Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

99.1.

 

 

 

 

 

7.3% growth in same property net operating income (NOI) on a cash basis, up from 2.5% in fourth quarter 2006. Excluding lease termination fees, same property cash basis NOI increased 6.1%

Occupancy rose to 94.0% from 90.7% in first quarter 2006

4% increase in rental rates

Retained tenants in 67% of square footage up for renewal

 

Property Acquisitions

Square Feet

Stabilized Weighted Average Capitalization Rate

Developments Placed in Service

Square Feet

Stabilized Weighted Average Capitalization Rate

Land Acquisitions

 

 

 

Property Sales

Square Feet

Weighted Average Capitalization Rate

Land Sales

 

 

 

 

Investments

2005 Development/Redevelopment — Acquisitions

2005 Development/Redevelopment — Placed in Service

2006 Strategic Land and Development

 

 

 

Dispositions

2005 Development/Redevelopment

2005 Core

1998 Core

2003 Net Lease

 

 

 

 

 

 

Fixed-charge coverage was 2.8 times and interest coverage was 3.5 times for the quarter

95.5% of real estate assets are unencumbered by mortgages

8.0 years weighted average maturity of permanent debt

100% of permanent debt is fixed rate

Net Income Available to Common Stockholders

Add: Real Estate Depreciation/Amortization

Less: Accumulated Depreciation/Amortization on Real Estate Sold

 

FFO

 

Contact:

 

 

 

 

 

 

Total Revenues

 

Property Expenses

Build to Suit For Sale Costs

Contractor Expenses

General & Administrative Expense

Depreciation of Corporate F,F&E

Depreciation and Amortization of Real Estate

 

 

Total Expenses

Interest Income

Interest Expense

Amortization of Deferred Financing Costs

Mark-to-Market/Loss on Settlement of Interest Rate Protection Agreements (a)

Loss from Early Retirement of Debt

 

 

 

Equity in Net Income (Loss) of Joint Ventures (b)

Income Tax Benefit

Minority Interest Allocable to Continuing Operations

 

 

 

Income from Discontinued Operations (Including Gain on Sale of Real Estate of $55,370 and $54,022 for the Three Months Ended March 31, 2007 and 2006, respectively (c))

Provision for Income Taxes Allocable to Discontinued Operations (Including a provision allocable to Gain on Sale of Real Estate of $10,133 and $14,840 for the Three Months Ended March 31, 2007 and 2006, respectively (c))

Minority Interest Allocable to Discontinued Operations (c)

 

 

 

Gain on Sale of Real Estate

Provision for Income Taxes Allocable to Gain on Sale of Real Estate

Minority Interest Allocable to Gain on Sale of Real Estate

 

 

 

Preferred Dividends

Redemption of Preferred Stock

 

 

 

 

 

Add: Depreciation and Amortization of Real Estate

Add: Income Allocated to Minority Interest

Add: Depreciation and Amortization of Real Estate Included in Discontinued Operations

Add: Depreciation and Amortization of Real Estate — Joint Ventures (b)

Less: Accumulated Depreciation/Amortization on Real Estate Sold

Less: Accumulated Depreciation/Amortization on Real Estate Sold — Joint Ventures (b)

 

 

 

Add: Loss from Early Retirement of Debt

Add: Restricted Stock Amortization

Add: Amortization of Deferred Financing Costs

Add: Depreciation of Corporate F,F&E

Add: Redemption of Preferred Stock

Less: Non-Incremental Capital Expenditures

Less: Straight-Line Rent

 

 

 

 

Add: Interest Expense

Add: Depreciation and Amortization of Real Estate

Add: Preferred Dividends

Add: Mark-to-Market/Loss on Settlement of Interest Rate Protection Agreements (a)

Add: Provision for Income Taxes

Add: Redemption of Preferred Stock

Add: Income Allocated to Minority Interest

Add: Amortization of Deferred Financing Costs

Add: Depreciation of Corporate F,F&E

Add: Depreciation and Amortization of Real Estate Included in Discontinued Operations

Add: Loss from Early Retirement of Debt

Add: Depreciation and Amortization of Real Estate — Joint Ventures (b)

Less: Accumulated Depreciation/Amortization on Real Estate Sold

Less: Accumulated Depreciation/Amortization on Real Estate Sold — Joint Ventures (b)

 

 

 

Add: General and Administrative Expense

Less: Net Economic Gains (d)

Less: Provision for Income Taxes

Less: Equity in FFO of Joint Ventures

 

 

 

 

Gain on Sale of Real Estate

Gain on Sale of Real Estate included in Discontinued Operations

Less: Provision for Income Taxes

Less: Accumulated Depreciation/Amortization on Real Estate Sold

Add: Assignment Fees

Add: Income Taxes Allocable to FFO from Joint Ventures

 

 

 

 

 

FFO:

- Basic

- Diluted (e)

Loss from Continuing Operations Less Preferred Dividends and Redemption of Preferred Stock Per Weighted Average Common Share Outstanding:

- Basic

- Diluted (e)

Net Income Available to Common Stockholders Per Weighted Average Common Share Outstanding:

- Basic

- Diluted (e)

Dividends/Distributions

 

 

Real Estate Before Accumulated Depreciation

Real Estate and Other Held For Sale, Net

Total Assets

Debt

Total Liabilities

Stockholders’ Equity and Minority Interest

 

Total In-Service Properties

Total Gross Leasable Area (in sq ft)

Occupancy

Represents the gain on settlement/mark to market of interest rate protection agreements that do not qualify for hedge accounting in accordance with Statement of Financial Accounting Standard No. 133, “Accounting for Derivative Instruments and Hedging Activities”.

Represents the Company’s share of net income, depreciation and amortization of real estate and accumulated depreciation and amortization on real estate sold from the Company’s joint ventures in which it owns minority equity interests.

In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 requires that the operations and gain (loss) on sale of qualifying properties sold and properties that are classified as held for sale be presented in discontinued operations. FAS 144 also requires that prior periods be restated.

Investors in and analysts following the real estate industry utilize FFO, NOI, EBITDA and FAD, variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by GAAP, is the most appropriate measure, it considers FFO, NOI, EBITDA and FAD, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets. NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. FAD provides a tool to further evaluate the ability to fund dividends. In addition, FFO, NOI, EBITDA and FAD are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.

The Company calculates FFO to be equal to net income available to common stockholders, plus depreciation and amortization on real estate, minus accumulated depreciation and amortization on real estate sold.

NOI is defined as revenues of the Company, minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses. NOI includes NOI from discontinued operations.

EBITDA is defined as NOI, plus the equity in FFO of the Company’s joint ventures, which are accounted for under the equity method of accounting, plus Net Economic Gains, minus general and administrative expenses. EBITDA includes EBITDA from discontinued operations.

FAD is defined as EBITDA, minus GAAP interest expense, minus preferred stock dividends, minus straight-line rental income, minus provision for income taxes, plus restricted stock amortization, minus non-incremental capital expenditures. Non-incremental capital expenditures are building improvements and leasing costs required to maintain current revenues.

FFO, NOI, EBITDA and FAD do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. FFO, NOI, EBITDA and FAD should not be considered as substitutes for net income available to common stockholders (calculated in accordance with GAAP), as a measure of results of operations, or cash flows (calculated in accordance with GAAP) as a measure of liquidity. FFO, NOI, EBITDA and FAD, as calculated by the Company, may not be comparable to similarly titled, but variously calculated, measures of other REITs or to the definition of FFO published by NAREIT.

The Company also reports Net Economic Gains, which, effectively, measure the value created in the Company’s capital recycling activities. Net Economic Gains are calculated by subtracting from gain on sale of real estate (calculated in accordance with GAAP, including gains on sale of real estate classified as discontinued operations) the recapture of accumulated depreciation and amortization on real estate sold (excluding the recapture of accumulated amortization related to above/below market leases and lease inducements as this amortization is included in revenues and FFO) and the provision for income taxes (excluding taxes associated with joint ventures).

In addition, the Company considers cash-basis same store NOI (“SS NOI”) to be a useful supplemental measure of its operating performance. Beginning with the fourth quarter of 2006, the Company adopted the following definition of its same store pool of properties: Same store properties, for the period beginning January 1, 2007, include all properties owned January 1, 2006 and held as an operating property through the end of the current reporting period and developments that were placed in service or were substantially completed for 12 months prior to January 1, 2006 (the “Same Store Pool”). The Company defines SS NOI as NOI, less NOI of properties not in the Same Store Pool, less the impact of straight-line rent and the amortization of above/below market rent. For the quarters ended March 31, 2007 and 2006, NOI was $69,514 and $61,595, respectively; NOI of properties not in the Same Store Pool was $13,732 and $8,937 respectively; the impact of straight-line rent and the amortization of above/below market rent was $2,158 and $2,678, respectively. The Company excludes straight-line rents and above/below market rent amortization in calculating SS NOI because the Company believes it provides a better measure of actual cash basis rental growth for a year-over-year comparison. In addition, the Company believes that SS NOI helps the investing public compare the operating performance of a company’s real estate as compared to other companies. While SS NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. SS NOI also does not reflect general and administrative expenses, interest expenses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact our results from operations. Further, the Company’s computation of SS NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating SS NOI.

Pursuant to Statement of Financial Accounting Standard No. 128, “Earnings Per Share”, the diluted weighted average number of shares/units outstanding and the diluted weighted average number of shares outstanding are the same as the basic weighted average number of shares/units outstanding and the basic weighted average number of shares outstanding, respectively, for periods in which continuing operations is a loss, as the dilutive effect of stock options and restricted stock would be antidilutive to the loss from continuing operations per share.