Funds from operations per diluted share (“FFO”) was $0.29 for the quarter, which includes the effects of $18.7 million of impairment and other non-cash charges and $1.5 million of gains on repurchases of unsecured bonds. Without the effects of these non-cash items, FFO for the quarter was $0.37, in line with expectations.

Liquidity position further enhanced during the quarter:

$575.0 million raised in sale of 75.2 million shares of common stock in follow-on public offering closed April 21, 2009;

$114.0 million in secured financing closed on July 16, 2009;

$73.3 million in cash generated from property and land sales;

$21.5 million par value of unsecured debt obligations repurchased at a discount.

Capital raised through July 2009 exceeded $970.0 million; anticipate capital raised in 2009 in excess of $1.2 billion upon closing of $280.0 million of secured debt financing in third quarter.

2009 FFO guidance reaffirmed: $1.42 – $1.64 per share as adjusted for the additional shares issued in the April 2009 common stock offering ($1.85 – $2.15 per share pre-offering).

FFO for the second quarter of 2009 was $0.29 (including $0.13 per share dilution resulting from the company’s common offering in April), compared to $0.59 for the second quarter of 2008. Second quarter 2009 FFO includes impairments and other non-cash charges of $18.7 million ($0.09 per share), partially offset by $1.5 million ($0.01 per share) of gains on the repurchase of unsecured debt obligations. Excluding the impact of these non-cash items, FFO would have been $0.37 for the second quarter of 2009.

Net income per diluted share (EPS) for the second quarter 2009 was a loss of $0.16, as compared to earnings of $0.11 for the same quarter in 2008. The loss was primarily attributable to impairment charges incurred and higher depreciation expense recognized in the second quarter of 2009.

Completion on April 21, 2009, of an underwritten public offering of 75,210,000 shares of the company’s common stock at a price per share of $7.65. The offering raised $575.0 million ($551.9 million of net proceeds), which the company used to repay outstanding borrowings under its unsecured line of credit and for general corporate purposes.

Completion of a $114.0 million, 10-year secured debt financing on July 16, 2009. The loan is secured by a portfolio of suburban office and industrial assets.

Execution of a commitment letter in July for a $280.0 million 7-year secured loan. The loan, subject to closing, will be secured by suburban office and industrial assets. The company anticipates the closing of this loan in the third quarter of 2009. The company is also actively discussing additional secured debt financing, which the company believes may generate proceeds in the range of $75 million to $100 million in 2009. To the extent that such financing is finalized, it also would be secured by a geographically diverse portfolio of suburban office and industrial assets.

Repurchase of $21.5 million in outstanding unsecured debt that was scheduled to mature in 2010 and 2011. Year to date, the company has repurchased $191.0 million par value of unsecured debt maturing at various dates from 2009 through 2011 for $150.0 million at an average discount of 21.5 percent.

Overall portfolio occupancy, including projects under development, was 87.4 percent as of June 30, 2009, compared to 87.3 percent at March 31, 2009.

Stabilized, in-service properties (128 million square feet) were 88.5 percent leased at June 30, 2009, compared with 89.7 percent at March 31, 2009. This decrease is attributable to the addition of 11 recently developed properties aggregating 3.3 million square feet which were 42 percent leased at June 30, 2009. The company classifies a property as stabilized upon the earlier of its reaching 90% occupancy or one year after its in-service date. The decrease in stabilized occupancy as a result of these newly developed assets was anticipated by the company.

Tenant retention for the second quarter of 2009 was 81.9 percent, with growth in net effective rents on renewals of 3.1 percent.

Same store net operating income decreased by 1.6 percent for the second quarter of 2009, compared with the three-month period ended June 30, 2008. Same store net operating income increased by approximately 1.6 percent for the 12-month period ended June 30, 2009, compared with the 12-month period ended June 30, 2008.

The company’s wholly owned development pipeline at June 30, 2009, consists mostly of projects that are in the final stages of completion. The total estimated costs of these projects upon stabilization are $297.1 million, with $130.0 million in remaining costs to be funded. The pipeline is comprised of 13 properties (1.7 million square feet), which are 89 percent pre-leased.

The company began only one project during the quarter: an expansion of a bulk distribution facility in Phoenix which is 100% leased and scheduled for contribution to a joint venture upon completion in the second half of 2009.

The company placed into service three healthcare properties (242,000 square feet), of which two were 100% leased and one was 10% leased upon completion.

The company’s joint venture development pipeline at June 30, 2009, consists mostly of projects that are in the final stages of completion. The total estimated costs of these projects upon stabilization are $339.5 million, with $118.0 million in remaining costs to be funded. The pipeline is comprised of 3 properties (1.1 million square feet), which are 26 percent pre-leased. Each joint venture has obtained third-party debt to finance construction of these properties. (All joint venture costs and square footage are reported at 100 percent ownership.)

Two speculative industrial assets were placed in service during the quarter: a 503,000 square foot bulk industrial property in the Dugan Realty joint venture and a 533,000 square foot bulk industrial building in the AllPoints Midwest joint venture. Neither property is leased.

During the quarter, the company completed the disposition of five assets, including three properties contributed to the company’s joint venture with CB Richard Ellis Realty Trust. The company realized gross proceeds of $65.8 million at an aggregate capitalization rate of 9.0%.

The company sold approximately 30 acres of undeveloped land that no longer met its growth objectives. These sales generated gross proceeds of $7.5 million.

Class

NYSE Symbol

Quarterly

Amount/Share

Record Date

Payment Date

Series J

Series K

Series L

Series M

Series N

Series O

Revenues:

Rental and related revenue

General contractor revenue

Service fee revenue

Expenses:

Rental expenses

Real estate taxes

General contractor costs

Service Operations expenses

Depreciation and amortization

Other Operating Activities

Equity in earnings of unconsolidated companies

Gain on sale of Build-for-Sale properties, net of tax

Earnings from sales of land, net

Undeveloped land carrying costs

Impairment charges

Other operating expenses

General and administrative expense

Operating income

Other Income (Expense)

Interest and other income (expense), net

Interest expense

Gain on extinguishment of debt

Net loss on business combinations

Income (loss) from continuing operations

Discontinued Operations:

Income from discontinued operations before impairment and gain on sales

Impairment charges

Gain on sale of depreciable properties

Income (loss) from discontinued operations

Net income (loss)

Dividends on preferred shares

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to common shareholders

Basic net income (loss) per Common Share:

Continuing operations attributable to common shareholders

Discontinued operations attributable to common shareholders

Total

Diluted net income (loss) per Common Share:

Continuing operations attributable to common shareholders

Discontinued operations attributable to common shareholders

Total

Net Income (Loss) Attributable to Common Shares

Less income allocated to participating securities

Net Income (Loss) Per Common Share - Basic

Add back:

Noncontrolling interest in earnings of unitholders

Other common stock equivalents

Net Income (Loss) Per Common Share - Diluted

Reconciliation to Funds From Operations (“FFO”)

Net Income (Loss) Attributable to Common Shares

Adjustments:

Depreciation and Amortization

Company Share of Joint Venture Depreciation and amortization

Earnings from depreciable property sales-wholly owned

Earnings from depreciable property sales-JV

Noncontrolling interest share of adjustments

Funds From Operations - Basic

Noncontrolling interest in earnings of unitholders

Noncontrolling interest share of adjustments

Other common stock equivalents

Funds From Operations - Diluted

Less gains on extinguishment of debt

Add back impairment and other non-recurring charges

Adjusted Funds From Operations - Diluted

Net Income (Loss) Attributable to Common Shares

Less income allocated to participating securities

Net Income (Loss) Per Common Share - Basic

Add back:

Noncontrolling interest in earnings of unitholders

Other common stock equivalents

Net Income (Loss) Per Common Share - Diluted

Reconciliation to Funds From Operations (“FFO”)

Net Income (Loss) Attributable to Common Shares

Adjustments:

Depreciation and Amortization

Company Share of Joint Venture Depreciation and amortization

Earnings from depreciable property sales-wholly owned

Earnings from depreciable property sales-JV

Noncontrolling interest share of adjustments

Funds From Operations - Basic

Noncontrolling interest in earnings of unitholders

Noncontrolling interest share of adjustments

Other common stock equivalents

Funds From Operations - Diluted

Less gains on extinguishment of debt

Add back impairment and other non-recurring charges

Adjusted Funds From Operations - Diluted

ASSETS:

Rental Property

Less: Accumulated Depreciation

Construction in Progress

Land Held for Development

Net Real Estate Investments

Cash

Accounts Receivable

Straight-line Rents Receivable

Receivables on Construction Contracts

Investments in and Advances to Unconsolidated Companies

Deferred Financing Costs, Net

Deferred Leasing and Other Costs, Net

Escrow Deposits and Other Assets

Total Assets

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Secured Debt

Unsecured Notes

Unsecured Line of Credit

Construction Payables and Amounts due Subcontractors

Accrued Real Estate Taxes

Accrued Interest

Accrued Expenses

Other Liabilities

Tenant Security Deposits and Prepaid Rents

Total Liabilities

Preferred Stock

Common Stock and Additional Paid-in Capital

Accumulated Other Comprehensive Income

Distributions in Excess of Net Income

Total Shareholders’ Equity

Non-controlling Interest

Total Liabilities and Equity