |
| Interest                                                     |   |                                     | 9,133     |   |   |   | 6,823 |   |
| Loss on extinguishment of debt                               |   |                                     | -         |   |   |   | 171 |   |
| Acquisition costs                                            |   |                                     | 630       |   |   |   | - |   |
| Total expenses                                               |   |                                     | 26,267    |   |   |   | 24,039 |   |
|                                                         |   |                                     |      |   |   |   |   |   |
| Loss before equity in net earnings of unconsolidated         |   |                                     |      |   |   |   |   |   |
| joint ventures and non-operating income                      |   |                                     | (7,951    | ) |   |   | (6,295 | ) |
| Equity in net earnings of unconsolidated                     |   |                                     |      |   |   |   |   |   |
| joint ventures                                               |   |                                     | 140       |   |   |   | 189 |   |
| Non-operating income                                         |   |                                     | -         |   |   |   | 2 |   |
| Net loss                                                     |   |                                     | (7,811    | ) |   |   | (6,104 | ) |
|                                                         |   |                                     |      |   |   |   |   |   |
| Net (income) loss attributable to non-controlling interests: |   |                                     |      |   |   |   |   |   |
| Preferred unitholders in the Operating Partnership           |   |                                     | (568      | ) |   |   | (571 | ) |
| Common unitholders in the Operating Partnership              |   |                                     | 6,617     |   |   |   | 5,434 |   |
|                                                         |   |                                     | 6,049     |   |   |   | 4,863 |   |
| Dividends on Senior Common Stock                             |   |                                     | (49       | ) |   |   | - |   |
| Net loss attributable to common stockholders                 |   | $                                        | (1,811    | ) |   | $ | (1,241 | ) |
|                                                         |   |                                     |      |   |   |   |   |   |
| Net loss per common share - basic and diluted                |   | $                                        | (0.46     | ) |   | $ | (0.40 | ) |
|                                                         |   |                                     |      |   |   |   |   |   |
| Weighted average number of common shares                     |   |                                     |      |   |   |   |   |   |
| outstanding - basic and diluted                              |   |                                     | 3,903,150 |   |   |   | 3,112,888 |   |

----

|                                                         |   | For the nine months ended September 30, |      |
|--------------------------------------------------------------|--------|-----------------------------------------|-----------|
|                                                         |   | 2010                                    |      |   | 2009 |   |
|                                                         |   |                                    |      |   |   |   |
| Revenue:                                                     |   |                                    |      |   |   |   |
| Rental                                                       |   | $                                       | 31,621    |   |   | $ | 31,999 |   |
| Tenant reimbursements                                        |   |                                    | 16,742    |   |   |   | 16,184 |   |
| Parking                                                      |   |                                    | 6,093     |   |   |   | 6,080 |   |
| Other                                                        |   |                                    | 267       |   |   |   | 270 |   |
| Total revenue                                                |   |                                    | 54,723    |   |   |   | 54,533 |   |
|                                                         |   |                                    |      |   |   |   |   |   |
| Expenses:                                                    |   |                                    |      |   |   |   |   |   |
| Rental property operating                                    |   |                                    | 29,885    |   |   |   | 29,356 |   |
| General and administrative                                   |   |                                    | 2,091     |   |   |   | 1,997 |   |
| Depreciation and amortization                                |   |                                    | 17,178    |   |   |   | 20,470 |   |
| Interest                                                     |   |                                    | 22,580    |   |   |   | 20,348 |   |
| Loss on extinguishment of debt                               |   |                                    | -         |   |   |   | 171 |   |
| Acquisition costs                                            |   |                                    | 630       |   |   |   | - |   |
| Total expenses                                               |   |                                    | 72,364    |   |   |   | 72,342 |   |
|                                                         |   |                                    |      |   |   |   |   |   |
| Loss before equity in net earnings of unconsolidated         |   |                                    |      |   |   |   |   |   |
| joint ventures and non-operating income                      |   |                                    | (17,641   | ) |   |   | (17,809 | ) |
| Equity in net earnings of unconsolidated                     |   |                                    |      |   |   |   |   |   |
| joint ventures                                               |   |                                    | 184       |   |   |   | 406 |   |
| Non-operating income                                         |   |                                    | -         |   |   |   | 6 |   |
| Net loss                                                     |   |                                    | (17,457   | ) |   |   | (17,397 | ) |
|                                                         |   |                                    |      |   |   |   |   |   |
| Net (income) loss attributable to non-controlling interests: |   |                                    |      |   |   |
| Preferred unitholders in the Operating Partnership           |   |                                    | (1,704    | ) |   |   | (1,696 | ) |
| Common unitholders in the Operating Partnership              |   |                                    | 15,113    |   |   |   | 15,680 |   |
|                                                         |   |                                    | 13,409    |   |   |   | 13,984 |   |
| Dividends on Senior Common Stock                             |   |                                    | (53       | ) |   |   | - |   |
| Net loss attributable to common stockholders                 |   | $                                       | (4,101    | ) |   | $ | (3,413 | ) |
|                                                         |   |                                    |      |   |   |   |   |   |
| Net loss per common share - basic and diluted                |   | $                                       | (1.06     | ) |   | $ | (1.12 | ) |
|                                                         |   |                                    |      |   |   |   |   |   |
| Weighted average number of common shares                     |   |                                    |      |   |   |   |   |   |
| outstanding - basic and diluted                              |   |                                    | 3,869,991 |   |   |   | 3,059,678 |   |
|                                                         |   |                                    |      |   |   |   |   |   |

----

|                                                                           |   | For the nine months ended September 30, |    |
|--------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                           |   | 2010                                    |    |   | 2009 |   |
|                                                                           |   |                                    |    |   |   |   |
| Operating activities                                                           |   |                                    |    |   |   |   |
| Net loss                                                                       |   | $                                       | (17,457 | ) |   | $ | (17,397 | ) |
| Adjustments to reconcile net loss to net cash                                  |   |                                    |    |   |   |   |   |   |
| provided by (used in) operating activities:                                    |   |                                    |    |   |   |   |   |   |
| Depreciation and amortization                                                  |   |                                    | 17,178  |   |   |   | 20,470 |   |
| Deferred rent                                                                  |   |                                    | (984    | ) |   |   | (869 | ) |
| Deferred ground rents                                                          |   |                                    | 1,567   |   |   |   | 1,690 |   |
| Interest amortization                                                          |   |                                    | 1,044   |   |   |   | 1,135 |   |
| Share based compensation                                                       |   |                                    | 150     |   |   |   | 140 |   |
| Loss from extinguishment of debt                                               |   |                                    | -       |   |   |   | 171 |   |
| Above- and below-market lease amortization, net                                |   |                                    | (1,495  | ) |   |   | (1,820 | ) |
| Equity in net earnings of unconsolidated joint ventures                        |   |                                    | (184    | ) |   |   | (406 | ) |
| Net operating distributions received from unconsolidated                       |   |                                    |    |   |   |   |   |   |
|    joint ventures                                               |   |                                    | 179     |   |   |   | 179 |   |
| Bad debt expense                                                               |   |                                    | 362     |   |   |   | 663 |   |
| Changes in operating assets and liabilities:                                   |   |                                    |    |   |   |   |   |   |
| Restricted cash used for operating activities                                  |   |                                    | (233    | ) |   |   | 3,363 |   |
| Rents and other receivables                                                    |   |                                    | (348    | ) |   |   | 544 |   |
| Other assets                                                                   |   |                                    | (1,677  | ) |   |   | (775 | ) |
| Accounts payable and other liabilities                                         |   |                                    | 5,299   |   |   |   | (398 | ) |
| Net cash provided by operating activities                                      |   |                                    | 3,401   |   |   |   | 6,690 |   |
| Investing activities                                                           |   |                                    |    |   |   |   |   |   |
| Acquisition and improvement of real estate                                     |   |                                    | (5,865  | ) |   |   | (4,469 | ) |
| Deposit for acquisition of real estate                                         |   |                                    | (5,000  | ) |   |   | - |   |
| Capital distributions from unconsolidated joint ventures                       |   |                                    | 1,472   |   |   |   | 1,801 |   |
| Payment of leasing commissions                                                 |   |                                    | (1,249  | ) |   |   | (699 | ) |
| Decrease (increase) in restricted cash used for capital expenditures           |   |                                    | 349     |   |   |   | (1,540 | ) |
| Net cash used in investing activities                                          |   |                                    | (10,293 | ) |   |   | (4,907 | ) |
| Financing activities                                                           |   |                                    |    |   |   |   |   |   |
| Repayment of mortgage notes payable                                            |   |                                    | (352    | ) |   |   | (706 | ) |
| Proceeds from mortgage notes payable                                           |   |                                    | 238     |   |   |   | 811 |   |
| Repayments of revolving credit facility                                        |   |                                    | -       |   |   |   | (3,000 | ) |
| Borrowings from revolving credit facility                                      |   |                                    | 13,100  |   |   |   | 5,847 |   |
| Proceeds from sale of Senior Common Stock, net                                 |   |                                    | 5,905   |   |   |   | - |   |
| Deferred financing costs                                                       |   |                                    | -       |   |   |   | (178 | ) |
| Deferred offering costs                                                        |   |                                    | (1,935  | ) |   |   | (1,178 | ) |
| Security deposits                                                              |   |                                    | (97     | ) |   |   | (86 | ) |
| Senior Common Stock dividends                                                  |   |                                    | (24     | ) |   |   | - |   |
| Listed Common Stock dividends                                                  |   |                                    | (593    | ) |   |   | (501 | ) |
| Redemption of OP units                                                         |   |                                    | (500    | ) |   |   | - |   |
| Distributions to non-controlling interests - Preferred unitholders             |   |                                    | (1,704  | ) |   |   | (1,705 | ) |
| Distributions to non-controlling interests - Common unitholders                |   |                                    | (2,145  | ) |   |   | (2,146 | ) |
| Net cash provided by (used in) financing activities                            |   |                                    | 11,893  |   |   |   | (2,842 | ) |
| Increase in cash and cash equivalents                                          |   |                                    | 5,001   |   |   |   | (1,059 | ) |
| Balance at beginning of period                                                 |   |                                    | 2,354   |   |   |   | 4,463 |   |
| Balance at end of period                                                       |   | $                                       | 7,355   |   |   | $ | 3,404 |   |
| Supplemental cash flow information                                             |   |                                    |    |   |   |   |   |   |
| Interest paid                                                                  |   | $                                       | 18,217  |   |   | $ | 17,660 |   |
|                                                                           |   |                                    |    |   |   |   |   |   |
| Supplemental Disclosure of Non-Cash Investing and Financing Activities         |   |                                    |    |   |   |   |   |   |
|                                                                           |   |                                    |    |   |   |   |   |   |
| Accrued capital expenditures                                                   |   | $                                       | 1,103   |   |   | $ | 722 |   |
| Exchange of unsecured notes payable to related parties for Listed Common Stock |   | $                                       | -       |   |   | $ | 3,014 |   |
|                                                                           |   |                                    |    |   |   |   |   |   |

----

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

|                                    |   | Number of  |   |   | Property  |   |
|-----------------------------------------|--------|------------|--------|--------|-----------|--------|
|                                    |   | Properties |   |   | Buildings |   |   | PortfolioSq. Ft. |   |
| Wholly-owned properties                 |   |       | 8      |   |      |   | 11 |   |   |   | 2,265.339 |   |
| Unconsolidated joint venture properties |   |       | 16     |   |      |   | 34 |   |   |   | 2,417,372 |   |
| Total                                   |   |       | 24     |   |      |   | 45 |   |   |   | 4,682,711 |   |
|                                    |   |       |   |   |      |   |   |   |   |   |   |   |

|   | Transactions - |
|--------|----------------|

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

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

----

----

----

----

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

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

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

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

----

|   | Cash and Cash Equivalents - |
|--------|-----------------------------|

----

----

----

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

|   | Our investments in real estate, net, at September 30, 2010, and at December 31, 2009, are summarized as follows (in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | September 30, 2010 |    |   | December 31, 2009 |   |
|-------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                      |   |               |    |   |              |   |
| Land and land improvements                |   | $                  | 76,054  |   |              | $      | 76,054 |   |
| Building and building improvements        |   |               | 310,815 |   |              |   | 310,507 |   |
| Tenant improvements                       |   |               | 33,239  |   |              |   | 27,707 |   |
| Construction in progress                  |   |               | 3,941   |   |              |   | 3,311 |   |
| Furniture, fixtures and equipment         |   |               | 1,401   |   |              |   | 1,401 |   |
| Investments in real estate                |   |               | 425,450 |   |              |   | 418,980 |   |
| Less:  accumulated depreciation |   |               | (47,176 | )      |              |   | (36,030 | ) |
| Investments in real estate, net           |   | $                  | 378,274 |   |              | $      | 382,950 |   |

----

|   | Our identifiable intangible assets and acquired above- and below-market leases, net at September 30, 2010, and at December 31, 2009, are summarized as follows (in thousands): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                 |   | September 30, 2010 |    |   | December 31, 2009 |   |
|--------------------------------------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                                                                 |   |               |    |   |              |   |
| Acquired leasing commissions                                                         |   |               |    |   |              |   |
|           Gross amount             |   | $                  | 9,966   |   |              | $      | 8,857 |   |
|           Accumulated amortization |   |               | (5,270  | )      |              |   | (4,212 | ) |
|           Net balance              |   | $                  | 4,696   |   |              | $      | 4,645 |   |
|                                                                                 |   |               |    |   |              |   |   |   |
| Acquired leases in place                                                             |   |               |    |   |              |   |   |   |
|           Gross amount             |   | $                  | 16,725  |   |              | $      | 17,171 |   |
|           Accumulated amortization |   |               | (11,981 | )      |              |   | (10,234 | ) |
|           Net balance              |   | $                  | 4,744   |   |              | $      | 6,937 |   |
|                                                                                 |   |               |    |   |              |   |   |   |
| Acquired tenant relationship costs                                                   |   |               |    |   |              |   |   |   |
|           Gross amount             |   | $                  | 19,581  |   |              | $      | 19,581 |   |
|           Accumulated amortization |   |               | (6,279  | )      |              |   | (4,419 | ) |
|           Net balance              |   | $                  | 13,302  |   |              | $      | 15,162 |   |
|                                                                                 |   |               |    |   |              |   |   |   |
| Acquired other intangibles                                                           |   |               |    |   |              |   |   |   |
|           Gross amount             |   | $                  | 7,708   |   |              | $      | 7,767 |   |
|           Accumulated amortization |   |               | (1,507  | )      |              |   | (1,283 | ) |
|           Net balance              |   | $                  | 6,201   |   |              | $      | 6,484 |   |
|                                                                                 |   |               |    |   |              |   |   |   |
| Intangible assets, net                                                               |   | $                  | 28,943  |   |              | $      | 33,228 |   |
|                                                                                 |   |               |    |   |              |   |   |   |
| Acquired above-market leases                                                         |   |               |    |   |              |   |   |   |
|           Gross amount             |   | $                  | 2,206   |   |              | $      | 2,218 |   |
|           Accumulated amortization |   |               | (1,803  | )      |              |   | (1,606 | ) |
| Acquired above-market leases, net                                                    |   | $                  | 403     |   |              | $      | 612 |   |
|                                                                                 |   |               |    |   |              |   |   |   |
| Acquired below-market leases                                                         |   |               |    |   |              |   |   |   |
|           Gross amount             |   | $                  | 15,397  |   |              | $      | 15,571 |   |
|           Accumulated amortization |   |               | (6,977  | )      |              |   | (5,447 | ) |
| Acquired below-market leases, net                                                    |   | $                  | 8,420   |   |              | $      | 10,124 |   |

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

----

|                                                  |   | Three months ended September 30, 2010 |   |   | Three months ended September 30, 2009 |   |   | Nine monthsended September 30, 2010 |   |   | Nine monthsended September 30, 2009 |   |
|-------------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|
| Revenues:                                             |   |                                  |   |   |                                  |   |   |                                     |   |   |                                     |   |
| Rental                                                |   | $                                     | 11,528 |   |                                  | $      | 9,513  |                                     |   | $      | 34,431                                   |   |   | $ | 27,979 |   |
| Other                                                 |   |                                  | 2,385  |   |                                  |   | 2,160  |                                     |   |   | 7,211                                    |   |   |   | 6,471 |   |
| Total revenues                                        |   |                                  | 13,913 |   |                                  |   | 11,673 |                                     |   |   | 41,642                                   |   |   |   | 34,450 |   |
|                                                  |   |                                  |   |   |                                  |   |   |                                     |   |   |                                     |   |   |   |   |   |
| Expenses:                                             |   |                                  |   |   |                                  |   |   |                                     |   |   |                                     |   |   |   |   |   |
| Rental operating                                      |   |                                  | 5,409  |   |                                  |   | 4,768  |                                     |   |   | 16,966                                   |   |   |   | 14,223 |   |
| Depreciation and amortization                         |   |                                  | 5,443  |   |                                  |   | 4,486  |                                     |   |   | 17,301                                   |   |   |   | 14,578 |   |
| Interest                                              |   |                                  | 5,955  |   |                                  |   | 3,972  |                                     |   |   | 17,994                                   |   |   |   | 12,581 |   |
| Total expenses                                        |   |                                  | 16,807 |   |                                  |   | 13,226 |                                     |   |   | 52,261                                   |   |   |   | 41,382 |   |
| Net loss                                              |   | $                                     | (2,894 | )      |                                  | $      | (1,553 | )                                        |   | $      | (10,619                                  | )      |   | $ | (6,932 | ) |
|                                                  |   |                                  |   |   |                                  |   |   |                                     |   |   |                                     |   |   |   |   |   |
| Equity in net earnings                                |   |                                  |   |   |                                  |   |   |                                     |   |   |                                     |   |   |   |   |   |
|    of unconsolidated joint venture (a) |   | $                                     | 140    |   |                                  | $      | 189    |                                     |   | $      | 184                                      |   |   | $ | 406 |   |

|                                        |   | September 30, 2010 |    |   | December 31, 2009 |   |
|---------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
| Investment in real estate, net              |   | $                  | 383,372 |   |              | $      | 400,700 |   |
| Other assets                                |   |               | 67,172  |   |              |   | 61,912 |   |
| Total assets                                |   | $                  | 450,544 |   |              | $      | 462,612 |   |
|                                        |   |               |    |   |              |   |   |   |
| Mortgage and other loans                    |   | $                  | 365,835 |   |              | $      | 366,543 |   |
| Other liabilities                           |   |               | 19,673  |   |              |   | 15,543 |   |
| Total liabilities                           |   | $                  | 385,508 |   |              | $      | 382,086 |   |
|                                        |   |               |    |   |              |   |   |   |
| Investment in unconsolidated joint ventures |   | $                  | 9,444   |   |              | $      | 10,911 |   |
|                                        |   |               |    |   |              |   |   |   |

| (a) | The total earnings of all the respective joint ventures of the Company, for all periods presented, are in a loss position. However, the equity in net earnings of the joint ventures attributable to the Company is positive for all 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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                |   | September 30, 2010 |   |   | December 31, 2009 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
| Deferred loan fees, net of accumulated amortization of $1.5 million and $1.2 million at September 30, 2010 and December 31, 2009, respectively |   | $                  | 1,726  |   |              | $      | 2,008 |   |
| Equity offering costs                                                                                                                               |   |               | 3,777  |   |              |   | 1,842 |   |
| Prepaid expenses                                                                                                                                    |   |               | 2,710  |   |              |   | 1,205 |   |
| Acquisition deposits                                                                                                                                |   |               | 5,000  |   |              |   | - |   |
| Total other assets, net                                                                                                                             |   | $                  | 13,213 |   |              | $      | 5,055 |   |

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

|                                         |   | September 30, 2010 |   |   | December 31, 2009 |   |
|----------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
| Accounts payable                             |   | $                  | 2,172  |   |              | $      | 597 |   |
| Interest payable                             |   |               | 5,004  |   |              |   | 2,644 |   |
| Deferred revenue                             |   |               | 1,712  |   |              |   | 2,039 |   |
| Security deposits                            |   |               | 2,688  |   |              |   | 2,782 |   |
| Deferred straight-line ground rent           |   |               | 8,187  |   |              |   | 6,620 |   |
| Related party payable (Note 12 )             |   |               | 1,245  |   |              |   | 1,113 |   |
| Accrued expenses (1)                         |   |               | 8,963  |   |              |   | 5,599 |   |
| Asset retirement obligations                 |   |               | 630    |   |              |   | 606 |   |
| Total accounts payable and other liabilities |   | $                  | 30,601 |   |              | $      | 22,000 |   |

| (1) | Accrued expenses include $2.0 million of late penalties related to the loans secured by our Pacific Business News and City Square properties, which are currently in default – refer to note 8 for further discussion of the related loan terms. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           | Outstanding Principal Balance, Net at |    |   |              |   |
|--------------------------------|---------------------------------------|---------|--------|-------------------|--------|
| Property                       | September 30, 2010                    |    |   | December 31, 2009 |   | Interest Rate |   | Maturity Date |
| Pacific Business News Building | $                                     | 11,601  |   |              | $      | 11,666 |   |   | 6.98 | % (a) | 4/6/2010 (a) |
| City Square                    |                                  | 27,500  |   |              |   | 27,414 |   |   | 5.58 | % | 9/1/2010 (b) |
| City Square                    |                                  | 27,255  |   |              |   | 27,017 |   | LIBOR + 2.35% (c) |   | 9/1/2010 (c) |
| Clifford Center                |                                  | 3,296   |   |              |   | 3,501 |   |   | 6.00 | % | 8/15/2011(d) |
| First Insurance Center         |                                  | 37,509  |   |              |   | 37,439 |   |   | 5.74 | % | 1/1/2016 |
| First Insurance Center         |                                  | 13,817  |   |              |   | 13,791 |   |   | 5.40 | % | 1/6/2016 |
| Sorrento Technology Center     |                                  | 11,552  |   |              |   | 11,625 |   |   | 5.75 | % | 1/11/2016 |
| Pan Am Building                |                                  | 59,968  |   |              |   | 59,964 |   |   | 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          |                                  | 94,176  |   |              |   | 94,075 |   |   | 5.86 | % | 11/11/2016 |
| Subtotal                       |                                  | 397,673 |   |              |   | 397,492 |   |   |   |   |   |
| Revolving line of credit (e)   |                                  | 22,047  |   |              |   | 8,947 |   |   | 1.25 | % | 12/31/2013 |
| Total                          | $                                     | 419,720 |   |              | $      | 406,439 |   |   |   |   |   |

| (a) | The loan secured by the Pacific Business News Building has matured and we have not repaid the principal balance.  As a result, interest is being incurred at the default rate of 11.98%.  The Company is currently in negotiations with the lender to extend the loan. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The loan secured by the City Square property has matured and we have not repaid the principal balance.  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 the expiration of the forbearance period, which is the earliest to occur of five business days following the completion of our proposed public offering of Listed Common Stock, certain breaches or defaults by us under the forbearance agreement or loan documents, and January 14, 2011 (refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The loan secured by a pledge of the ownership interests in the entities owning the City Square property has matured and we have not repaid the principal balance.  As a result, interest is being incurred at the default rate of LIBOR + 7.35%.  The Company is currently in negotiations with the lender. 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. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | The revolving line of credit matures on December 31, 2013.  Amounts borrowed under the FHB Credit Facility 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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2010       |   | $      | 66,464  |   |
|------------|--------|--------|---------|--------|
| 2011       |   |   | 3,375   |   |
| 2012       |   |   | 157     |   |
| 2013       |   |   | 22,215  |   |
| 2014       |   |   | 179     |   |
| Thereafter |   |   | 329,015 |   |
| Total      |   | $      | 421,405 |   |
|       |   |   |    |   |

|   | Revolving Line of Credit - |
|--------|----------------------------|

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

----

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

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

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

----

----

----

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

|                                             |   | Stockholders' Equity (Deficit) |     |   | Non-controlling interests |   |    | Total  |   |
|--------------------------------------------------|--------|--------------------------------|----------|--------|---------------------------|--------|---------|--------|--------|
|                                             |   |                           |     |   |                      |   |    |   |   |
| Balance at December 31, 2009                     |   | $                              | (132,326 | )      |                      | $      | 183,607 |   |   | $ | 51,281 |   |
| Net loss attributable to common stockholders (1) |   |                           | (4,101   | )      |                      |   | (13,409 | )      |   |   | (17,510 | ) |
| Stock compensation                               |   |                           | 150      |   |                      |   | -       |   |   |   | 150 |   |
| Senior Common Stock issued                       |   |                           | 5,905    |   |                      |   | -       |   |   |   | 5,905 |   |
| Common unit redemption                           |   |                           | (279     | )      |                      |   | (621    | )      |   |   | (900 | ) |
| Dividends and distributions                      |   |                           | (595     | )      |                      |   | (3,852  | )      |   |   | (4,447 | ) |
| Balance at September 30, 2010                    |   | $                              | (131,246 | )      |                      | $      | 165,725 |   |   | $ | 34,479 |   |
|                                             |   |                           |     |   |                      |   |    |   |   |   |   |   |

| (1) | Net loss attributable to common stockholders includes Senior Common Stock dividends of $53 thousand. |
|-----|------------------------------------------------------------------------------------------------------|

----

----

|   | Loss per Share - |
|--------|------------------|

|                                                     |   | For the three months ended September 30, |      |   | For the nine months ended September 30, |   |
|----------------------------------------------------------|--------|------------------------------------------|-----------|--------|-----------------------------------------|--------|
|                                                     |   | 2010                                     |      |   | 2009                                    |   |   | 2010 |   |   | 2009 |   |
|                                                     |   |                                     |      |   |                                    |   |   |   |   |   |   |   |
| Net loss attributable to common                          |   |                                     |      |   |                                    |   |   |   |   |   |   |   |
| stockholders - basic and diluted (1)                     |   | $                                        | (1,811    | )      |                                    | $      | (1,241 | ) |   | $ | (4,101 | ) |   | $ | (3,413 | ) |
|                                                     |   |                                     |      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares                 |   |                                     | 3,903,150 |   |                                    |   | 3,112,888 |   |   |   | 3,869,991 |   |   |   | 3,059,678 |   |
| Potentially dilutive common shares (2)                   |   |                                     | —   |   |                                    |   | — |   |   |   | — |   |   |   | — |   |
| Weighted average number of common                        |   |                                     |      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| shares/units outstanding — basic and diluted  |   |                                     | 3,903,150 |   |                                    |   | 3,112,888 |   |   |   | 3,869,991 |   |   |   | 3,059,678 |   |
| Net loss per common share — basic and diluted |   | $                                        | (0.46     | )      |                                    | $      | (0.40 | ) |   | $ | (1.06 | ) |   | $ | (1.12 | ) |
|                                                     |   |                                     |      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |

| (1) | For the three and nine months ended September 30, 2010 and September 30, 2009, net loss attributable to common stockholders includes $0.6 million and $1.7 million, respectively, of priority allocation to Preferred Unit holders each, respectively, which is included in non-controlling interests in the condensed consolidated statements of operations. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Approximately 47,615 non-vested restricted stock units, 32,597,528 shares of Listed Common Stock which may be issued upon redemption of Preferred Units, and 275,483 shares of Senior Common Stock, for the three months ended September 30, 2010, and  approximately 47,615 non-vested restricted stock units, 32,597,528 shares of Listed Common Stock which may be issued upon redemption of Preferred Units, and 99,309 shares of Senior Common Stock, for the nine months ended September 30, 2010,were excluded from the calculation of diluted earnings per share because they were anti-dilutive due to our net loss position. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Approximately 52,630 non-vested restricted stock units and 32,597,528 shares of Listed Common Stock which may be issued upon redemption of Preferred Units for the three months ended September 30, 2009, and approximately 52,630 non-vested restricted stock units and 32,597,528 shares of Listed Common Stock which may be issued upon redemption of Preferred Units for the nine months ended September 30, 2009, were excluded from the calculation of diluted earnings per share because they were anti-dilutive due to our net loss position.  Refer to “Equity” section of this footnote for the redemption and conversion terms and conditions of the Preferred Units and Senior Common Stock. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 12. | Related Party Transactions |
|-----|----------------------------|

----

|                                     |   | For the three months ended September 30, |   |   | For the nine months ended September 30, |   |
|------------------------------------------|--------|------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                     |   | 2010                                     |   |   | 2009                                    |   |   | 2010 |   |   | 2009 |   |
| Property management fees                 |   |                                     |   |   |                                    |   |   |   |   |   |   |   |
|   to affiliates of Advisor (1) |   | $                                        | 715    |   |                                    | $      | 764 |   |   | $ | 2,276 |   |   | $ | 2,544 |   |
| Leasing commissions (2)                  |   |                                     | 1      |   |                                    |   | 86 |   |   |   | 254 |   |   |   | 245 |   |
| Corporate management fees to Advisor     |   |                                     | 188    |   |                                    |   | 188 |   |   |   | 563 |   |   |   | 563 |   |
| Interest                                 |   |                                     | 558    |   |                                    |   | 500 |   |   |   | 1,556 |   |   |   | 1,379 |   |
| Construction management fees and other   |   |                                     | 6      |   |                                    |   | 14 |   |   |   | 42 |   |   |   | 49 |   |
| Total                                    |   | $                                        | 1,468  |   |                                    | $      | 1,552 |   |   | $ | 4,691 |   |   | $ | 4,780 |   |

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

| (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. |
|-----|---------------------------------------------------------------------------------------------------------------------|

----

----

| 14. | Segment Reporting |
|-----|-------------------|

----

|                                                    |   | For the three months ended September 30, 2010 |   |   |         |   |
|---------------------------------------------------------|--------|-----------------------------------------------|--------|--------|--------------|--------|
|                                                    |   | Honolulu                                      |   |   | Western U.S. |   |   | Corporate |   |   | Total |   |
| Revenue:                                                |   |                                          |   |   |         |   |   |   |   |   |   |   |
| Rental                                                  |   | $                                             | 7,776  |   |         | $      | 3,096 |   |   | $ | 4 |   |   | $ | 10,876 |   |
| Tenant reimbursements                                   |   |                                          | 5,046  |   |         |   | 278 |   |   |   | - |   |   |   | 5,324 |   |
| Parking                                                 |   |                                          | 1,782  |   |         |   | 243 |   |   |   | - |   |   |   | 2,025 |   |
| Other                                                   |   |                                          | 32     |   |         |   | 8 |   |   |   | 51 |   |   |   | 91 |   |
| Total revenue                                           |   |                                          | 14,636 |   |         |   | 3,625 |   |   |   | 55 |   |   |   | 18,316 |   |
| Expenses:                                               |   |                                          |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Rental property operating                               |   |                                          | 8,161  |   |         |   | 2,007 |   |   |   | - |   |   |   | 10,168 |   |
| General and administrative                              |   |                                          | -      |   |         |   | - |   |   |   | 687 |   |   |   | 687 |   |
| Depreciation and amortization                           |   |                                          | 3,929  |   |         |   | 1,720 |   |   |   | - |   |   |   | 5,649 |   |
| Interest                                                |   |                                          | 5,996  |   |         |   | 2,469 |   |   |   | 668 |   |   |   | 9,133 |   |
| Loss on extinguishment of debt                          |   |                                          | -      |   |         |   | - |   |   |   | - |   |   |   | - |   |
| Acquisition costs                                       |   |                                          | -      |   |         |   | - |   |   |   | 630 |   |   |   | 630 |   |
| Total expenses                                          |   |                                          | 18,086 |   |         |   | 6,196 |   |   |   | 1,985 |   |   |   | 26,267 |   |
| Loss before equity in net earnings of unconsolidated    |   |                                          |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| joint ventures and non-operating income                 |   | $                                             | (3,450 | )      |         | $      | (2,571 | ) |   | $ | (1,930 | ) |   | $ | (7,951 | ) |
| Equity in net earnings of unconsolidated joint ventures |   |                                          |   |   |         |   |   |   |   |   |   |   |   |   | 140 |   |
| Net loss attributable to non-controlling interests      |   |                                          |   |   |         |   |   |   |   |   |   |   |   |   | 6,049 |   |
| Dividends on Senior Common Stock                        |   |                                          |   |   |         |   |   |   |   |   |   |   |   |   | (49 | ) |
| Net loss attributable to common stockholders            |   |                                          |   |   |         |   |   |   |   |   |   |   |   | $ | (1,811 | ) |

----

|                                                    |   | For the nine months ended September 30, 2010 |   |   |         |   |
|---------------------------------------------------------|--------|----------------------------------------------|--------|--------|--------------|--------|
|                                                    |   | Honolulu                                     |   |   | Western U.S. |   |   | Corporate |   |   | Total |   |
| Revenue:                                                |   |                                         |   |   |         |   |   |   |   |   |   |   |
| Rental                                                  |   | $                                            | 22,253 |   |         | $      | 9,357 |   |   | $ | 11 |   |   | $ | 31,621 |   |
| Tenant reimbursements                                   |   |                                         | 15,887 |   |         |   | 855 |   |   |   | - |   |   |   | 16,742 |   |
| Parking                                                 |   |                                         | 5,367  |   |         |   | 726 |   |   |   | - |   |   |   | 6,093 |   |
| Other                                                   |   |                                         | 95     |   |         |   | 22 |   |   |   | 150 |   |   |   | 267 |   |
| Total revenue                                           |   |                                         | 43,602 |   |         |   | 10,960 |   |   |   | 161 |   |   |   | 54,723 |   |
| Expenses:                                               |   |                                         |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Rental property operating                               |   |                                         | 24,368 |   |         |   | 5,517 |   |   |   | - |   |   |   | 29,885 |   |
| General and administrative                              |   |                                         | -      |   |         |   | - |   |   |   | 2,091 |   |   |   | 2,091 |   |
| Depreciation and amortization                           |   |                                         | 11,837 |   |         |   | 5,341 |   |   |   | - |   |   |   | 17,178 |   |
| Interest                                                |   |                                         | 16,629 |   |         |   | 4,121 |   |   |   | 1,830 |   |   |   | 22,580 |   |
| Loss on extinguishment of debt                          |   |                                         | -      |   |         |   | - |   |   |   | - |   |   |   | - |   |
| Acquisition costs                                       |   |                                         | -      |   |         |   | - |   |   |   | 630 |   |   |   | 630 |   |
| Total expenses                                          |   |                                         | 52,834 |   |         |   | 14,979 |   |   |   | 4,551 |   |   |   | 72,364 |   |
| Loss before equity in net earnings of unconsolidated    |   |                                         |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| joint ventures and non-operating income                 |   | $                                            | (9,232 | )      |         | $      | (4,019 | ) |   | $ | (4,390 | ) |   | $ | (17,641 | ) |
| Equity in net earnings of unconsolidated joint ventures |   |                                         |   |   |         |   |   |   |   |   |   |   |   |   | 184 |   |
| Net loss attributable to non-controlling interests      |   |                                         |   |   |         |   |   |   |   |   |   |   |   |   | 13,409 |   |
| Dividends on Senior Common Stock                        |   |                                         |   |   |         |   |   |   |   |   |   |   |   |   | (53 | ) |
| Net loss attributable to common stockholders            |   |                                         |   |   |         |   |   |   |   |   |   |   |   | $ | (4,101 | ) |

----

|                                                    |   | For the three months ended September 30, 2009 |    |   |         |   |
|---------------------------------------------------------|--------|-----------------------------------------------|---------|--------|--------------|--------|
|                                                    |   | Honolulu                                      |    |   | Western U.S. |   |   | Corporate |   |   | Total |   |
| Revenue:                                                |   |                                          |    |   |         |   |   |   |   |   |   |   |
| Rental                                                  |   | $                                             | 7,303   |   |         | $      | 3,179 |   |   | $ | 4 |   |   | $ | 10,486 |   |
| Tenant reimbursements                                   |   |                                          | 4,945   |   |         |   | 218 |   |   |   | — |   |   |   | 5,163 |   |
| Parking                                                 |   |                                          | 1,761   |   |         |   | 251 |   |   |   | — |   |   |   | 2,012 |   |
| Other                                                   |   |                                          | 34      |   |         |   | - |   |   |   | 49 |   |   |   | 83 |   |
| Total revenue                                           |   |                                          | 14,043  |   |         |   | 3,648 |   |   |   | 53 |   |   |   | 17,744 |   |
| Expenses:                                               |   |                                          |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Rental property operating                               |   |                                          | 7,794   |   |         |   | 1,987 |   |   |   | — |   |   |   | 9,781 |   |
| General and administrative                              |   |                                          | — |   |         |   | — |   |   |   | 351 |   |   |   | 351 |   |
| Depreciation and amortization                           |   |                                          | 5,044   |   |         |   | 1,869 |   |   |   | — |   |   |   | 6,913 |   |
| Interest                                                |   |                                          | 5,341   |   |         |   | 844 |   |   |   | 638 |   |   |   | 6,823 |   |
| Loss on extinguishment of debt                          |   |                                          | — |   |         |   | — |   |   |   | 171 |   |   |   | 171 |   |
| Total expenses                                          |   |                                          | 18,179  |   |         |   | 4,700 |   |   |   | 1,160 |   |   |   | 24,039 |   |
| Loss before equity in net earnings of unconsolidated    |   |                                          |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| joint ventures and non-operating income                 |   | $                                             | (4,136  | )      |         | $      | (1,052 | ) |   | $ | (1,107 | ) |   | $ | (6,295 | ) |
| Equity in net earnings of unconsolidated joint ventures |   |                                          |    |   |         |   |   |   |   |   |   |   |   |   | 189 |   |
| Non-operating income                                    |   |                                          |    |   |         |   |   |   |   |   |   |   |   |   | 2 |   |
| Net loss attributable to non-controlling interests      |   |                                          |    |   |         |   |   |   |   |   |   |   |   |   | 4,863 |   |
| Net loss attributable to common stockholders            |   |                                          |    |   |         |   |   |   |   |   |   |   |   | $ | (1,241 | ) |
|                                                    |   |                                          |    |   |         |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                    |   | For the nine months ended September 30, 2009 |    |   |         |   |
|---------------------------------------------------------|--------|----------------------------------------------|---------|--------|--------------|--------|
|                                                    |   | Honolulu                                     |    |   | Western U.S. |   |   | Corporate |   |   | Total |   |
| Revenue:                                                |   |                                         |    |   |         |   |   |   |   |   |   |   |
| Rental                                                  |   | $                                            | 22,292  |   |         | $      | 9,696 |   |   | $ | 11 |   |   | $ | 31,999 |   |
| Tenant reimbursements                                   |   |                                         | 15,363  |   |         |   | 821 |   |   |   | — |   |   |   | 16,184 |   |
| Parking                                                 |   |                                         | 5,338   |   |         |   | 742 |   |   |   | — |   |   |   | 6,080 |   |
| Other                                                   |   |                                         | 97      |   |         |   | 24 |   |   |   | 149 |   |   |   | 270 |   |
| Total revenue                                           |   |                                         | 43,090  |   |         |   | 11,283 |   |   |   | 160 |   |   |   | 54,533 |   |
| Expenses:                                               |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Rental property operating                               |   |                                         | 23,423  |   |         |   | 5,933 |   |   |   | — |   |   |   | 29,356 |   |
| General and administrative                              |   |                                         | — |   |         |   | — |   |   |   | 1,997 |   |   |   | 1,997 |   |
| Depreciation and amortization                           |   |                                         | 14,780  |   |         |   | 5,690 |   |   |   | — |   |   |   | 20,470 |   |
| Interest                                                |   |                                         | 15,857  |   |         |   | 2,523 |   |   |   | 1,968 |   |   |   | 20,348 |   |
| Loss on extinguishment of debt                          |   |                                         | — |   |         |   | — |   |   |   | 171 |   |   |   | 171 |   |
| Total expenses                                          |   |                                         | 54,060  |   |         |   | 14,146 |   |   |   | 4,136 |   |   |   | 72,342 |   |
| Loss before equity in net earnings of unconsolidated    |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| joint ventures and non-operating income                 |   | $                                            | (10,970 | )      |         | $      | (2,863 | ) |   | $ | (3,976 | ) |   | $ | (17,809 | ) |
| Equity in net earnings of unconsolidated joint ventures |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   | 406 |   |
| Non-operating income                                    |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   | 6 |   |
| Net loss attributable to non-controlling interests      |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   | 13,984 |   |
| Net loss attributable to common stockholders            |   |                                         |    |   |         |   |   |   |   |   |   |   |   | $ | (3,413 | ) |
|                                                    |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                         |    |   |         |   |   |   |   |   |   |   |   |   |   |   |

|                        |   | Honolulu |    |   | Western U.S. |   |    | Corporate |   |   | Total  |   |
|-----------------------------|--------|----------|---------|--------|--------------|--------|---------|-----------|--------|--------|--------|--------|
| Total assets:               |   |     |    |   |         |   |    |      |   |   |   |   |
| September 30, 2010          |   | $        | 370,458 |   |         | $      | 120,879 |      |   | $      | 22,987 |   |   | $ | 514,324 |   |
| December 31, 2009           |   | $        | 373,006 |   |         | $      | 124,463 |      |   | $      | 13,479 |   |   | $ | 510,948 |   |
| Total goodwill:             |   |     |    |   |         |   |    |      |   |   |   |   |   |   |   |   |
| September 30, 2010          |   | $        | 40,416  |   |         | $      | 21,603  |      |   | $      | -      |   |   | $ | 62,019 |   |
| December 31, 2009           |   | $        | 40,416  |   |         | $      | 21,603  |      |   | $      | -      |   |   | $ | 62,019 |   |
| Capital expenditures        |   |     |    |   |         |   |    |      |   |   |   |   |   |   |   |   |
| For the three months ended: |   |     |    |   |         |   |    |      |   |   |   |   |   |   |   |   |
| September 30, 2010          |   | $        | 1,402   |   |         | $      | 69      |      |   | $      | -      |   |   | $ | 1,470 |   |
| September 30, 2009          |   | $        | 780     |   |         | $      | 621     |      |   | $      | -      |   |   | $ | 1,401 |   |
| For the nine months ended:  |   |     |    |   |         |   |    |      |   |   |   |   |   |   |   |   |
| September 30, 2010          |   | $        | 6,843   |   |         | $      | 126     |      |   | $      | -      |   |   | $ | 6,968 |   |
| September 30, 2009          |   | $        | 3,608   |   |         | $      | 861     |      |   | $      | -      |   |   | $ | 4,469 |   |

----

| 15. | Fair Value of Financial Instruments |
|-----|-------------------------------------|

| 16. | Subsequent Events |
|-----|-------------------|

----

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

----

----

| PROPERTY                                 |   | NO. OF    |   |   | RENTABLE |   |      | PERCENTAGE |   |   | ANNUALIZED    |   |
|------------------------------------------|--------|-----------|--------|--------|----------|--------|-----------|------------|--------|--------|---------------|--------|
|                                     |   | BUILDINGS |   |   | SQ. FT.  |   |      | OWNERSHIP  |   |   | RENT(1)(2)(3) |   |
| Consolidated Properties                  |   |      |   |   |     |   |      |       |   |   |          |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |
| Waterfront Plaza                         |   |      |   |   |     |   |      |       |   |   |          |   |
| 500 Ala Moana Blvd.                      |   |      | 1      |   |     |   | 534,475   |       |   |   | 100.0         | %      |   | $ | 18,811,792 |   |
| Honolulu, HI 96813                       |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| Davies Pacific Center                    |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 841 Bishop Street                        |   |      | 1      |   |     |   | 353,224   |       |   |   | 100.0         | %      |   |   | 10,266,540 |   |
| Honolulu, HI 96813                       |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| Pan Am Building                          |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 1600 Kapiolani Blvd.                     |   |      | 1      |   |     |   | 209,889   |       |   |   | 100.0         | %      |   |   | 6,961,314 |   |
| Honolulu, HI 96814                       |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| First Insurance Center                   |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 1100 Ward Avenue                         |   |      | 1      |   |     |   | 202,992   |       |   |   | 100.0         | %      |   |   | 7,300,416 |   |
| Honolulu, HI 96814                       |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| PBN Building                             |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 1833 Kalakaua Avenue                     |   |      | 1      |   |     |   | 90,559    |       |   |   | 100.0         | %      |   |   | 2,079,588 |   |
| Honolulu, HI 96815                       |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| Clifford Center                          |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 810 Richards Street                      |   |      | 1      |   |     |   | 72,415    |       |   |   | 100.0         | %      |   |   | 1,956,900 |   |
| Honolulu, HI 96813                       |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| Sorrento Technology Center               |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 10140 Barnes Canyon Rd.                  |   |      | 2      |   |     |   | 63,363    |       |   |   | 100.0         | %      |   |   | 1,526,268 |   |
| 10180 Barnes Canyon Rd.                  |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| San Diego, CA 92121                      |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| City Square                              |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 3800 N. Central Ave.                     |   |      | 3      |   |     |   | 738,422   |       |   |   | 100.0         | %      |   |   | 10,774,877 |   |
| 3838 N. Central Ave.                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| 4000 N. Central Ave.                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| Phoenix, AZ 85012                        |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |
| Total Consolidated  Properties |   |      | 11     |   |     |   | 2,265,339 |       |   |   |          |   |   | $ | 59,677,695 |   |
|                                     |   |      |   |   |     |   |      |       |   |   |          |   |   |   |   |   |

----

| PROPERTY                     |   | NO. OF    |   |   | RENTABLE |   |    | PERCENTAGE |   |   | ANNUALIZED |   |
|------------------------------|--------|-----------|--------|--------|----------|--------|---------|------------|--------|--------|------------|--------|
|                         |   | BUILDINGS |   |   | SQ. FT.  |   |    | OWNERSHIP  |   |   | RENT(1)(2) |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |
| Joint Venture Properties     |   |      |   |   |     |   |    |       |   |   |       |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |
| Torrey Hills Corp. Center    |   |      |   |   |     |   |    |       |   |   |       |   |
| 11250 El Camino Real         |   |      | 1      |   |     |   | 24,066  |       |   |   | 32.2       | %      |   | $ | 898,980 |   |
| San Diego, CA 92130          |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Palomar Heights Plaza        |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 5860 Owens Avenue            |   |      | 3      |   |     |   | 45,538  |       |   |   | 32.2       | %      |   |   | 818,280 |   |
| 5868 Owens Avenue            |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 5876 Owens Avenue            |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Carlsbad, CA 92008           |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Palomar Heights Corp. Center |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 5857 Owens Avenue            |   |      | 1      |   |     |   | 64,812  |       |   |   | 32.2       | %      |   |   | 1,467,576 |   |
| Carlsbad, CA 92008           |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Scripps Ranch Bus. Park      |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 9775 Business Park Ave.      |   |      | 2      |   |     |   | 47,248  |       |   |   | 32.2       | %      |   |   | 567,792 |   |
| 10021 Willow Creek Rd.       |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92131          |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Via Frontera Bus. Park       |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 10965 Via Frontera Dr.       |   |      | 2      |   |     |   | 78,819  |       |   |   | 10.0       | %      |   |   | 735,847 |   |
| 10993 Via Frontera Dr.       |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92127          |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Poway Flex                   |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 13550 Stowe Drive            |   |      | 1      |   |     |   | 112,000 |       |   |   | 10.0       | %      |   |   | 1,487,437 |   |
| Poway, CA 92064              |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
|                         |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| Carlsbad Corp. Center.       |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |
| 1950 Camino Vida Roble       |   |      | 1      |   |     |   | 121,541 |       |   |   | 10.0       | %      |   |   | 2,385,837 |   |
| Carlsbad, CA 92008           |   |      |   |   |     |   |    |       |   |   |       |   |   |   |   |   |

----

| PROPERTY                       |   | NO. OF    |   |   | RENTABLE |   |      | PERCENTAGE |   |   | ANNUALIZED |   |
|--------------------------------|--------|-----------|--------|--------|----------|--------|-----------|------------|--------|--------|------------|--------|
|                           |   | BUILDINGS |   |   | SQ. FT.  |   |      | OWNERSHIP  |   |   | RENT(1)(2) |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |
| Savi Tech Center               |   |      |   |   |     |   |      |       |   |   |       |   |
| 22705 Savi Ranch Pkwy.         |   |      | 4      |   |     |   | 372,327   |       |   |   | 10.0       | %      |   | $ | 7,145,399 |   |
| 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      |   |     |   | 166,042   |       |   |   | 10.0       | %      |   |   | 1,514,183 |   |
| 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      |   |     |   | 61,025    |       |   |   | 10.0       | %      |   |   | 766,715 |   |
| Costa Mesa, CA 92626           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Gateway Corp. Center           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 1370 Valley Vista Dr.          |   |      | 1      |   |     |   | 85,216    |       |   |   | 10.0       | %      |   |   | 1,965,645 |   |
| Diamond Bar, CA 91765          |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Black Canyon Corp. Ctr.        |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 16404 N. Black Canyon Hwy.     |   |      | 1      |   |     |   | 218,694   |       |   |   | 17.5       | %      |   |   | 2,596,332 |   |
| Phoenix, AZ 85053              |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Bank of Hawaii Waikiki Center  |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 2155 Kalakaua Avenue           |   |      | 1      |   |     |   | 152,288   |       |   |   | 17.5       | %      |   |   | 5,999,324 |   |
| Honolulu, HI 96815             |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Seville Plaza                  |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 5469 Kearny Villa Rd.          |   |      | 3      |   |     |   | 138,576   |       |   |   | 7.5        | %      |   |   | 2,454,605 |   |
| 5471 Kearny Villa Rd.          |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 5473 Kearny Villa Rd.          |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92123            |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| U.S. Bank Center               |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 101 North First Ave.           |   |      | 2      |   |     |   | 372,676   |       |   |   | 7.5        | %      |   |   | 6,636,732 |   |
| 21 West Van Buren St.          |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Phoenix, AZ 85003              |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Seaview Corporate Center       |   |      | 5      |   |     |   | 356,504   |       |   |   | 5.0        | %      |   |   | 10,693,608 |   |
| 10180 Telesis Court            |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 10190 Telesis Court            |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 10182 Telesis Court            |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| 10188 Telesis Court            |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| San Diego, CA 92121            |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |
| Total Joint Venture Properties |   |      | 34     |   |     |   | 2,417,372 |       |   |   |       |   |   | $ | 48,134,292 |   |
|                           |   |      |   |   |     |   |      |       |   |   |       |   |   |   |   |   |

----

| (1) | Annualized rent represents the monthly contractual rent under commenced leases as of September 30, 2010. This amount reflects total rent before abatements and includes contractual expense reimbursements, which may be estimated as of such date. Total abatements committed to as of September 30, 2010 for the 12 months ending September 30, 2011 were approximately $1.0 million for our wholly-owned properties and $0.7 million for our joint venture properties. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | 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 ventures are accounted for under the equity method of accounting. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (3) | Existing net rents are converted to gross rents by adding contractual expense reimbursements, which may be estimated as of such date, to base rents. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

|                                                 |   | 2010   |   |   | 2009   |   |   | $ Change |   |   | % Change |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|----------|--------|
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |
| Revenue:                                             |   |   |   |   |   |   |   |     |   |   |     |   |
| Rental                                               |   | $      | 10,876 |   |   | $      | 10,486 |     |   | $      | 390      |   |   |   | 3.7 | % |
| Tenant reimbursements                                |   |   | 5,324  |   |   |   | 5,163  |     |   |   | 161      |   |   |   | 3.1 | % |
| Parking                                              |   |   | 2,025  |   |   |   | 2,012  |     |   |   | 13       |   |   |   | 0.6 | % |
| Other                                                |   |   | 91     |   |   |   | 83     |     |   |   | 8        |   |   |   | 9.6 | % |
| Total revenue                                        |   |   | 18,316 |   |   |   | 17,744 |     |   |   | 572      |   |   |   | 3.2 | % |
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| Expenses:                                            |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| Rental property operating                            |   |   | 10,168 |   |   |   | 9,781  |     |   |   | 387      |   |   |   | 4.0 | % |
| General and administrative                           |   |   | 687    |   |   |   | 351    |     |   |   | 336      |   |   |   | 95.7 | % |
| Depreciation and amortization                        |   |   | 5,649  |   |   |   | 6,913  |     |   |   | (1,264   | )      |   |   | (18.3 | %) |
| Interest                                             |   |   | 9,133  |   |   |   | 6,823  |     |   |   | 2,310    |   |   |   | 33.9 | % |
| Loss from extinguishment of debt                     |   |   | -      |   |   |   | 171    |     |   |   | (171     | )      |   |   | (100.0 | %) |
| Acquisition costs                                    |   |   | 630    |   |   |   | -      |     |   |   | 630      |   |   |   | 100.0 | % |
| Total expenses                                       |   |   | 26,267 |   |   |   | 24,039 |     |   |   | 2,228    |   |   |   | 9.3 | % |
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| Loss before equity in net earnings of unconsolidated |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| joint ventures and non-operating income              |   |   | (7,951 | )      |   |   | (6,295 | )        |   |   | (1,656   | )      |   |   | (26.3 | %) |
| Equity in net earnings of unconsolidated             |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |
| joint ventures                                       |   |   | 140    |   |   |   | 189    |     |   |   | (49      | )      |   |   | (25.9 | %) |
| Non-operating income                                 |   |   | -      |   |   |   | 2      |     |   |   | (2       | )      |   |   | (100.0 | %) |
| Net loss                                             |   | $      | (7,811 | )      |   | $      | (6,104 | )        |   | $      | (1,707   | )      |   |   | (28.0 | %) |
|                                                 |   |   |   |   |   |   |   |     |   |   |     |   |   |   |   |   |

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

----

|   | Expenses |
|--------|----------|

----

|                                                 |   | 2010   |    |   | 2009   |   |    | $ Change |   |   | % Change |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|--------|----------|--------|
| Revenue:                                             |   |   |    |   |   |   |    |     |   |   |     |   |
| Rental                                               |   | $      | 31,621  |   |   | $      | 31,999  |     |   | $      | (378     | )      |   |   | (1.2 | %) |
| Tenant reimbursements                                |   |   | 16,742  |   |   |   | 16,184  |     |   |   | 558      |   |   |   | 3.4 | % |
| Parking                                              |   |   | 6,093   |   |   |   | 6,080   |     |   |   | 13       |   |   |   | 0.2 | % |
| Other                                                |   |   | 267     |   |   |   | 270     |     |   |   | (3       | )      |   |   | (1.1 | %) |
| Total revenue                                        |   |   | 54,723  |   |   |   | 54,533  |     |   |   | 190      |   |   |   | 0.3 | % |
|                                                 |   |   |    |   |   |   |    |     |   |   |     |   |   |   |   |   |
| Expenses:                                            |   |   |    |   |   |   |    |     |   |   |     |   |   |   |   |   |
| Rental property operating                            |   |   | 29,885  |   |   |   | 29,356  |     |   |   | 529      |   |   |   | 1.8 | % |
| General and administrative                           |   |   | 2,091   |   |   |   | 1,997   |     |   |   | 94       |   |   |   | 4.7 | % |
| Depreciation and amortization                        |   |   | 17,178  |   |   |   | 20,470  |     |   |   | (3,292   | )      |   |   | (16.1 | %) |
| Interest                                             |   |   | 22,580  |   |   |   | 20,348  |     |   |   | 2,232    |   |   |   | 11.0 | % |
| Loss from extinguishment of debt                     |   |   | -       |   |   |   | 171     |     |   |   | (171     | )      |   |   | (100.0 | %) |
| Acquisition costs                                    |   |   | 630     |   |   |   | -       |     |   |   | 630      |   |   |   | 100.0 | % |
| Total expenses                                       |   |   | 72,364  |   |   |   | 72,342  |     |   |   | 22       |   |   |   | 0.0 | % |
|                                                 |   |   |    |   |   |   |    |     |   |   |     |   |   |   |   |   |
| Loss before equity in net earnings of unconsolidated |   |   |    |   |   |   |    |     |   |   |     |   |   |   |   |   |
| joint ventures and non-operating income              |   |   | (17,641 | )      |   |   | (17,809 | )        |   |   | 168      |   |   |   | 0.9 | % |
| Equity in net earnings of unconsolidated             |   |   |    |   |   |   |    |     |   |   |     |   |   |   |   |   |
| joint ventures                                       |   |   | 184     |   |   |   | 406     |     |   |   | (222     | )      |   |   | (54.7 | %) |
| Non-operating income                                 |   |   | -       |   |   |   | 6       |     |   |   | (6       | )      |   |   | (100.0 | %) |
| Net loss                                             |   | $      | (17,457 | )      |   | $      | (17,397 | )        |   | $      | (60      | )      |   |   | (0.3 | %) |
|                                                 |   |   |    |   |   |   |    |     |   |   |     |   |   |   |   |   |

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

|   | Expenses |
|--------|----------|

----

----

----

----

| 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)                                                             |   |   | 27,255  |   |          | LIBOR + 7.35 | %             | 9/1/2010 |                         |   |  (3)             |   |   |
| Clifford Center (4)                                                                     |   |   | 3,296   |   |          |         | 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)                                                          |   |   | 11,706  |   |          |         | 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                                                                   |   | $      | 399,358 |   |          |         |          |     |                         |   |                  |   |   |   |
| Revolving line of credit (15)                                                           |   |   | 22,047  |   |          |         | 1.25          | %        | 12/31/2013                   |   |                  | 22,047 |   |   |
|    Outstanding principal balance                                              |   | $      | 421,405 |   |          |         |          |     |                         |   |                  |   |   |   |
| Less: Unamortized discount, net                                                         |   |   | (1,685) |   |          |         |          |     |                         |   |                  |   |   |   |
|               Net |   | $      | 419,720 |   |          |         |          |     |                         |   |                  |   |   |   |

| (1) | The loan secured by the Pacific Business News Building has matured and we have not repaid the principal balance.  As a result, interest is being incurred at the default rate of 11.98%.  We are currently in negotiations with the lender to extend the loan.  For additional information, see “Liquidity and Capital Resources” above. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The loan secured by the City Square property has matured and we have not repaid the principal balance.  We 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 the expiration of the forbearance period, which is the earliest to occur of five business days following the completion of our proposed public offering of Listed Common Stock, certain breaches or defaults by us under the forbearance agreement or loan documents, and January 14, 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 has matured and we have not repaid the principal balance.  As a result, interest is being incurred at the default rate of LIBOR + 7.35%.  We are currently in negotiations with the lender. We 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. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Loan is prepayable, subject to prepayment premium equal to greater of 2% of amount prepaid or yield maintenance. |
|-----------------|------------------------------------------------------------------------------------------------------------------|

| (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. |
|-----------------------------------|---------------------------------------------------------------------------------|

| (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. |
|------|-------------------------------------------------------------------------------------------------------------------------|

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

----

----

----

----

----

|   | • |   | our cash flow may be insufficient to meet our required principal and interest payments; |
|--------|---------|--------|-----------------------------------------------------------------------------------------|

|   | • |   | we may be unable to borrow additional funds as needed or on favorable terms, which could adversely affect our liquidity for acquisitions or operations; |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | we may be unable to refinance our debt at maturity or the refinancing terms may be less favorable than the terms of our original debt; |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | • |   | we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms; and |
|--------|---------|--------|------------------------------------------------------------------------------------------------------|

|   | • |   | we will be exposed to interest and future interest rate volatility with respect to debt that is variable rate. |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------|

----

| 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 filed November 23, 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 filed November 23, 2009 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.3               | Articles of Amendment of the Company (previously filed as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q filed November 23, 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 the Board of Directors Reclassifying and Designating a series of common stock as Senior Common Stock, dated March 4, 2010 (previously filed as Exhibit 3.1 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 of the Company dated April 30, 2010 (previously filed as Exhibit 3.6 to the Company’s Quarterly Report on Form 10-Q filed May 7, 2010 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.7               | Articles of Amendment of the Company dated November 1, 2010. (Filed herewith.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.8               | Amended and Restated Bylaws (previously filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed March 25, 2008 (File No. 001-09900) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.1              | Sale, Purchase and Escrow Agreement (Property Pool A), dated as of August 12, 2010, among GRE Glendale LLC, GRE Empire Towers LP, GRE Cornerstone LLC, GRE Kearny Mesa LP, GRE Rio Vista LP, GRE Walnut Creek LLC and Pacific Office Management, Inc. (previously filed as Exhibit 10.36 to the Company’s Registration Statement on Form S-11 filed October 4, 2010 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2              | First Amendment to Sale, Purchase and Escrow Agreement (Property Pool A), dated as of August 30, 2010, among GRE Glendale LLC, GRE Empire Towers LP, GRE Cornerstone LLC, GRE Kearny Mesa LP, GRE Rio Vista LP, GRE Walnut Creek LLC and Pacific Office Management, Inc. (previously filed as Exhibit 10.37 to the Company’s Registration Statement on Form S-11 filed October 4, 2010 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                      |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3              | Assignment and Assumption Agreement (Property Pool A), dated as of September 3, 2010, between Pacific Office Management, Inc. and Pacific Office Properties, L.P. (previously filed as Exhibit 10.38 to the Company’s Registration Statement on Form S-11 filed October 4, 2010 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.4              | Sale, Purchase and Escrow Agreement (Property Pool B), dated as of August 12, 2010, among GRE Carlton Plaza LP, Tustin-Michelle Partners LLC, GRE Warner Desoto LLC, GRE Warner Califa LLC, GRE Warner Canoga LLC, GRE Empire Towers Four LLC, GRE Foothill LLC, GRE Mira Mesa LLC and Pacific Office Management, Inc. (previously filed as Exhibit 10.39 to the Company’s Registration Statement on Form S-11 filed October 4, 2010 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                        |
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.5              | First Amendment to Sale, Purchase and Escrow Agreement (Property Pool B), dated as of August 30, 2010, among GRE Carlton Plaza LP, Tustin-Michelle Partners LLC, GRE Warner Desoto LLC, GRE Warner Califa LLC, GRE Warner Canoga LLC, GRE Empire Towers Four LLC, GRE Foothill LLC, GRE Mira Mesa LLC and Pacific Office Management, Inc. (previously filed as Exhibit 10.40 to the Company’s Registration Statement on Form S-11 filed October 4, 2010 (File No. 333-169729) and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                     |

----

| 10.6   | Assignment and Assumption Agreement (Property Pool B), dated as of September 3, 2010, between Pacific Office Management, Inc. and Pacific Office Properties, L.P. (previously filed as Exhibit 10.41 to the Company’s Registration Statement on Form S-11 filed October 4, 2010 (File No. 333-169729) and incorporated herein by reference). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                    |
| 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. (Filed 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. (Filed herewith.)                                                                                                                                                                                     |

----

|                         | PACIFIC OFFICE PROPERTIES TRUST, INC. |                                 |
|------------------------------|---------------------------------------|--------------------------------------|
|                         |                                  |                                 |   |
| Date:  November 8, 2010 | By:                                   | /s/ James R. Ingebritsen        |   |
|                         |                                  | Name:  James R. Ingebritsen     |   |
|                         |                                  | Title:  Chief Executive Officer |   |
|                         |                                  |                                 |   |

|                         |   |                                 |
|------------------------------|--------|--------------------------------------|
|                         |   |                                 |   |
| Date:  November 8, 2010 | By:    | /s/ James R. Wolford            |   |
|                         |   | Name:  James R. Wolford         |   |
|                         |   | Title:  Chief Financial Officer |   |
|                         |   |                                 |   |

----