10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2007
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to          .

Commission File Number 333-21873

FIRST INDUSTRIAL, L.P.

(Exact name of Registrant as specified in its Charter)

Delaware	36-3924586
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
311 S. Wacker Drive, Suite 4000, Chicago, Illinois (Address of principal executive offices)	60606 (Zip Code)

(312) 344-4300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

FIRST INDUSTRIAL, L.P.

TABLE OF CONTENTS

			Page
PART I.
	Item 1.	Business		3
	Item 1A.	Risk Factors		8
	Item 1B.	Unresolved SEC Comments		14
	Item 2.	Properties		15
	Item 3.	Legal Proceedings		24
	Item 4.	Submission of Matters to a Vote of Security Holders		24
PART II.
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		24
	Item 6.	Selected Financial Data		25
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		42
	Item 8.	Financial Statements and Supplementary Data		42
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		43
	Item 9A.	Controls and Procedures		43
	Item 9B.	Other Information		43
PART III.
	Item 10.	Directors, Executive Officers and Corporate Governance		44
	Item 11.	Executive Compensation		44
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		44
	Item 13.	Certain Relationships and Related Transactions and Director Independence		44
	Item 14.	Principal Accountant Fees and Services		44
PART IV.
	Item 15.	Exhibits and Financial Statement Schedules		44
Signatures				S-21
Consent of PricewaterhouseCoopers LLP
Certification
Certification
Section 906 Certification

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects include, but are not limited to, changes in: international, national, regional and local economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rates, competition, supply and demand for industrial properties in our current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts and risks related to doing business internationally (including foreign currency exchange risks). These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect our financial results, is included in Item 1A, “Risk Factors” and in the Operating Partnership’s other filings with the Securities and Exchange Commission. Unless the context otherwise requires, the terms the “Operating Partnership,” “we,” “us,” and “our” refer to First Industrial, L.P. and their controlled subsidiaries. We refer to our taxable REIT subsidiary, First Industrial Investment, Inc., as the “TRS.”

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PART I

THE COMPANY

Item 1.   Business

General

First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 87.1% ownership interest at December 31, 2007. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $275.0 million. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986 (the “Code”). The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership owned, in the aggregate, approximately a 12.9% interest in the Operating Partnership at December 31, 2007.

The Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of the TRS, (together with the Operating Partnership and the L.L.C.s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership as presented herein. We also hold at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, (the “Mortgage Partnership”), L.P. First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD., and FI Development Services L.P. and wholly owned L.L.C.s (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnerships’ operating data is presented herein on a combined basis, separate from that of the Consolidated Operating Partnership. The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.

The Operating Partnership or the TRS, through separate wholly-owned limited liability companies in which it is the sole member, also owns minority equity interests in, and provides various services to, five joint ventures which invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program” and the “2006 Land/Development Joint Venture”). The Operating Partnership, through separate wholly-owned limited liability companies of which the Operating Partnership or a wholly-owned entity of the Operating Partnership, is also the sole member, also owned economic interests in, and provided various services to, a sixth joint venture (the “1998 Core Joint Venture”). On January 31, 2007, the Consolidated Operating Partnership purchased the 90% equity interest from the institutional investor in the 1998 Core Joint Venture. Effective January 31, 2007, the assets and liabilities and results of operations of the 1998 Core Joint Venture are consolidated with the Consolidated Operating Partnership since the Consolidated Operating Partnership effectively owns 100% of the equity interest. Prior to January 31, 2007, the 1998 Core Joint Venture was accounted for under the equity method of accounting. Additionally, in December 2007, the TRS, through separate wholly-owned limited liability companies in which it is the sole member, entered into two new joint ventures with institutional investors to invest in, own, develop, redevelop and operate industrial properties (the “2007 Canada Joint Venture” and the “2007 Europe Joint Venture”; together with 2003 Net Lease Joint Venture, 2005 Development/Repositioning Joint Venture, 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program, the 2006 Land/Development Joint Venture and the 1998 Core Joint Venture, the “Joint Ventures”). We own a 10% equity interest in and will provide property management, asset management, development management and leasing management to the 2007 Canada Joint Venture and the 2007 Europe Joint Venture. As of December 31, 2007, the 2007 Canada Joint Venture and the 2007 Europe Joint Venture did not own any properties. The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. The operating data of the Joint Ventures is not consolidated with that of the

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Operating Partnership as presented herein. However, the operating data of the 2005 Development/Repositioning Joint Venture, referred to as FirstCal Industrial, LLC, is separately presented on a consolidated basis, separate from that of the Operating Partnership.

As of December 31, 2007, we owned 711 in-service industrial properties, containing an aggregate of approximately 55.4 million square feet of gross leasable area (“GLA”). On a combined basis, as of December 31, 2007, the Other Real Estate Partnerships owned 93 in-service industrial properties, containing an aggregate of approximately 8.6 million square feet of GLA. Of the 93 industrial properties owned by the Other Real Estate Partnerships at December 31, 2007, 34 are held by the Pennsylvania Partnership, 22 are held by the Financing Partnership, 12 are held by the Securities Partnership, 10 are held by the Mortgage Partnership, nine are held by the Harrisburg Partnership, four are held by the Indianapolis Partnership, one is held by TK-SV, LTD. and one is held by FI Development Services, L.P. The Consolidated Operating Partnership’s and Other Real Estate Partnerships’ in-service properties include all properties other than developed, redeveloped and acquired properties that have not yet reached stabilized occupancy (generally defined as properties that are 90% leased).

We utilize an operating approach which combines the effectiveness of decentralized, locally based property management, acquisition, sales and development functions with the cost efficiencies of centralized acquisition, sales and development support, capital markets expertise, asset management and financial control systems. At February 15, 2008, the we had approximately 518 employees.

We have grown and will seek to continue to grow through the development and acquisition of additional industrial properties, through additional joint venture investments and through our corporate services program.

We maintain a website at www.firstindustrial.com. Information on this website shall not constitute part of this Form 10-K. Copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available without charge on our website as soon as reasonably practicable after such reports are filed with or furnished to the Securities and Exchange Commission (the “SEC”). In addition, our Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by us, are all available without charge on our website or upon request to us. Amendments to, or waivers from, our Code of Business Conduct and Ethics that apply to our executive officers or directors shall also be posted to our website. Please direct requests as follows:

First Industrial Realty Trust, Inc.

311 S. Wacker, Suite 4000

Chicago, IL 60606

Attention: Investor Relations

Business Objectives and Growth Plans

Our fundamental business objective is to maximize the total return to our partners through increases in per unit distributions and increases in the value of our properties and operations. Our growth plans include the following elements:

•  Internal Growth.  We seek to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancies exist and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; (iv) renovating existing properties; and (v) increasing ancillary revenues from non-real estate sources.

•  External Growth.  We seek to grow externally through (i) the development of industrial properties; (ii) the acquisition of portfolios of industrial properties, industrial property businesses or individual

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properties which meet our investment parameters and target markets; (iii) additional joint venture investments; and (iv) the expansion of our properties.

•  Corporate Services.  Through our corporate services program, the Consolidated Operating Partnership builds for, purchases from, and leases and sells industrial properties to companies that need industrial facilities. We seek to grow this business by targeting both large and middle-market public and private companies.

Business Strategies

We utilize the following six strategies in connection with the operation of our business:

•  Organization Strategy.  We implement our decentralized property operations strategy through the deployment of experienced regional management teams and local property managers. Each operating region is headed by a managing director who is a senior executive officer of, and has an equity interest in, the Company. We provide acquisition, development and financing assistance, asset management oversight and financial reporting functions from our headquarters in Chicago, Illinois to support our regional operations. We believe the size of our portfolio enables us to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.

•  Market Strategy.  Our market strategy is to concentrate on the top industrial real estate markets in the United States and select industrial real estate markets in Canada, the Netherlands and Belgium. These markets have one or more of the following characteristics: (i) strong industrial real estate fundamentals, including increased industrial demand expectations; (ii) a history of and outlook for continued economic growth and industry diversity; and (iii) sufficient size to provide for ample transaction volume.

•  Leasing and Marketing Strategy.  We have an operational management strategy designed to enhance tenant satisfaction and portfolio performance. We pursue an active leasing strategy, which includes broadly marketing available space, seeking to renew existing leases at higher rents per square foot and seeking leases which provide for the pass-through of property-related expenses to the tenant. We also have local and national marketing programs which focus on the business and real estate brokerage communities and national tenants.

•  Acquisition/Development Strategy.  Our acquisition/development strategy is to invest in properties and other assets with higher yield potential in the top industrial real estate markets in the United States and select industrial real estate markets in Canada, the Netherlands and Belgium. Of the 804 industrial properties in the Consolidated Operating Partnership’s and Other Real Estate Partnerships’ combined in-service portfolios at December 31, 2007, 112 properties have been developed by the Consolidated Operating Partnership, the Other Real Estate Partnerships, or its former management. We will continue to leverage the development capabilities of our management, many of whom are leading industrial property developers in their respective markets.

•  Disposition Strategy.  We continuously evaluate local market conditions and property-related factors in all of our markets for purposes of identifying assets suitable for disposition.

•  Financing Strategy.  We plan on utilizing a portion of net sales proceeds from property sales, borrowings under our unsecured line of credit and proceeds from the issuance, when and as warranted, of additional debt and equity securities to finance future acquisitions and developments. We also continually evaluate joint venture arrangements as another source of capital. As of February 15, 2008, we had approximately $47.9 million available for additional borrowings under our unsecured line of credit (the “Unsecured Line of Credit”).

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Recent Developments

In 2007, we acquired or placed in-service developments totaling 116 industrial properties and acquired several parcels of land for a total investment of approximately $557.2 million. We also sold 159 industrial properties and several parcels of land for a gross sales price of approximately $840.4 million. At December 31, 2007, we owned 711 in-service industrial properties containing approximately 55.4 million square feet of GLA.

In December 2007, we entered into two new joint ventures, the 2007 Canada Joint Venture and the 2007 Europe Joint Venture.

During the year ended December 31, 2007, the Company repurchased 1,797,714 shares at an average price per share of $38.62, including brokerage commissions. We purchased general partner units from the Company in the same amount.

During 2007, in conjunction with the acquisition of several industrial properties, we assumed mortgage loans payable in the aggregate of $38.6 million; these mortgage loans payable were paid off and retired during 2007.

On May 7, 2007, we issued $150.0 million of senior unsecured debt which matures on May 15, 2017 and bears interest at a rate of 5.95% (the “2017 II Notes”). The issue price of the 2017 II Notes was 99.730%. In April 2006, we entered into interest rate protection agreements to fix the interest rate on the 2017 II Notes prior to issuance. The effective portion of the interest rate protection agreements were settled on May 1, 2007 for a payment of $4.3 million, which is included in other comprehensive income and will be amortized over the life of the notes.

On May 15, 2007, we paid off and retired our 7.60% 2007 Unsecured Notes in the amount of $150.0 million.

On September 28, 2007, we amended and restated our Unsecured Line of Credit. The Unsecured Line of Credit matures on September 28, 2012, has a borrowing capacity of $500.0 million (with the right, subject to certain conditions, to increase the borrowing capacity up to $700.0 million) and bears interest at a floating rate of LIBOR plus 0.475%, or the prime rate, at our election. Up to $100.0 million of the $500.0 million capacity may be borrowed in foreign currencies, including the Canadian dollar, Euro, British Sterling and Japanese Yen.

On January 31, 2007, we purchased 90% equity interest from the institutional investor in the 1998 Core Joint Venture from the partner. We paid $18.5 million in cash and assumed $30.3 million in mortgage loans payable. As of December 31, 2007, all of these mortgages loans payable were paid off and retired.

On February 27, 2007, we redeemed the 85% equity interest in one legal entity which owned one property from the institutional investor in the 2003 Net Lease Joint Venture. In connection with the redemption, we assumed a $8.3 million payable and $3.0 million in other liabilities. The mortgage loan payable was subsequently paid off in February 2007.

Future Property Acquisitions, Developments and Property Sales

We have an active acquisition and development program through which we are continually engaged in identifying, negotiating and consummating portfolio and individual industrial property acquisitions and developments. As a result, we are currently engaged in negotiations relating to the possible acquisition and development of certain industrial properties.

We also sell properties based on market conditions and property related factors. As a result, we are engaged in negotiations relating to the possible sales of certain industrial properties in our portfolio.

When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, we will consider such factors as: (i) the geographic area and type of property; (ii) the

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location, construction quality, condition and design of the property; (iii) the potential for capital appreciation of the property; (iv) our ability to improve the property’s performance through renovation; (v) the terms of tenant leases, including the potential for rent increases; (vi) the potential for economic growth and the tax and regulatory environment of the area in which the property is located; (vii) the potential for expansion of the physical layout of the property and/or the number of sites; (viii) the occupancy and demand by tenants for properties of a similar type in the vicinity; and (ix) competition from existing properties and the potential for the construction of new properties in the area.

INDUSTRY

Industrial properties are typically used for the design, assembly, packaging, storage and distribution of goods and/or the provision of services. As a result, the demand for industrial space in the United States is related to the level of economic output. Historically, occupancy rates for industrial property in the United States have been higher than those for other types of commercial property. We believe that the higher occupancy rate in the industrial property sector is a result of the construction-on-demand nature of, and the comparatively short development time required for, industrial property. For the five years ended December 31, 2007, the occupancy rates for industrial properties in the United States have ranged from 88.2%^*( to 90.8%^*, with an occupancy rate of 90.6%^* at December 31, 2007.

(^* Source: Torto Wheaton Research

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Item 1A.   Risk Factors

Risk Factors

Our operations involve various risks that could adversely affect our financial condition, results of operations, cash flow, ability to pay distributions on our Units and the market value of our Units. These risks, among others contained in the Operating Partnership’s other filings with the SEC, include:

Real estate investments’ value fluctuates depending on conditions in the general economy and the real estate business. These conditions may limit the Consolidated Operating Partnership’s revenues and available cash.

The factors that affect the value of our real estate and the revenues we derive from our properties include, among other things:

•  general economic conditions;

•  local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties;

•  local conditions such as oversupply or a reduction in demand in an area;

•  the attractiveness of the properties to tenants;

•  tenant defaults;

•  zoning or other regulatory restrictions;

•  competition from other available real estate;

•  our ability to provide adequate maintenance and insurance; and

•  increased operating costs, including insurance premiums and real estate taxes.

Many real estate costs are fixed, even if income from properties decreases.

Our financial results depend on leasing space to tenants on terms favorable to us. Our income and funds available for distribution to our unitholders will decrease if a significant number of our tenants cannot pay their rent or we are unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, we might not be able to enforce our rights as landlord without delays and we might incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment.

The Consolidated Operating Partnership may be unable to sell properties when appropriate because real estate investments are not as liquid as certain other types of assets.

Real estate investments generally cannot be sold quickly and, therefore, will tend to limit our ability to adjust our property portfolio promptly in response to changes in economic or other conditions. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service debt and make distributions to our unitholders. In addition, like other companies qualifying as REITs under the Internal Revenue Code (the “Code”), the Company must comply with the safe harbor rules relating to the number of properties disposed of in a year, their tax basis and the cost of improvements made to the properties, or meet other tests which enable a REIT to avoid punitive taxation on the sale of assets. Thus, our ability at any time to sell assets may be restricted.

The Consolidated Operating Partnership may be unable to sell or contribute properties on advantageous terms.

We have sold to third parties a significant number of properties in recent years and, as part of our business, we intend to continue to sell properties to third parties. Our ability to sell properties on advantageous

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terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. If we are unable to sell properties on favorable terms or redeploy the proceeds of property sales in accordance with our business strategy, then our financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, our Units could be adversely affected.

We have also sold to our joint ventures a significant number of properties in recent years and, as part of our business, we intend to continue to sell or contribute properties to our joint ventures as opportunities arise. If we do not have sufficient properties available that meet the investment criteria of current or future joint ventures, or if the joint ventures have reduced or do not have access to capital on favorable terms, then such sales could be delayed or prevented, adversely affecting our financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, our Units.

The Consolidated Operating Partnership may be unable to acquire properties on advantageous terms or acquisitions may not perform as the Consolidated Operating Partnership expects.

We acquire and intend to continue to acquire primarily industrial properties. The acquisition of properties entails various risks, including the risks that our investments may not perform as expected and that our cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, we face significant competition for attractive investment opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private investors. This competition increases as investments in real estate become attractive relative to other forms of investment. As a result of competition, we may be unable to acquire additional properties as we desire or the purchase price may be elevated. In addition, we expect to finance future acquisitions through a combination of borrowings under the Unsecured Line of Credit, proceeds from equity or debt offerings by us and proceeds from property sales, which may not be available and which could adversely affect our cash flow. Any of the above risks could adversely affect our financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, our Units.

The Consolidated Operating Partnership may be unable to complete development and re-development projects on advantageous terms.

As part of our business, we develop new and re-develop existing properties. In addition, we have sold to third parties or sold to our joint ventures a significant number of development and re-development properties in recent years, and we intend to continue to sell or contribute such properties to third parties or to sell such properties to our joint ventures as opportunities arise. The real estate development and re-development business involves significant risks that could adversely affect our financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of our Units, which include:

•  we may not be able to obtain financing for development projects on favorable terms and complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties and generating cash flow;

•  we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;

•  the properties may perform below anticipated levels, producing cash flow below budgeted amounts and limiting our ability to sell such properties to third parties or to sell or contribute such properties to our joint ventures.

The Consolidated Operating Partnership may be unable to renew leases or find other lessees.

We are subject to the risks that, upon expiration, leases may not be renewed, the space subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than expiring lease terms. If we were unable to promptly renew a significant number of expiring leases or to promptly relet the space covered by such leases, or if the rental rates upon renewal or reletting were significantly lower than the current rates, our financial condition, results of operation, cash flow and

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ability to pay distributions on, and the market value of our Units could be adversely affected. As of December 31, 2007, leases with respect to approximately 10.6 million, 8.8 million and 8.2 million square feet of GLA, representing 20%, 17% and 16% of GLA, expire in 2008, 2009 and 2010, respectively.

The Consolidated Operating Partnership might fail to qualify or remain qualified as a REIT.

The Company intends to operate so as to qualify as a REIT under the Code. Although the Company believes that it is organized and will operate in a manner so as to qualify as a REIT, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions of which there are only limited judicial or administrative interpretations and involve the determination of various factual matters and circumstances not entirely within our control.

If the Company were to fail to qualify as a REIT in any taxable year, it would be subject to federal income tax, including any applicable alternative minimum tax, on its taxable income at corporate rates. This could result in a discontinuation or substantial reduction in dividends to stockholders and in cash to pay interest and principal on debt securities that we issue. Unless entitled to relief under certain statutory provisions, the Company would be disqualified from electing treatment as a REIT for the four taxable years following the year during which it failed to qualify as a REIT.

Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.

As part of our business, we sell properties to third parties or sell properties to our joint ventures as opportunities arise. Under the Code, a 100% penalty tax could be assessed on the gain resulting from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction. The IRS could contend that certain sales of properties by us are prohibited transactions. While we do not believe that the IRS would prevail in such a dispute, if the matter were successfully argued by the IRS, the 100% penalty tax could be assessed against the profits from these transactions. In addition, any income from a prohibited transaction may adversely affect the Company’s ability to satisfy the income tests for qualification as a REIT.

The REIT distribution requirements may require the Company to turn to external financing sources.

The Company could, in certain instances, have taxable income without sufficient cash to enable us to meet the distribution requirements of the REIT provisions of the Code. In that situation, the Company could be required to borrow funds or sell properties on adverse terms in order to meet those distribution requirements. In addition, because the Company must distribute to its stockholders at least 90% of the Company’s REIT taxable income each year, the Company’s ability to accumulate capital may be limited. Thus, in connection with future acquisitions, the Company may be more dependent on outside sources of financing, such as debt financing or issuances of additional capital stock, which may or may not be available on favorable terms. Additional debt financings may substantially increase our leverage and additional equity offerings may result in substantial dilution of unitholders’ interests.

Debt financing, the degree of leverage and rising interest rates could reduce the Consolidated Operating Partnership’s cash flow.

Where possible, we intend to continue to use leverage to increase the rate of return on our investments and to allow us to make more investments than we otherwise could. Our use of leverage presents an additional element of risk in the event that the cash flow from our properties is insufficient to meet both debt payment obligations and our distribution requirements of the REIT provisions of the Code. In addition, rising interest rates would reduce our cash flow by increasing the amount of interest due on our floating rate debt and on our fixed rate debt as it matures and is refinanced.

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Cross-collateralization of mortgage loans could result in foreclosure on substantially all of the Consolidated Operating Partnership’s properties if the Consolidated Operating Partnership is unable to service its indebtedness.

If we decide to obtain additional debt financing in the future, we may do so through mortgages on some or all of our properties. These mortgages may be issued on a recourse, non-recourse or cross-collateralized basis. Cross-collateralization makes all of the subject properties available to the lender in order to satisfy our debt. Holders of indebtedness that is so secured will have a claim against these properties. To the extent indebtedness is cross collateralized, lenders may seek to foreclose upon properties that are not the primary collateral for their loan, which may, in turn, result in acceleration of other indebtedness secured by properties. Foreclosure of properties would result in a loss of income and asset value to us, making it difficult for us to meet both debt payment obligations and the Company’s distribution requirements of the REIT provisions of the Code. As of December 31, 2007, none of our current indebtedness was cross-collateralized.

The Consolidated Operating Partnership may have to make lump-sum payments on its existing indebtedness.

We are required to make the following lump-sum or “balloon” payments under the terms of some of our indebtedness, including:

•  $50.0 million aggregate principal amount of 7.75% Notes due 2032 (the “2032 Notes”)

•  $200.0 million aggregate principal amount of 7.60% Notes due 2028 (the “2028 Notes”)

•  approximately $15.0 million aggregate principal amount of 7.15% Notes due 2027 (the “2027 Notes”)

•  $150.0 million aggregate principle amount of 5.95% Notes due 2017 (the “2017 II Notes”)

•  $100.0 million aggregate principal amount of 7.50% Notes due 2017 (the “2017 Notes”)

•  $200.0 million aggregate principal amount of 5.75% Notes due 2016 (the “2016 Notes”)

•  $125.0 million aggregate principal amount of 6.42% Notes due 2014 (the “2014 Notes”)

•  $200.0 million aggregate principal amount of 6.875% Notes due 2012 (the “2012 Notes”)

•  $200.0 million aggregate principal amount of 4.625% Notes due 2011 (the “2011 Exchangeable Notes”)

•  $200.0 million aggregate principal amount of 7.375% Notes due 2011(the “2011 Notes”)

•  $125.0 million aggregate principal amount of 5.25% Notes due 2009 (the “2009 Notes”)

•  a $500.0 million Unsecured Line of Credit under which we may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital.

The Unsecured Line of Credit provides for the repayment of principal in a lump-sum or “balloon” payment at maturity in 2012. We have the right, subject to certain conditions, to increase the aggregate commitment under the Unsecured Line of Credit by up to $200.0 million. As of December 31, 2007, $322.1 million was outstanding under the Unsecured Line of Credit at a weighted average interest rate of 5.787%.

Our ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on our ability either to refinance the applicable indebtedness or to sell properties. We have no commitments to refinance the 2009 Notes, the 2011 Notes, the 2011 Exchangeable Notes, the 2012 Notes, the 2014 Notes, the 2016 Notes, the 2017 Notes, the 2017 Notes II, the 2027 Notes, the 2028 Notes, the 2032 Notes or the Unsecured Line of Credit. Some of our existing debt obligations, other than those discussed above, are secured by our properties, and therefore such obligations will permit the lender to foreclose on those properties in the event of a default.

11

There is no limitation on debt in the Consolidated Operating Partnership’s organizational documents.

As of December 31, 2007, the Company’s ratio of debt to its total market capitalization was 49.2%. The organizational documents of the Company, however, do not contain any limitation on the amount or percentage of indebtedness the Company may incur. Accordingly, we could become more highly leveraged, resulting in an increase in debt service that could adversely affect our ability to make expected distributions to Unitholders and in an increased risk of default on our obligations.

The Company computes that percentage by calculating its total consolidated debt as a percentage of the aggregate market value of all outstanding shares of the Company’s common stock, assuming the exchange of all of our limited partnership units for common stock, plus the aggregate stated value of all outstanding shares of preferred stock and total consolidated debt.

Rising interest rates on the Consolidated Operating Partnership’s Unsecured Line of Credit could decrease the Consolidated Operating Partnership’s available cash.

Our Unsecured Line of Credit bears interest at a floating rate. As of December 31, 2007, our Unsecured Line of Credit had an outstanding balance of $322.1 million at a weighted average interest rate of 5.787%. Our Unsecured Line of Credit bears interest at the prime rate or at the LIBOR plus 0.475%, at our election. Based on an outstanding balance on our Unsecured Line of Credit as of December 31, 2007, a 10% increase in interest rates would increase interest expense by $1.9 million on an annual basis. Increases in the interest rate payable on balances outstanding under our Unsecured Line of Credit would decrease our cash available for distribution to unitholders.

Earnings and cash dividends, asset value and market interest rates affect the price of the Company’s common stock.

As a REIT, the market value of the Company’s common stock, in general, is based primarily upon the market’s perception of the Company’s growth potential and its current and potential future earnings and cash dividends. The market value of the Company’s common stock is based secondarily upon the market value of the Company’s underlying real estate assets. For this reason, shares of the Company’s common stock may trade at prices that are higher or lower than the Company’s net asset value per share. To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company’s underlying assets, may not correspondingly increase the market price of the Company’s common stock. The Company’s failure to meet the market’s expectations with regard to future earnings and cash dividends likely would adversely affect the market price of the Company’s common stock. Further, the distribution yield on the common stock (as a percentage of the price of the common stock) relative to market interest rates may also influence the price of the Company’s common stock. An increase in market interest rates might lead prospective purchasers of the Company’s common stock to expect a higher distribution yield, which would adversely affect the market price of the Company’s common stock. Additionally, if the market price of the Company’s common stock declines significantly, then the Company might breach certain covenants with respect to its debt obligations, which could adversely affect the Company’s liquidity and ability to make future acquisitions and the Company’s ability to pay dividends to its stockholders.

The Consolidated Operating Partnership may incur unanticipated costs and liabilities due to environmental problems.

Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs of clean-up of certain conditions relating to the presence of hazardous or toxic materials on, in or emanating from a property, and any related damages to natural resources. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect the ability to rent or sell the property or to borrow using the property as collateral. Persons who dispose of or arrange for the disposal or treatment of hazardous or toxic materials

12

may also be liable for the costs of clean-up of such materials, or for related natural resource damages, at or from an off-site disposal or treatment facility, whether or not the facility is owned or operated by those persons. No assurance can be given that existing environmental assessments with respect to any of our properties reveal all environmental liabilities, that any prior owner or operator of any of the properties did not create any material environmental condition not known to us or that a material environmental condition does not otherwise exist as to any of our properties.

The Consolidated Operating Partnership’s insurance coverage does not include all potential losses.

We currently carry comprehensive insurance coverage including property, boiler & machinery, liability, fire, flood, terrorism, earthquake, extended coverage and rental loss as appropriate for the markets where each of our properties and their business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties and business activities. We believe our properties are adequately insured. However, there are certain losses, including losses from earthquakes, hurricanes, floods, pollution, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed to be economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, we could experience a significant loss of capital invested and potential revenues from these properties, and could potentially remain obligated under any recourse debt associated with the property.

The Consolidated Operating Partnership is subject to risks and liabilities in connection with its investments in properties through joint ventures.

As of December 31, 2007, five of our joint ventures owned approximately 19.9 million square feet of properties. As of December 31, 2007, our investment in joint ventures exceeded $57.5 million in the aggregate, and for the year ended December 31, 2007, our equity in income of joint ventures exceeded $29.9 million. Our organizational documents do not limit the amount of available funds that we may invest in joint ventures and we intend to continue to develop and acquire properties through joint ventures with other persons or entities when warranted by the circumstances. Joint venture investments, in general, involve certain risks, including:

•  co-members or joint venturers may share certain approval rights over major decisions;

•  co-members or joint venturers might fail to fund their share of any required capital commitments;

•  co-members or joint venturers might have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect its ability to operate the property;

•  co-members or joint venturers may have the power to act contrary to our instructions, requests, policies or objectives, including our current policy with respect to maintaining our qualification as a real estate investment trust;

•  the joint venture agreements often restrict the transfer of a member’s or joint venturer’s interest or “buy-sell” or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;

•  disputes between us and our co-members or joint venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and subject the properties owned by the applicable joint venture to additional risk; and

•  we may in certain circumstances be liable for the actions of our co-members or joint venturers.

The occurrence of one or more of the events described above could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock.

In addition, joint venture investments in real estate involve all of the risks related to the ownership, acquisition, development, sale and financing of real estate discussed in the risk factors above. To the extent the

13

Company’s investments in joint ventures are adversely affected by such risks, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock could be adversely affected.

We are subject to risks associated with our international operations.

Under our market strategy, we plan to acquire and develop properties outside of the United States, including in Canada, the Netherlands and Belgium. Our international operations will be subject to risks inherent in doing business abroad, including:

•  exposure to the economic fluctuations in the locations in which we invest;

•  difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;

•  revisions in tax treaties or other laws and regulations, including those governing the taxation of our international revenues;

•  obstacles to the repatriation of earnings and funds;

•  currency exchange rate fluctuations between the United States dollar and foreign currencies;

•  restrictions on the transfer of funds; and

•  national, regional and local political uncertainty.

We also have offices outside of the United States. Our ability to effectively establish, staff and manage these offices is subject to risks associated with employment practices, labor issues, and cultural factors that differ from those with which we are familiar. In addition, we may be subject to regulatory requirements and prohibitions that differ between jurisdictions. As we continue to expand our business globally, we may have difficulty anticipating and effectively managing these and other risks that our international operations may face, which may adversely affect our business outside the United States and our financial condition and results of operations.

Acquired properties may be located in new markets, where we may face risks associated with investing in an unfamiliar market.

When we acquire properties located outside of the United States, we may face risks associated with a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures. We work to mitigate such risks through extensive diligence and research and associations with experienced partners; however, there can be no guarantee that all such risks will be eliminated.

Potential fluctuations in exchange rates between the U.S. dollar and the currencies of the other countries in which we invest may adversely affect our results of operations and financial position.

Owning, operating and developing industrial property outside of the United States exposes the Company to the possibility of volatile movements in foreign exchange rates. Changes in foreign currencies can affect the operating results of international operations reported in US dollars and the value of the foreign assets reported in US dollars. The economic impact of foreign exchange rate movements is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. A significant depreciation in the value of the currency of one or more countries where we have a significant investment may materially affect our results of operations.

Item 1B.   Unresolved SEC Comments

None.

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Item 2.   Properties

General

At December 31, 2007, the Consolidated Operating Partnership and the Other Real Estate Partnerships owned 804 in-service industrial properties (711 of which were owned by the Consolidated Operating Partnership and 93 of which were owned by the Other Real Estate Partnerships) containing an aggregate of approximately 64.0 million square feet of GLA (55.4 million square feet of which comprised the properties owned by the Consolidated Operating Partnership and 8.6 million square feet of which comprised the properties owned by the Other Real Estate Partnerships) in 28 states in the United States and one province in Canada, with a diverse base of more than 2,000 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The properties are generally located in business parks that have convenient access to interstate highways and/or rail and air transportation. The weighted average age of the Consolidated Operating Partnership’s and the Other Real Estate Partnerships’ properties on a combined basis as of December 31, 2007 was approximately 20 years. The Consolidated Operating Partnership and Other Real Estate Partnerships maintain insurance on their respective properties that the Consolidated Operating Partnership and Other Real Estate Partnerships believe is adequate.

The Consolidated Operating Partnership and the Other Real Estate Partnerships classify their properties into five industrial categories: light industrial, bulk warehouse, R&D/flex, regional warehouse and manufacturing. While some properties may have characteristics which fall under more than one property type, the Consolidated Operating Partnership and the Other Real Estate Partnerships have used what they believe is the most dominant characteristic to categorize the property.

The following describes the different industrial categories:

•  Light industrial properties generally are of less than 100,000 square feet, have a ceiling height of 16-21 feet, are comprised of 5% — 50% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. The land use ratio is the ratio of the total property area to the area occupied by the building.

•  Bulk warehouse buildings generally are of more than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% — 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.

•  R&D/flex buildings generally are of less than 100,000 square feet, have a ceiling height of less than 16 feet, are comprised of 50% or more of office space, contain less than 25% of manufacturing space and have a land use ratio of 4:1.

•  Regional warehouses generally are of less than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% — 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.

•  Manufacturing properties are a diverse category of buildings that generally have a ceiling height of 10 — 18 feet, are comprised of 5% — 15% of office space, contain at least 50% of manufacturing space and have a land use ratio of 4:1.

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The following tables summarize certain information as of December 31, 2007, with respect to the in-service properties owned by the Consolidated Operating Partnership, each of which is wholly-owned.

Consolidated Operating Partnership
Property Summary

	Light Industrial				R&D/Flex				Bulk Warehouse				Regional Warehouse				Manufacturing
			Number of				Number of				Number of				Number of				Number of
Metropolitan Area	GLA		Properties		GLA		Properties		GLA		Properties		GLA		Properties		GLA		Properties
Atlanta, GA(a)		696,922		12		140,538		3		2,227,145		9		303,246		4		847,950		4
Baltimore, MD		836,730		14		87,415		3		383,135		3		—		—		171,000		1
Central PA(b)		146,990		2		—		—		487,000		1		—		—		—		—
Chicago, IL		910,717		16		174,841		3		1,956,494		10		119,980		3		421,000		2
Cincinnati, OH		604,389		7		—		—		1,525,130		7		51,070		1		—		—
Cleveland, OH		—		—		—		—		608,740		4		—		—		—		—
Columbus, OH(c)		217,612		2		—		—		2,442,967		7		—		—		—		—
Dallas, TX		2,475,044		49		454,963		18		1,762,736		16		677,433		10		128,478		1
Denver, CO		1,248,829		21		1,016,054		23		1,289,476		7		471,696		7		126,384		1
Detroit, MI		2,032,586		80		428,984		14		370,808		4		710,308		17		116,250		1
Houston, TX		330,322		7		111,111		5		2,233,064		13		355,793		5		—		—
Indianapolis, IN (d,e,f,g)		909,253		18		38,200		3		2,164,542		10		162,710		4		71,600		2
Inland Empire, CA		—		—		—		—		595,940		2		—		—		—		—
Los Angeles, CA		460,820		10		—		—		374,702		3		199,555		3		—		—
Louisville, KY		—		—		—		—		124,935		1		—		—		—		—
Miami, FL		—		—		—		—		—		—		228,726		5		—		—
Milwaukee, WI		263,567		6		—		—		737,609		5		90,089		1		—		—
Minneapolis/St. Paul, MN (h,i)		1,506,226		17		419,834		5		1,810,141		9		321,305		4		461,958		6
Nashville, TN		204,918		3		—		—		709,662		4		—		—		109,058		1
N. New Jersey		965,472		17		413,167		7		441,467		3		58,585		1		—		—
Philadelphia, PA		—		—		—		—		—		—		21,512		1		—		—
Phoenix, AZ		61,538		2		—		—		131,000		1		256,615		4		—		—
Salt Lake City, UT		583,301		34		146,937		6		528,481		3		—		—		—		—
San Diego, CA		112,773		5		—		—		—		—		69,985		2		—		—
S. New Jersey(j)		1,310,607		19		—		—		281,100		2		118,496		2		22,738		1
St. Louis, MO(k)		545,747		7		—		—		1,642,790		6		96,392		1		—		—
Tampa, FL(l)		234,679		7		441,765		22		209,500		1		—		—		—		—
Toronto, ON		57,540		1		—		—		897,954		3		—		—		—		—
Other(m)		597,547		5		—		—		1,427,328		8		—		—		36,000		1
Total		17,314,129		361		3,873,809		112		27,363,846		142		4,313,496		75		2,512,416		21

(a)	One property collateralizes a $2.8 million mortgage loan which matures on May 1, 2016.
(b)	One property collateralizes a $14.7 million mortgage loan which matures on December 1, 2010.
(c)	One property collateralizes a $5.0 million mortgage loan which matures on December 1, 2019.
(d)	Twelve properties collateralize a $1.1 million mortgage loan which matures on September 1, 2009.
(e)	One property collateralizes a $1.4 million mortgage loan which matures on January 1, 2013.
(f)	One property collateralizes a $2.4 million mortgage loan which matures on January 1, 2012.
(g)	One property collateralizes a $1.7 million mortgage loan which matures on June 1, 2014.
(h)	One property collateralizes a $5.1 million mortgage loan which matures on December 1, 2019.
(i)	One property collateralizes a $1.8 million mortgage loan which matures on September 30, 2024.
(j)	One property collateralizes a $6.4 million mortgage loan which matures on March 1, 2011.

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(k)	One property collateralizes a $13.8 million mortgage loan and a $11.7 million mortgage loan which both mature on January 1, 2014.
(l)	Six properties collateralize a $5.7 million mortgage loan which matures on July 1, 2009.
(m)	Properties are located in Wichita, KS, Grand Rapids, MI, Orlando, FL, Johnson County, KS, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Portland, OR, Sumner, IA, and Omaha, NE.

Consolidated Operating Partnership
Property Summary Totals

	Totals
					Average			GLA as a%
			Number of		Occupancy at			of Total
Metropolitan Area	GLA		Properties(b)		12/31/07(b)			Portfolio(b)
Atlanta, GA		4,215,801		32		92	%		7.6	%
Baltimore, MD		1,478,280		21		100	%		2.7	%
Central PA		633,990		3		100	%		1.1	%
Chicago, IL		3,583,032		34		97	%		6.5	%
Cincinnati, OH		2,180,589		15		98	%		3.9	%
Cleveland, OH		608,740		4		100	%		1.1	%
Columbus, OH		2,660,579		9		90	%		4.8	%
Dallas, TX		5,498,654		94		91	%		9.9	%
Denver, CO		4,152,439		59		91	%		7.5	%
Detroit, MI		3,658,936		116		91	%		6.6	%
Houston, TX		3,030,290		30		99	%		5.5	%
Indianapolis, IN		3,346,305		37		96	%		6.0	%
Inland Empire, CA		595,940		2		100	%		1.1	%
Los Angeles, CA		1,035,077		16		85	%		1.9	%
Louisville, KY		124,935		1		100	%		0.2	%
Miami, FL		228,726		5		99	%		0.4	%
Milwaukee, WI		1,091,265		12		94	%		2.0	%
Minneapolis/St. Paul, MN		4,519,464		41		95	%		8.2	%
Nashville, TN		1,023,638		8		92	%		1.8	%
N. New Jersey		1,878,691		28		95	%		3.4	%
Philadelphia, PA		21,512		1		100	%		0.0	%
Phoenix, AZ		449,153		7		100	%		0.8	%
Salt Lake City, UT		1,258,719		43		94	%		2.3	%
San Diego, CA		182,758		7		92	%		0.3	%
S. New Jersey		1,732,941		24		99	%		3.1	%
St. Louis, MO		2,284,929		14		99	%		4.1	%
Tampa, FL		885,944		30		93	%		1.6	%
Toronto, ON		955,494		4		100	%		1.7	%
Other(a)		2,060,875		14		100	%		3.7	%
Total or Average		55,377,696		711		95	%		100	%

(a) Properties are located in Wichita, KS, Grand Rapids, MI, Orlando, FL, Johnson County, KS, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Portland, OR, Sumner, IA, and Omaha, NE.

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(b) Includes only in-service properties.

Other Real Estate Partnerships
Property Summary

The following tables summarize certain information as of December 31, 2007 with respect to the in-service properties owned by the Other Real Estate Partnerships, each of which is wholly-owned.

Property Summary

	Light Industrial				R&D/Flex				Bulk Warehouse				Regional Warehouse				Manufacturing
			Number of				Number of				Number of				Number of				Number of
Metropolitan Area	GLA		Properties		GLA		Properties		GLA		Properties		GLA		Properties		GLA		Properties
Atlanta, GA		—		—		66,288		2		423,397		2		90,289		1		—		—
Baltimore, MD		152,904		2		82,245		2		—		—		—		—		—		—
Central, PA		394,732		5		—		—		410,000		2		117,599		3		—		—
Chicago, IL		108,692		2		—		—		390,104		2		50,009		1		—		—
Cincinnati, OH		—		—		—		—		—		—		79,800		1		—		—
Cleveland, OH		64,000		1		—		—		—		—		—		—		—		—
Columbus, OH		—		—		—		—		—		—		98,800		1		—		—
Denver, CO		—		—		—		—		110,400		1		49,968		1		—		—
Detroit, MI		329,297		5		23,392		1		160,035		1		—		—		—		—
Indianapolis, IN		—		—		—		—		1,183,927		3		60,000		1		—		—
Milwaukee, WI		—		—		93,705		2		100,520		1		39,468		1		—		—
Minneapolis/St. Paul, MN		60,849		1		—		—		—		—		—		—		532,119		3
Nashville, TN		—		—		—		—		160,661		1		—		—		—		—
N. New Jersey		194,157		3		—		—		—		—		—		—		—		—
Philadelphia, PA		878,456		18		127,802		5		732,265		3		189,716		3		30,000		1
Salt Lake City, UT		122,900		1		—		—		120,144		1		—		—		—		—
S. New Jersey		45,770		1		—		—		—		—		—		—		—		—
St. Louis, MO		—		—		—		—		245,000		2		—		—		—		—
Tampa, FL		—		—		44,427		1		—		—		—		—		—		—
Other(a)		99,000		3		—		—		300,000		1		88,000		1		—		—
Total		2,450,757		42		437,859		13		4,336,453		20		863,649		14		562,119		4

(a) Properties are located in Austin, TX, Des Moines, IA, and Winchester, VA.

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Other Real Estate Partnerships
Property Summary Totals

	Totals
					Average			GLA as a %
			Number of		Occupancy at			of Total
Metropolitan Area	GLA		Properties(b)		12/31/07(b)			Portfolio(b)
Atlanta, GA		579,974		5		100	%		6.7	%
Baltimore, MD		235,149		4		100	%		2.7	%
Central, PA		922,331		10		100	%		10.7	%
Chicago, IL		548,805		5		100	%		6.3	%
Cincinnati, OH		79,800		1		100	%		0.9	%
Cleveland, OH		64,000		1		100	%		0.7	%
Columbus, OH		98,800		1		100	%		1.1	%
Denver, CO		160,368		2		100	%		1.9	%
Detroit, MI		512,724		7		92	%		5.9	%
Indianapolis, IN		1,243,927		4		100	%		14.4	%
Milwaukee, WI		233,693		4		80	%		2.7	%
Minneapolis/St. Paul, MN		592,968		4		98	%		6.9	%
Nashville, TN		160,661		1		100	%		1.9	%
N. New Jersey		194,157		3		100	%		2.2	%
Philadelphia, PA		1,958,239		30		98	%		22.6	%
Salt Lake City, UT		243,044		2		99	%		2.8	%
S. New Jersey		45,770		1		89	%		0.5	%
St. Louis, MO		245,000		2		100	%		2.8	%
Tampa, FL		44,427		1		100	%		0.5	%
Other(a)		487,000		5		91	%		5.6	%
Total or Average		8,650,837		93		98	%		100.0	%

(a)	Properties are located in Austin, TX, Des Moines, IA, and Winchester, VA.
(b)	Includes only in-service properties.

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Property Acquisition Activity

During 2007, we acquired 103 industrial properties totaling approximately 8.0 million square feet of GLA at a total purchase price of approximately $374.0 million, or approximately $46.75 per square foot. We also purchased several land parcels for an aggregate purchase price of approximately $57.5 million. The 103 industrial properties acquired have the following characteristics:

						Average
	Number of					Occupancy
Metropolitan Area	Properties		GLA		Property Type	at 12/31/2007(b)
Atlanta, GA		2		972,125	Bulk Warehouse		N/A
Chicago, IL		3		276,643	Lt. Ind./Bulk/Regional Warehouse		100	%
Cincinnati, OH		6		329,070	Lt. Ind./Regional Warehouse		99	%
Columbus, OH(a)		1		340,000	Bulk Warehouse		N/A
Columbus, OH		2		547,406	Bulk Warehouse		N/A
Dallas, TX		1		106,210	Bulk Warehouse		100	%
Houston, TX(a)		31		1,070,233	Various		N/A
Houston, TX		14		451,370	Lt. Ind./Regional Warehouse/R&D Flex		85	%
Inland Empire, CA		2		595,940	Bulk Warehouse		100	%
Los Angeles, CA(a)		1		27,692	Regional Warehouse		N/A
Los Angeles, CA		12		918,974	Lt. Ind./Bulk/Regional Warehouse		100	%
Miami, FL		7		424,730	Bulk/Regional Warehouse		99	%
Milwaukee, WI		4		192,941	Light Industrial		N/A
Minneapolis, MN		1		132,000	Bulk Warehouse		N/A
Nashville, TN		1		76,016	Light Industrial		100	%
Philadelphia, PA(a)		1		137,036	Bulk Warehouse		N/A
Phoenix, AZ		1		39,360	Regional Warehouse		100	%
S. New Jersey(a)		2		157,450	Bulk/Regional Warehouse		N/A
S. New Jersey		3		360,638	Bulk/Regional Warehouse		100	%
Salt Lake City, UT		3		185,000	Light Industrial		100	%
San Diego, CA		2		70,414	Regional Warehouse		100	%
St. Louis, MO(a)		1		226,576	Bulk Warehouse		N/A
St. Louis		1		115,200	Bulk Warehouse		N/A
Toronto, ON		1		276,124	Bulk Warehouse		100	%
Total		103		8,029,148

(a)	Property was sold in 2007.
(b)	Includes only in-service properties.

During 2007, the Other Real Estate Partnerships acquired two industrial properties totaling approximately 0.6 million square feet of GLA at a total purchase price of approximately $25.1 million, or $41.83 per square foot. The Other Real Estate Partnerships also purchased several land parcels for an aggregate purchase price of approximately $14.2 million. The two industrial properties acquired have the following characteristics:

							Average
	Number of						Occupancy
Metropolitan Area	Properties		GLA		Property Type		at 12/31/2007(a)
Philadelphia, PA		2		560,728		Bulk/Regional Warehouse		100	%
Total		2		560,728

(a) Includes only in-service properties.

20

Property Development Activity

During 2007, we placed in-service 13 developments totaling approximately 2.3 million square feet of GLA at a total cost of approximately $125.7 million, or approximately $54.65 per square foot. The developments placed in-service have the following characteristics:

					Average
					Occupancy
Metropolitan Area	GLA		Property Type		at 12/31/07
Baltimore, MD(a)		130,200		Bulk Warehouse		N/A
Dallas, TX(a)		125,085		Bulk Warehouse		N/A
Denver, CO		20,320		R&D/Flex		100	%
Denver, CO		39,434		Light Industrial		100	%
Indianapolis, IN		71,753		Light Industrial		100	%
Indianapolis, IN		177,600		Bulk Warehouse		100	%
Indianapolis, IN(a)		241,824		Bulk Warehouse		N/A
Kansas City, KS		446,500		Bulk Warehouse		100	%
Louisville, KY		118,159		Bulk Warehouse		100	%
Minneapolis, MN		170,824		Bulk Warehouse		100	%
Minneapolis/St. Paul, MN(a)		340,478		Bulk Warehouse		N/A
Phoenix, AZ(a)		335,039		Bulk Warehouse		N/A
Salt Lake City, UT(a)		92,290		Regional Warehouse		N/A
Total		2,309,506

(a) Property was sold in 2007.

During 2007, the Other Real Estate Partnerships placed in-service one bulk warehouse development in Baltimore, Maryland, totaling approximately 0.3 million square feet of GLA at a total cost of approximately $13.3 million, or approximately $44.33 per square foot. As of December 31, 2007, the development is 100% occupied.

At December 31, 2007, we had 17 development projects not placed in service, totaling an estimated 4.8 million square feet and with an estimated completion cost of approximately $256.0 million. There can be no assurance that we will place these projects in service in 2008 or that the actual completion cost will not exceed the estimated completion cost stated above.

21

Property Sales

During 2007, we sold 159 industrial properties totaling approximately 13.1 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $840.4 million. The 159 industrial properties sold have the following characteristics:

	Number of
Metropolitan Area	Properties		GLA		Property Type
Atlanta, GA		4		421,036	Light Industrial/Bulk/Regional Warehouse
Baltimore, MD		2		657,800	Bulk Warehouse
Chicago, IL		7		868,843	Light Industrial/Bulk/Regional Warehouse
Cincinnati, OH		1		240,000	Bulk Warehouse
Columbus, OH		1		340,000	Bulk Warehouse
Dallas, TX		4		1,189,403	Light Industrial/Bulk Warehouse
Denver, CO		25		966,117	R&D Flex/Light Industrial
Detroit, MI		3		154,011	Light Industrial/R&D/Flex
Houston, TX		36		1,437,659	Lt. Ind/R&D/Flex/Regional
Indianapolis, IN		7		679,176	Bulk/Lt. Ind/R&D/Flex/Regional
Los Angeles, CA		5		482,833	Regional/Bulk Warehouse/Lt. Ind.
Louisville, KY		2		443,500	Bulk Warehouse
Minneapolis/St. Paul, MN		5		415,882	Light Industrial/R&D/Flex
N. New Jersey		2		154,965	Bulk Warehouse
Nashville, TN		5		866,121	Light Industrial/Bulk Warehouse
Philadelphia, PA		2		160,086	Bulk Warehouse/R&D Flex
Phoenix, AZ		9		718,821	Regional/Bulk Warehouse/Light Industrial
S. New Jersey		5		273,076	Light Industrial/Regional/Bulk Warehouse
Salt Lake City, UT		3		363,562	Regional/Bulk Warehouse
San Diego, CA		9		672,009	Regional/Bulk Warehouse
Tampa, FL		19		686,092	R&D/Flex/Light Industrial
Other(a)		3		922,576	Regional/Bulk Warehouse
Total		159		13,113,568

(a) Properties are located in Shreveport, LA, McAllen, TX, and Kansas City, MO.

During 2007, the Other Real Estate Partnerships sold five industrial properties totaling approximately 0.6 million square feet of GLA and a land parcel. Total gross sales proceeds approximated $40.9 million. The five properties sold have the following characteristics:

	Number of
Metropolitan Area	Properties		GLA		Property Type
Central, PA		1		49,350	Light Industrial
Chicago, IL		1		134,905	Bulk Warehouse
Indianapolis, IN		2		343,200	Bulk Warehouse
Phoenix, AZ		1		61,780	Regional Warehouse
		5		589,235

22

Property Acquisitions, Developments and Sales Subsequent to Year End

From January 1, 2008 to February 15, 2008, we acquired 11 industrial properties and several land parcels for a total estimated investment of approximately $79.1 million. We also sold three industrial properties and one land parcel for approximately $3.6 million of gross proceeds during this period.

Tenant and Lease Information

We have a diverse base of more than 2,000 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property’s operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2007, approximately 95% of the GLA of our in-service properties was leased, and no single tenant or group of related tenants accounted for more than 1.6% of the Consolidated Operating Partnerships’ and Other Real Estate Partnerships’ combined rent revenues, nor did any single tenant or group of related tenants occupy more than 2.5% of the Consolidated Operating Partnership’s and Other Real Estate Partnership’s combined total GLA as of December 31, 2007.

The following table shows scheduled lease expirations for all leases for our in service properties as of December 31, 2007.

	Number of				Percentage of			Annual Base Rent		Percentage of Total
	Leases		GLA		GLA			Under Expiring		Annual Base Rent
Year of Expiration(1)	Expiring		Expiring(2)		Expiring			Leases		Expiring(2)
								(In thousands)
2008		594		10,644,802		20	%		46,078		20	%
2009		429		8,755,883		17	%		40,805		17	%
2010		418		8,159,848		16	%		37,417		16	%
2011		251		6,730,302		13	%		32,342		14	%
2012		188		4,564,156		9	%		22,313		10	%
2013		76		3,246,955		6	%		13,956		6	%
2014		33		1,634,425		3	%		8,058		3	%
2015		32		2,311,305		4	%		7,261		3	%
2016		22		1,304,386		2	%		5,057		2	%
2017		13		1,290,602		2	%		5,779		2	%
Thereafter		27		3,790,552		7	%		14,976		6	%
Total		2,083		52,433,216		100	%	$	234,042		100.0	%

(1)	Lease expirations as of December 31, 2007 assume tenants do not exercise existing renewal, termination or purchase options.
(2)	Does not include existing vacancies of 2,944,480 aggregate square feet.

The Other Real Estate Partnerships have a diverse base of more than 200 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property’s operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2007, approximately 98% of the GLA of the Other Real Estate Partnerships’ in-service properties was leased.

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The following table shows scheduled lease expirations for all leases for the Other Real Estate Partnerships’ properties in-service as of December 31, 2007.

	Number of				Percentage of			Annual Base Rent		Percentage of Total
	Leases		GLA		GLA			Under Expiring		Annual Base Rent
Year of Expiration(1)	Expiring		Expiring(2)		Expiring			Leases		Expiring(2)
								(In thousands)
2008		63		1,923,899		23	%		8,207		21	%
2009		49		1,330,470		16	%		6,594		17	%
2010		51		1,435,454		17	%		6,995		18	%
2011		28		980,125		12	%		5,419		14	%
2012		25		1,533,750		18	%		6,770		18	%
2013		7		385,279		5	%		1,402		4	%
2014		3		180,160		2	%		654		2	%
2015		3		244,803		3	%		803		2	%
2016		1		110,000		1	%		417		1	%
2017		1		20,370		0	%		126		0	%
Thereafter		6		321,696		4	%		1,101		3	%
Total		237		8,466,006		100.0	%	$	38,488		100.0	%

(1)	Lease expirations as of December 31, 2007 assume tenants do not exercise existing renewal, termination, or purchase options.
(2)	Does not include existing vacancies of 184,831 aggregate square feet.

Item 3.   Legal Proceedings

We are involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on our results of operations, financial position or liquidity.

Item 4.   Submission of Matters to a Vote of Security Holders

None.

PART II

Item 5.   Market for Registrant’s Partners’ Capital, Related Partner Matters and Issuer Purchases of Equity Securities

There is no established public trading market for the general partner and limited partner Units. As of February 15, 2008, there were 236 holders of record of general partner and limited partner Units (“Unit”).

Beginning with the third quarter of 1994, we have made consecutive quarterly distributions to our partners with respect to general partner and limited partner Units since the initial public offering of the Company in June 1994. The current indicated annual distribution rate with respect to general partner and limited partner Units is $2.88 per Unit ($.7200 per Unit per quarter). Our ability to make distributions depends on a number of factors, including our net cash provided by operating activities, capital commitments and debt repayment schedules. Holders of general partner and limited partner Units are entitled to receive distributions when, as and if declared by the Board of Directors of the Company, our general partner, after the priority distributions required under our partnership agreement have been made with respect to Preferred Units out of any funds legally available for that purpose.

During the year ended December 31, 2007 the Company repurchased 1,797,714 shares at an average price per share of $38.62, including brokerage commissions.

24

The following table sets forth the distributions per Unit paid or declared by us during the periods noted:

	Distribution
Quarter Ended	Declared
December 31, 2007	$	0.7200
September 30, 2007	$	0.7100
June 30, 2007	$	0.7100
March 31, 2007	$	0.7100
December 31, 2006	$	0.7100
September 30, 2006	$	0.7000
June 30, 2006	$	0.7000
March 31, 2006	$	0.7000

During 2007, the Operating Partnership did not issue any Units.

Subject to lock-up periods and certain adjustments, Units of the Operating Partnership are convertible into common stock of the Company on a one-for-one basis or cash at the option of the Company.

Item 6.   Selected Financial Data

The following sets forth selected financial and operating data for the Consolidated Operating Partnership on a historical consolidated basis. The following data should be read in conjunction with the Consolidated Financial Statements and Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-K. The historical statements of operations for the years ended December 31, 2007, 2006, 2005, 2004, and 2003 include our results of operations as derived from our audited financial statements, adjusted for discontinued operations. The results of operations of properties sold are presented in discontinued operations if such properties met both of the following criteria: (a) the operations and cash flows of the property have been (or will be) eliminated from our ongoing operations as a result of the disposition and (b) we will not have any significant involvement in the operations of the property after the disposal transaction. The historical balance sheet data and other data as of December 31, 2007, 2006, 2005, 2004, and 2003 include our balances as derived from our audited financial statements.

	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	12/31/07			12/31/06			12/31/05			12/31/04			12/31/03
	(In thousands, except per unit and property data)
Statement of Operations Data:
Total Revenues	$	382,462		$	305,225		$	250,746		$	201,672		$	181,871
Interest Income		1,790			947			1,075			2,025			1,698
Mark-to-Market/(Loss) Gain on Settlement of Interest Rate Protection Agreement		—			(3,112	)		811			1,583			—
Property Expenses		(113,820	)		(101,516	)		(83,676	)		(67,816	)		(62,470	)
General and Administrative Expense		(92,005	)		(76,633	)		(54,846	)		(38,912	)		(25,607	)
Interest Expense		(119,314	)		(121,130	)		(108,164	)		(98,458	)		(94,637	)
Amortization of Deferred Financing Costs		(3,210	)		(2,664	)		(2,122	)		(1,928	)		(1,761	)
Depreciation and Other Amortization		(132,380	)		(112,179	)		(82,259	)		(60,307	)		(48,073	)
Contractor Expenses		(34,553	)		(10,263	)		(15,574	)		—			—
(Loss) Gain from Early Retirement of Debt		(393	)		—			82			(515	)		—
Equity in Income of Other Real Estate Partnerships		26,249			33,531			48,212			29,203			43,332
Equity in Income of Joint Ventures		29,958			30,671			3,698			35,840			539
Income Tax Benefit		10,579			9,884			14,337			8,195			5,878
(Loss) Income from Continuing Operations		(44,637	)		(47,239	)		(27,680	)		10,582			770
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $237,368, $196,622, $102,926, $81,806, and $74,797 for the Years Ended December 31, 2007, 2006, 2005, 2004, and 2003, respectively)		251,763			220,235			132,979			116,094			127,172
Provision for Income Taxes Allocable to Discontinued Operations (Including $36,032, $47,511 $20,529, $8,659 and $2,154 allocable to Gain on Sale of Real Estate for the Years ended December 31, 2007, 2006, 2005, 2004, and 2003, respectively)		(38,044	)		(51,102	)		(23,898	)		(11,275	)		(3,866	)
Gain on Sale of Real Estate		7,879			6,195			28,686			15,112			9,594

25

	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	12/31/07			12/31/06			12/31/05			12/31/04			12/31/03
	(In thousands, except per unit and property data)
Provision for Income Taxes Allocable to Gain on Sale of Real Estate		(3,082	)		(2,119	)		(10,871	)		(5,359	)		(2,614	)
Net Income		173,879			125,970			99,216			125,154			131,056
Redemption of Preferred Units		(2,017	)		(672	)		—			(7,959	)		—
Preferred Unit Distributions		(21,320	)		(21,424	)		(10,688	)		(14,488	)		(20,176	)
Net Income Available to Unitholders	$	150,542		$	103,874		$	88,528		$	102,707		$	110,880
Basic and Diluted Earnings Per Weighted Average Units Outstanding:
Loss from Continuing Operations Available to Unitholders	$	(1.25	)	$	(1.29	)	$	(0.42	)	$	(0.04	)	$	(0.29	)
Net Income Available to Unitholders	$	2.98		$	2.05		$	1.81		$	2.18		$	2.62
Distributions Per Unit	$	2.8500		$	2.8100		$	2.7850		$	2.7500		$	2.7400
Basic and Diluted Weighted Average Number of Units Outstanding		50,597			50,703			48,968			47,136			42,322
Net Income	$	173,879		$	125,970		$	99,216		$	125,154		$	131,056
Other Comprehensive (Loss) Income:
Settlement of Interest Rate Protection Agreements		(4,261	)		(1,729	)		—			6,816			—
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income		—			—			(159	)		—			—
Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements, Net of Tax Provision		3,819			(2,800	)		(1,414	)		106			251
Amortization of Interest Rate Protection Agreements		(916	)		(912	)		(1,085	)		(512	)		198
Foreign Currency Translation Adjustment, Net of Tax Provision		2,134			—			—			—			—
Other Comprehensive Income	$	174,655		$	120,529		$	96,558		$	131,564		$	131,505
Balance Sheet Data (End of Period):
Real Estate, Before Accumulated Depreciation	$	2,913,267		$	2,826,588		$	2,896,937		$	2,486,414		$	2,352,026
Real Estate, After Accumulated Depreciation		2,476,755			2,424,091			2,541,182			2,165,411			2,056,338
Real Estate Held for Sale, Net		37,875			115,961			16,840			50,286			—
Investment in and Advances to Other Real Estate Partnerships		408,849			371,390			378,864			339,967			374,906
Total Assets		3,301,143			3,235,366			3,230,465			2,721,151			2,633,262
Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net		1,946,670			1,834,658			1,811,322			1,572,473			1,451,269
Total Liabilities		2,218,940			2,051,706			2,016,827			1,711,429			1,570,195
Partners’ Capital		1,082,203			1,183,660			1,213,638			1,009,722			1,063,067
Other Data:
Cash Flow From Operating Activities	$	105,658		$	66,898		$	82,831		$	81,015		$	91,266
Cash Flow From Investing Activities		113,844			119,866			(404,742	)		5,570			18,115
Cash Flow From Financing Activities		(229,930	)		(178,451	)		325,653			(83,516	)		(109,381	)
Total In-Service Properties		711			764			786			726			729
Total In-Service GLA, in Square Feet		55,377,696			60,306,452			61,674,426			52,330,335			48,527,601
In-Service Occupancy Percentage		95	%		94	%		92	%		91	%		90	%

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with “Selected Financial Data” and the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to, changes in: international, national, regional and local economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rates, competition, supply and demand for industrial properties in our current and proposed market areas, potential environmental liabilities, slippage in

26

development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and our business, including additional factors that could materially affect our financial results, is included in Item 1A, “Risk Factors” and in the Operating Partnership’s other filings with the Securities and Exchange Commission (the “SEC”).

First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) which owns common units in the Operating Partnership (“Units”) representing an approximate 87.1% ownership interest at December 31, 2007. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $275.0 million at December 31, 2007. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986 (the “Code”). The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 12.9% interest in the Operating Partnership at December 31, 2007.

The Operating Partnership or First Industrial Investment, Inc. is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Investment, Inc., a taxable REIT subsidiary (the “TRS”), (together with the Operating Partnership and the L.L.C.s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership. We hold at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P. (the “Mortgage Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD., and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnerships’ operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership.

We also own minority equity interests in, and provide asset and property management services to, five joint ventures which invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program” and the “2006 Land/Development Joint Venture”). We also owned a minority interest in, and provided property management services to, a sixth joint venture (the “1998 Core Joint Venture”). On January 31, 2007, the Operating Partnership purchased the 90% equity interest from the institutional investor in the 1998 Core Joint Venture. Effective January 31, 2007, the assets and liabilities and results of operations of the 1998 Core Joint Venture are consolidated with the Operating Partnership since we own 100% of the equity interest. Prior to January 31, 2007, the 1998 Core Joint Venture was accounted for under the equity method of accounting. Additionally, in December 2007 we entered into two new joint ventures with institutional investors (the “2007 Canada Joint Venture” and the “2007 Europe Joint Venture”; together with 2003 Net Lease Joint Venture, 2005 Development/Repositioning Joint Venture, 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program, the 2006 Land/Development Joint Venture and the 1998 Core Joint Venture, the “Joint Ventures”). The operating data of our Joint Ventures is not consolidated with that of the Operating Partnership as presented herein. However, the operating data of the 2005 Development/Repositioning Joint Venture, referred to as FirstCal Industrial, LLC, is separately presented on a consolidated basis, separate from that of the Operating Partnership.

The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.

Our financial statements report the L.L.C.s and the TRS on a consolidated basis and the Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. Profits, losses and distributions of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships are

27

allocated to the general partner and the limited partners, or members, as applicable, in accordance with the provisions contained in the partnership agreements or operating agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships.

As of December 31, 2007, we owned 711 in-service industrial properties, containing an aggregate of approximately 55.4 million square feet of GLA. On a combined basis, as of December 31, 2007, the Other Real Estate Partnerships owned 93 in-service industrial properties, containing an aggregate of approximately 8.6 million square feet of GLA. Of the 93 industrial properties owned by the Other Real Estate Partnerships at December 31, 2007, 34 are held by the Pennsylvania Partnership, 22 are held by the Financing Partnership, 12 are held by the Securities Partnership, ten are held by the Mortgage Partnership, nine are held by the Harrisburg Partnership, four are held by the Indianapolis Partnership, one is held by TK-SV, LTD and one is held by FI Development Services, L.P.

We believe our financial condition and results of operations are, primarily, a function of our performance and our joint ventures’ performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, redeployment of internal capital and access to external capital.

We generate revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of our industrial properties and our joint ventures’ industrial properties. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. Our revenue growth is dependent, in part, on our ability to (i) increase rental income, through increasing either or both occupancy rates and rental rates at our and our joint ventures’ properties, (ii) maximize tenant recoveries and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveries are a significant source of funds, in addition to income generated from gains/losses on the sale of our properties and our joint ventures’ properties (as discussed below), for our distributions. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The leasing of property also entails various risks, including the risk of tenant default. If we were unable to maintain or increase occupancy rates and rental rates at our properties and our joint ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, our revenue growth would be limited. Further, if a significant number of our or our joint ventures’ tenants were unable to pay rent (including tenant recoveries) or if our or our joint ventures were unable to rent their properties on favorable terms, our financial condition, results of operations, cash flow and the Company’s ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.

Our revenue growth is also dependent, in part, on our ability and our joint ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Consolidated Operating Partnership itself, and through our various joint ventures, continually seeks to acquire existing industrial properties on favorable terms, and, when conditions permit, also seeks to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they are leased, generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds our distributions. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The acquisition and development of properties also entails various risks, including the risk that our investments and our joint ventures’ investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustain and/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, we may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, we face significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private investors. Further, as discussed below, we may not be able to finance the acquisition and development opportunities we identify. If we were unable to acquire and develop sufficient additional properties on favorable

28

terms or if such investments did not perform as expected, our revenue growth would be limited and our financial condition, results of operations, cash flow and the Company’s ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.

We also generate income from the sale of our properties and our joint ventures’ properties (including existing buildings, buildings which the we or our joint ventures have developed or re-developed on a merchant basis and land). The Consolidated Operating Partnership itself, and through our various joint ventures, is continually engaged in, and our income growth is dependent, in part, on systematically redeploying capital from properties and other assets with lower yield potential into properties and other assets with higher yield potential. As part of that process, we sell, on an ongoing basis, select stabilized properties or land or properties offering lower potential returns relative to their market value. The gain/loss on, and fees from, the sale of such properties are included in our income and are a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for our distributions. Also, a significant portion of our proceeds from such sales is used to fund the acquisition of existing, and the acquisition and development of new, industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. Further, our ability to sell properties is limited by safe harbor rules applying to REITs under the Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If we were unable to sell properties on favorable terms, our income growth would be limited and our financial condition, results of operations, cash flow and the Company’s ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.

Currently, we utilize a portion of the net sales proceeds from property sales, borrowings under its unsecured line of credit (the “Unsecured Line of Credit”) and proceeds from the issuance, when and as warranted, of additional debt and equity securities to finance future acquisitions and developments, and to fund our equity commitments to our joint ventures. Access to external capital on favorable terms plays a key role in our financial condition and results of operations, as it impacts our cost of capital and our ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to our joint ventures or through the issuance, when and as warranted, of additional equity securities. Our ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on our capital stock and debt, the market’s perception of our growth potential, our current and potential future earnings and cash distributions and the market price of the Company’s capital stock. If we were unable to access external capital on favorable terms, our financial condition, results of operations, cash flow and the Company’s ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in more detail in Note 3 to the consolidated financial statements. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

•  We maintain an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of our tenants to satisfy outstanding billings with us. The allowance for doubtful accounts is an estimate based on our assessment of the creditworthiness of our tenants.

•  Properties are classified as held for sale when management has approved the sales of such properties. When properties are classified as held for sale, we cease depreciating the properties and estimate the values of such properties and measure them at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, we decide not to sell a property previously classified as held for sale, we will reclassify such property as held and used. We estimate the value of such property and measure it at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the

29

property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. Fair value is determined by deducting from the estimated sales price of the property the estimated costs to close the sale.

•  We review our properties on a quarterly basis for possible impairment and provide a provision if impairments are determined. We utilize the guidelines established under Financial Accounting Standards Board’s Statement of Financial Accounting Standards (“FAS”) No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) to determine if impairment conditions exist. We review the expected undiscounted cash flows of each property to determine if there are any indications of impairment. If the expected undiscounted cash flows of a particular property are less than the net book basis of the property, we will recognize an impairment charge equal to the amount of carrying value of the property that exceeds the fair value of the property. Fair value is determined by discounting the future expected cash flows of the property. The calculation of the fair value involves subjective assumptions such as estimated occupancy, rental rates, ultimate residual value and the discount rate used to present value the cash flows.

•  We analyze our investments in joint ventures to determine whether the joint venture should be accounted for under the equity method of accounting or consolidated into our financial statements based on standards set forth under FAS Interpretation No. 46(R), Consolidation of Variable Interest Entities, EITF 96-16, Investor’s Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights and Statement of Position 78-9, Accounting for Investments in Real Estate Ventures. Based on the guidance set forth in these pronouncements, we do not consolidate any of our joint venture investments because either the joint venture has been determined not to be a variable interest entity or it has been determined we are not the primary beneficiary. Our assessment of whether we are the primary beneficiary of a variable interest involves the consideration of various factors including the form of our ownership interest, our representation on the entity’s governing body, the size of our investment and future cash flows of the entity.

•  We capitalize (direct and certain indirect) costs incurred in developing, renovating, acquiring and rehabilitating real estate assets as part of the investment basis. Costs incurred in making certain other improvements are also capitalized. During the land development and construction periods, we capitalize interest costs, real estate taxes and certain general and administrative costs of the personnel performing development, renovations or rehabilitation up to the time the property is substantially complete. The determination and calculation of certain costs requires estimates by us. Amounts included in capitalized costs are included in the investment basis of real estate assets.

•  We are engaged in the acquisition of individual properties as well as multi-property portfolios. In accordance with FAS No. 141, “Business Combinations” (“FAS 141”), we are required to allocate purchase price between land, building, tenant improvements, leasing commissions, in-place leases, tenant relationships and above and below market leases. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) our estimate of fair market lease rents for each corresponding in-place lease. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental income. In-place lease and tenant relationship values for acquired properties are recorded based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the respective tenant. The value allocated to in-place lease intangible assets is amortized to depreciation and amortization expense over the remaining lease term of the respective lease. The value allocated to tenant relationship is amortized to depreciation and amortization expense over the expected term of the relationship, which includes an estimate of the probability of lease renewal and its estimated term. We also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based on our assessment of various characteristics of the markets where the property is located and the expected cash flows of the property.

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•  In the preparation of our consolidated financial statements, significant management judgment is required to estimate our current and deferred income tax liabilities, and our compliance with REIT qualification requirements. Our estimates are based on our interpretation of tax laws. These estimates may have an impact on the income tax expense recognized. Adjustments may be required by a change in assessment of our deferred income tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities, our inability to qualify as a REIT, and changes in tax laws. Adjustments required in any given period are included within the income tax provision.

RESULTS OF OPERATIONS

Comparison of Year Ended December 31, 2007 to Year Ended December 31, 2006

Our net income available to unitholders was $150.5 million and $103.9 million for the year ended December 31, 2007 and 2006, respectively. Basic and diluted net income available to unitholders were $2.98 per unit for the year ended December 31, 2007 and $2.05 per unit for the year ended December 31, 2006.

The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the year ended December 31, 2007 and December 31, 2006. Same store properties are properties owned prior to January 1, 2006 and held as an operating property through December 31, 2007 and developments and redevelopments that were stabilized (generally defined as 90% occupied) prior to January 1, 2006 or were substantially completed for 12 months prior to January 1, 2006. Acquired properties are properties that were acquired subsequent to December 31, 2005 and held as an operating property through December 31, 2007. Sold properties are properties that were sold subsequent to December 31, 2005. (Re)Developments and land are land parcels and developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2006 or b) stabilized prior to January 1, 2006. Other revenues are derived from the operations of our maintenance company, fees earned from our joint ventures, and other miscellaneous revenues. Contractor revenues and expenses represent revenues earned and expenses incurred in connection with the TRS acting as general contractor to construct industrial properties, including industrial properties for the 2005 Development/Repositioning Joint Venture and also includes revenues and expenses related to the development of properties for third parties. Other expenses are derived from the operations of our maintenance company and other miscellaneous regional expenses.

Our future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. Our future revenues and expenses may vary materially from historical rates.

At December 31, 2007 and 2006, the occupancy rates of our same store properties were 93.5% and 91.7%, respectively.

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	2007			2006			$ Change			% Change
	($ in 000’s)
REVENUES
Same Store Properties	$	260,387		$	249,270		$	11,117			4.5	%
Acquired Properties		47,762			14,369			33,393			232.4	%
Sold Properties		37,203			74,238			(37,035	)		(49.9	)%
(Re)Developments and Land, Not Included Above		4,637			3,255			1,382			42.5	%
Other		36,890			29,958			6,932			23.1	%
	$	386,879		$	371,090		$	15,789			4.3	%
Discontinued Operations		(40,045	)		(76,405	)		36,360			(47.6	)%
Subtotal Revenues	$	346,834		$	294,685		$	52,149			17.7	%
Contractor Revenues		35,628			10,540			25,088			238.0	%
Total Revenues	$	382,462		$	305,225		$	77,237			25.3	%

Revenues from same store properties increased by $11.1 million due primarily to an increase in same store property occupancy rates and an increase in same store rental rates. Revenues from acquired properties increased $33.4 million due to the 182 industrial properties acquired subsequent to December 31, 2005 totaling approximately 17.7 million square feet of gross leasable area (“GLA”). Revenues from sold properties decreased $37.0 million due to the 268 industrial properties sold subsequent to December 31, 2005 totaling approximately 29.2 million square feet of GLA. Revenues from (re)developments and land increased $1.4 million due to an increase in occupancy. Other revenues increased by approximately $6.9 million due primarily to an increase in joint venture fees and fees earned related to us assigning our interest in certain purchase contracts to third parties for consideration. Contractor revenues increased $25.1 million for the year ended December 31, 2007 due primarily to increased third party development activity and an increased number of construction projects for which the TRS acted as general contractor.

	2007			2006			$ Change			% Change
	($ in 000’s)
PROPERTY AND CONTRACTOR EXPENSES
Same Store Properties	$	83,576		$	82,204		$	1,372			1.7	%
Acquired Properties		11,939			3,451			8,488			246.0	%
Sold Properties		11,332			22,274			(10,942	)		(49.1	)%
(Re) Developments and Land, Not Included Above		3,359			2,872			487			17.0	%
Other		16,602			15,429			1,173			7.6	%
	$	126,808		$	126,230		$	578			0.5	%
Discontinued Operations		(12,988	)		(24,714	)		11,726			(47.4	)%
Property Expenses	$	113,820		$	101,516		$	12,304			12.1	%
Contractor Expenses		34,553			10,263			24,290			236.7	%
Total Property and Contractor Expenses	$	148,373		$	111,779		$	36,594			32.7	%

Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses, and contractor expenses. Property expenses from same store properties increased by $1.4 million due primarily to an increase in real estate taxes due to a reassessment of values of certain of our properties, as well as an increase in repairs and maintenance. Property expenses from acquired properties increased by $8.5 million due to properties acquired subsequent to December 31, 2005. Property expenses from sold properties decreased by $10.9 million due to properties sold subsequent to

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December 31, 2005. Property expenses from (re)developments and land increased $0.5 million due to an increase in occupancy. The $1.2 million increase in other expense is primarily attributable to an increase in employee compensation. Contractor expenses increased $24.3 million for the year ended December 31, 2007 primarily due to increased third party development activity and an increased number of construction projects for which the TRS acted as general contractor.

General and administrative expense increased by approximately $15.4 million, or 20.1%, due primarily to increases in employee compensation related to compensation for additional employees as well as an increase in incentive compensation.

	2007			2006			$ Change			% Change
	($ in 000’s)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties	$	95,462		$	94,112		$	1,350			1.4	%
Acquired Properties		33,573			11,172			22,401			200.5	%
Sold Properties		11,381			26,750			(15,369	)		(57.5	)%
(Re) Developments and Land, Not Included Above		2,789			6,310			(3,521	)		(55.8	)%
Corporate Furniture, Fixtures and Equipment		1,837			1,913			(76	)		(4.0	)%
	$	145,042		$	140,257		$	4,785			3.4	%
Discontinued Operations		(12,662	)		(28,078	)		15,416			(54.9	)%
Total Depreciation and Other Amortization	$	132,380		$	112,179		$	20,201			18.0	%

Depreciation and other amortization for same store properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased by $22.4 million due to properties acquired subsequent to December 31, 2005. Depreciation and other amortization from sold properties decreased by $15.4 million due to properties sold subsequent to December 31, 2005. Depreciation and other amortization for (re)developments and land decreased by $3.5 million due primarily to accelerated depreciation recognized for the year ended December 31, 2006 on one property in Columbus, OH which was razed during 2006.

Interest income increased $0.8 million due primarily to an increase in the average mortgage loans receivable outstanding during the year ended December 31, 2007, as compared to the year ended December 31, 2006.

Interest expense decreased by approximately $1.8 million primarily due to a decrease in the weighted average interest rate for the year ended December 31, 2007 (6.45%), as compared to the year ended December 31, 2006 (6.72%) and due to an increase in capitalized interest for the year ended December 31, 2007 due to an increase in development activities, offset by an increase in the weighted average debt balance outstanding for the year ended December 31, 2007 ($1,981.4 million), as compared to the year ended December 31, 2006 ($1,878.2 million).

Amortization of deferred financing costs increased by $0.5 million, or 20.5%, due primarily to financing fees incurred associated with the issuance of $200.0 million of senior unsecured debt in December 2006.

In October 2005, we entered into an interest rate protection agreement which hedged the change in value of a build to suit development project we were constructing. This interest rate protection agreement had a notional value of $50.0 million, was based on the three month LIBOR rate, had a strike rate of 4.8675%, had an effective date of December 30, 2005 and a termination date of December 30, 2010. Per FAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement does not qualify for hedge accounting and the change in value of the interest

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rate protection agreement is recognized immediately in net income as opposed to other comprehensive income. On January 5, 2006, we settled the interest rate protection agreement for a payment of $0.2 million. Included in Mark-to-Market/Loss on Settlement of Interest Rate Protection Agreement for the year ended December 31, 2006 is the settlement and mark-to-market of the interest rate protection agreement.

In April 2006, we entered into interest rate protection agreements which we designated as cash flow hedges. Each of the interest rate protection agreements had a notional value of $74.8 million, were effective from May 10, 2007 through May 10, 2012, and fixed the LIBOR rate at 5.42%. In September 2006, the interest rate protection agreements failed to qualify for hedge accounting. We settled the interest rate protection agreements and paid the counterparties $2.9 million.

We recognized a $0.4 million loss from early retirement of debt for the year ended December 31, 2007. This includes $0.1 million write-off of financing fees associated with our previous line of credit agreement which was amended and restated on September 28, 2007. The loss from early retirement of debt also includes $0.3 million due to early payoffs on mortgage loans.

Equity in income of Other Real Estate Partnerships decreased by $7.3 million primarily due to a decrease in gain on sale of real estate by the Other Real Estate Partnerships.

Equity in income of joint ventures decreased by $0.7 million primarily due to a decrease in our economic share of the gains and earn outs on property sales from the 2005 Development/Repositioning Joint Venture during the year ended December 31, 2007, partially offset by an increase in our economic share of the gains on property sales from the 2005 Core Joint Venture for the year ended December 31, 2007.

The year to date income tax provision (included in continuing operations, discontinued operations and gain of sale) decreased $12.8 million, in the aggregate, due primarily to a decrease in rental income and gain on sale of real estate and an increase in general and administrative expenses, partially offset by an increase in joint venture fees and management/leasing fees, and a decrease in interest expense within the TRS.

The $7.9 million gain on sale of real estate for the year ended December 31, 2007, resulted from the sale of three industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $6.2 million gain on sale of real estate for the year ended December 31, 2006, resulted from the sale of several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.

The following table summarizes certain information regarding the industrial properties included in discontinued operations for the year ended December 31, 2007 and December 31, 2006.

	2007			2006
	($ in 000’s)
Total Revenues	$	40,045		$	76,405
Property Expenses		(12,988	)		(24,714	)
Depreciation and Amortization		(12,662	)		(28,078	)
Gain on Sale of Real Estate		237,368			196,622
Provision for Income Taxes		(38,044	)		(51,102	)
Income from Discontinued Operations	$	213,719		$	169,133

Income from discontinued operations (net of income taxes) for the year ended December 31, 2007 reflects the results of operations and gain on sale of real estate relating to 156 industrial properties that were sold during the year ended December 31, 2007 and the results of operations of six properties that were identified as held for sale at December 31, 2007.

Income from discontinued operations (net of income taxes) for the year ended December 31, 2006 reflects the results of operations of the 156 industrial properties that were sold during the year ended December 31, 2007, the results of operations of 109 industrial properties that were sold during the year ended December 31, 2006, the results of operations of the six industrial properties identified as held for sale at December 31, 2007

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and gain on sale of real estate relating to 109 industrial properties that were sold during the year ended December 31, 2006.

Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005

Our net income available to unitholders was $103.9 million and $88.5 million for the years ended December 31, 2006 and December 31, 2005, respectively. Basic and diluted net income available to unitholders was $2.05 per unit for the year ended December 31, 2006, and $1.81 per unit for the year ended December 31, 2005.

The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2006 and December 31, 2005. Same store properties are properties owned prior to January 1, 2005 and held as an operating property through December 31, 2006 and developments and redevelopments that were stabilized (generally defined as 90% occupied) prior to January 1, 2005 or were substantially completed for 12 months prior to January 1, 2005. Acquired properties are properties that were acquired subsequent to December 31, 2004 and held as an operating property through December 31, 2006. Sold properties are properties that were sold subsequent to December 31, 2004. (Re)Developments and land are land parcels and developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2005 or b) stabilized prior to January 1, 2005. Other revenues are derived from the operations of our maintenance company, fees earned from our joint ventures, and other miscellaneous revenues. Contractor revenues and expenses represent revenues earned and expenses incurred in connection with the TRS acting as general contractor to construct industrial properties, including industrial properties for the 2005 Development/Repositioning Joint Venture and also includes revenues and expenses related to the development of properties for third parties. Other expenses are derived from the operations of our maintenance company and other miscellaneous regional expenses.

At December 31, 2006 and 2005, the occupancy rates of our same store properties were 92.0% and 91.2%, respectively.

	2006			2005			$ Change			% Change
	($ in 000’s)
REVENUES
Same Store Properties	$	222,703		$	222,283		$	420			0.2	%
Acquired Properties		73,069			15,578			57,491			369.1	%
Sold Properties		24,809			53,528			(28,719	)		(53.7	)%
(Re)Developments and Land, Not Included above		20,528			16,526			4,002			24.2	%
Other		29,981			19,098			10,883			57.0	%
		371,090			327,013			44,077			13.5	%
Discontinued Operations		(76,405	)		(92,508	)		16,103			(17.4	)%
Subtotal Revenues	$	294,685		$	234,505		$	60,180			25.7	%
Contractor Revenues		10,540			16,241			(5,701	)		(35.1	)%
Total Revenues	$	305,225		$	250,746		$	54,479			21.7	%

Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $57.5 million due to the 228 properties totaling approximately 28.1 million square feet of GLA acquired subsequent to December 31, 2004. Revenues from sold properties decreased $28.7 million due to the 191 industrial properties totaling approximately 26.7 million square feet of GLA sold subsequent to December 31, 2004. Revenues from (re)developments and land increased by approximately $4.0 million due primarily to an increase in properties placed in service during 2006 and 2005. Other revenues increased by approximately $10.9 million due primarily to an increase in joint venture fees, partially offset by a decrease in assignment fees. Contractor revenues decreased $5.7 million due to decreased third party development activity.

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	2006			2005			$ Change			% Change
				($ in 000’s)
PROPERTY AND CONTRACTOR EXPENSES
Same Store Properties	$	76,080		$	74,077		$	2,003			2.7	%
Acquired Properties		18,783			5,184			13,599			262.3	%
Sold Properties		7,133			16,794			(9,661	)		(57.5	)%
(Re)Developments and Land, Not Included above		8,805			8,242			563			6.8	%
Other		15,429			11,324			4,105			36.3	%
		126,230			115,621			10,609			9.2	%
Discontinued Operations		(24,714	)		(31,945	)		7,231			(22.6	)%
Property Expenses	$	101,516		$	83,676		$	17,840			21.3	%
Contractor Expenses		10,263			15,574			(5,311	)		(34.1	)%
Total Property and Contractor Expenses	$	111,779		$	99,250		$	12,529			12.6	%

Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses, and contractor expenses. Property expenses from same store properties increased $2.0 million or 2.7% primarily due to an increase of $1.4 million in utility expense attributable to increases in gas and electric costs, an increase of $0.4 million in real estate tax expense, and an increase of $0.4 million in repair and maintenance. Property expenses from acquired properties increased by $13.6 million due to properties acquired subsequent to December 31, 2004. Property expenses from sold properties decreased by $9.7 million due to properties sold subsequent to December 31, 2004. Property expenses from (re)developments and land increased $0.6 million due primarily to an increase in properties placed in service in 2006 and 2005. Other expense increased by $4.1 million due primarily to increases in employee compensation. Contractor expenses decreased $5.3 million due to decreased third party development activity.

General and administrative expense increased by approximately $21.8 million, or 39.7%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.

	2006			2005			$ Change			% Change
	($ in 000’s)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties	$	72,578		$	73,599		$	(1,021	)		(1.4	)%
Acquired Properties		42,875			9,929			32,946			331.8	%
Sold Properties		9,189			17,895			(8,706	)		(48.7	)%
(Re)Developments and Land, Not Included above		13,702			9,602			4,100			42.7	%
Corporate Furniture, Fixtures and Equipment		1,913			1,371			542			39.5	%
		140,257			112,396			27,861			24.8	%
Discontinued Operations		(28,078	)		(30,137	)		2,059			(6.8	)%
Total Depreciation and Other Amortization	$	112,179		$	82,259		$	29,920			36.4	%

Depreciation and other amortization for same store properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased by $32.9 million due to properties acquired subsequent to December 31, 2004. Depreciation and other amortization from sold properties decreased by $8.7 million due to properties sold subsequent to December 31, 2004. Depreciation and other amortization for (re)developments and land increased by $4.1 million due primarily to accelerated depreciation on one property in Columbus, OH which was razed during the year ended December 31, 2006. Amortization of corporate

36

furniture, fixtures and equipment increased $0.5 million due primarily to expansion and improvement to corporate offices.

Interest income remained relatively unchanged.

In April 2006, we entered into interest rate protection agreements which it designated as cash flow hedges. Each of the interest rate protection agreements had a notional value of $74.8 million, were effective from May 10, 2007 through May 10, 2012, and fixed the LIBOR rate at 5.42%. In September 2006, the interest rate protection agreements failed to qualify for hedge accounting. We settled the interest rate protection agreements and paid the counterparties $2.9 million. In October 2005, we entered into an interest rate protection agreement which hedged the change in value of a build-to-suit development project we were constructing. This interest rate protection agreement did not qualify for hedge accounting. We recognized a loss of $0.2 million related to this interest rate protection agreement for the year ended December 31, 2006. Both transactions are recognized in the mark-to-market/(loss) gain on settlement of interest rate protection agreements caption on the consolidated statement of operations.

We recognized a $0.6 million gain related to the settlement/mark-to-market of two interest rate protection agreements we entered into during 2005 in order to hedge the change in value of a build to suit development project as well as $0.2 million in deferred gain that was reclassified out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.

Interest expense increased by $13.0 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2006 ($1,878.2 million), as compared to the year ended December 31, 2005 ($1,687.8 million) and an increase in the weighted average interest rate for the year ended December 31, 2006 (6.72%), as compared to the year ended December 31, 2005 (6.62%). This was partially offset by an increase in capitalized interest for the year ended December 31, 2006 due to an increase in development activities.

Amortization of deferred financing costs increased by approximately $0.5 million, or 25.5%, due primarily to financing fees incurred associated with the amendment and restatement of our Unsecured Line of Credit in August 2005, the issuance of the 2016 Notes in January 2006 and the issuance of the 2011 Exchangeable Notes in September 2006.

We recognized approximately $0.08 million of gain on the early retirement of debt for the year ended December 31, 2005, comprised of $0.05 million write-off of financing fees associated with our previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $0.3 million of fees and a write-off of loan premium of $0.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005.

Equity in income of Other Real Estate Partnerships decreased by $14.7 million primarily due to a decrease in gain on sale of real estate.

Equity in income of joint ventures increased by approximately $27.0 million due primarily to our economic share of the gains and earn outs on property sales from the 2005 Development/Repositioning Joint Venture and the 2005 Core Joint Venture during the year ended December 31, 2006.

The income tax provision (included in continuing operations, discontinued operations and gain on sale) increased by $22.9 million in the aggregate, due primarily to an increase in the gain on sale of real estate, joint venture fees, equity in net income of joint ventures, partially offset by an increase in interest expense and an increase in general and administrative expense within the TRS.

The $6.2 million gain on sale of real estate for the year ended December 31, 2006 resulted from the sale of several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $28.7 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of nine industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.

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The following table summarizes certain information regarding the industrial properties included in discontinued operations for the years ended December 31, 2006 and December 31, 2005.

	Year Ended
	December 31,
	2006			2005
Total Revenues	$	76,405		$	92,508
Property Expenses		(24,714	)		(31,945	)
Interest Expense		—			(373	)
Depreciation and Amortization		(28,078	)		(30,137	)
Gain on Sale of Real Estate		196,222			102,926
Provision for Income Taxes		(51,102	)		(23,898	)
Income from Discontinued Operations	$	169,133		$	109,081

Income from discontinued operations, net of income taxes, for the year ended December 31, 2006 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2007, and the results of operations and gain on sale of real estate of $196.6 million relating to 109 industrial properties that were sold during the year ended December 31, 2006 and the results of operations from six properties identified as held for sale at December 31, 2007.

Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations of industrial properties that were sold during the years ended December 31, 2007 and 2006, six properties identified as held for sale at December 31, 2007, the results of operations and gain on sale of real estate of $102.9 million from the 73 industrial properties which were sold during the year ended December 31, 2005.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2007, our cash and restricted cash was approximately $4.7 and $24.9 million, respectively. Restricted cash is primarily comprised of cash held in escrow in connection with mortgage debt requirements and gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as we exchange industrial properties under Section 1031 of the Code.

We have considered our short-term (one year or less) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We believe that our principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required by the Company to maintain the Company’s REIT qualification under the Code. We anticipate that these needs will be met with cash flows provided by operating and investment activities.

We expect to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, the issuance of long-term unsecured indebtedness and additional Units and preferred Units. On April 30, 2007, the Company and the Operating Partnership filed a registration statement with the SEC covering an indefinite number or amount of securities to be issued in the following three years.

We also may finance the development or acquisition of additional properties through borrowings under our Unsecured Line of Credit. At December 31, 2007, borrowings under our Unsecured Line of Credit bore interest at a weighted average interest rate of 5.787%. As of February 15, 2008, we had approximately $47.9 million available for additional borrowings under our Unsecured Line of Credit. Our Unsecured Line of Credit bears interest at a floating rate of LIBOR plus 0.475% or the Prime Rate, at our election. Our Unsecured Line of Credit contains certain financial covenants including limitations on incurrence of debt and debt service coverage. Our access to borrowings may be limited if it fails to meet any of these covenants.

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Also, our borrowing rate on our Unsecured Line of Credit may increase in the event of a downgrade on our unsecured notes by the rating agencies.

We currently have credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BBB/Baa2/BBB, respectively. Our goal is to maintain its existing credit ratings. In the event of a downgrade, management believes we would continue to have access to sufficient capital; however, our cost of borrowing would increase and our ability to access certain financial markets may be limited.

Year Ended December 31, 2007

Net cash provided by operating activities of approximately $105.7 million for the year ended December 31, 2007 was comprised primarily of net income of approximately $173.9 million, the net change in operating assets and liabilities of approximately $25.1 million, and net distributions from joint ventures of $1.4 million, offset by adjustments for non-cash items of approximately $94.7 million. The adjustments for the non-cash items of approximately $94.7 million are primarily comprised of the gain on sale of real estate of approximately $245.2 million and the effect of the straight-lining of rental income of approximately $8.8 million, offset by depreciation and amortization of approximately $157.1 million, the provision for bad debt of $1.8 million, and loss on early retirement of debt of approximately $0.4 million.

Net cash provided by investing activities of approximately $113.8 million for the year ended December 31, 2007 was comprised primarily of the net proceeds from the sale of real estate, the repayment of notes receivable, distributions from the Other Real Estate Partnerships and distributions from our industrial real estate joint ventures, partially offset by the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, an increase in restricted cash that is primarily held by an intermediary for Section 1031 exchange purposes, investments in and advances to the Other Real Estate Partnerships and contributions and investments in our joint ventures and the funding of notes receivable.

During the year ended December 31, 2007, we acquired 103 industrial properties comprising approximately 8.0 million square feet of GLA and several land parcels. The purchase price for these acquisitions totaled approximately $431.5 million. We also substantially completed the development of 14 industrial properties comprising approximately 3.4 million square feet of GLA at a cost of approximately $107.4 million for the year ended December 31, 2007.

We invested approximately $27.7 million, and received total distributions of approximately $54.2 million from our industrial real estate joint ventures. As of December 31, 2007, our industrial real estate joint ventures owned 113 industrial properties comprising approximately 19.9 million square feet of GLA and several land parcels.

During the year ended December 31, 2007, we sold 159 industrial properties comprising approximately 13.1 million square feet of GLA and several land parcels. Net proceeds from the sales of the 159 industrial properties and several land parcels were approximately $760.8 million.

Net cash used in financing activities of approximately $229.9 million for the year ended December 31, 2007 was derived primarily from the redemption of preferred units, general partnership and limited partnership units and preferred general partnership unit distributions, net repayments under our Unsecured Line of Credit, the repurchase of restricted units and net repayments on mortgage loans payable, partially offset by the issuance of preferred units and senior unsecured debt and net proceeds from the exercise of stock options.

During the year ended December 31, 2007, the Company repurchased 1,797,714 shares of its common stock, totaling $69.4 million. We purchased general partner Units from the Company in the same amount.

On June 7, 2007, we redeemed the Series C Preferred Stock for $25.00 per Depositary Share, or $50.0 million in the aggregate, and paid a prorated second quarter dividend of $0.40729 per Depositary Share, totaling approximately $0.8 million. We also redeemed the Series C Preferred Units.

For the year ended December 31, 2007, certain directors and employees of the Company exercised 19,600 non-qualified employee stock options. Net proceeds to the Company were approximately $0.6 million.

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The Company contributed the proceeds and the Consolidated Operating Partnership, through the Operating Partnership, issued 19,600 Units to the Company.

On May 7, 2007, we issued the 2017 II Notes. Net of issuance costs, the Company received net proceeds of $149.6 million from the issuance of the 2017 II Notes. In April 2006, we entered into interest rate protection agreements to fix the interest rate on the 2017 II Notes prior to issuance. We settled the effective portion of the interest rate protection agreements on May 1, 2007 for a payment of $4.3 million, which is included in other comprehensive income.

On May 15, 2007, we paid off and retired the 2007 Unsecured Notes in the amount of $150.0 million.

Contractual Obligations and Commitments

The following table lists our contractual obligations and commitments as of December 31, 2007 (In thousands):

			Payments Due by Period
			Less Than
	Total		1 Year		1-3 Years		3-5 Years		Over 5 Years
Operating and Ground Leases*	$	52,764	$	3,339	$	5,821	$	4,692	$	38,912
Real Estate Development*		64,641		63,335		1,306		—		—
Long-term Debt		1,958,553		3,111		148,412		933,757		873,273
Interest Expense on Long Term Debt*		894,138		104,003		196,559		141,551		452,025
Total	$	2,970,096	$	173,788	$	352,098	$	1,080,000	$	1,364,210

* Not on balance sheet.

Off-Balance Sheet Arrangements

Letters of credit are issued in most cases as pledges to governmental entities for development purposes. At December 31, 2007, we have $9.6 million in outstanding letters of credit, none of which are reflected as liabilities on our balance sheet. We have no other off-balance sheet arrangements other than those disclosed on the Contractual Obligations and Commitments table above.

Environmental

We incurred environmental costs of approximately $0.3 million and $0.4 million in 2007 and 2006, respectively. We estimate 2008 costs of approximately $0.3 million. We estimate that the aggregate cost which needs to be expended in 2008 and beyond with regard to currently identified environmental issues will not exceed approximately $2.2 million.

Inflation

For the last several years, inflation has not had a significant impact on us because of the relatively low inflation rates in our markets of operation. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, many of the outstanding leases expire within six years which may enable us to replace existing leases with new leases at higher base rentals if rents of existing leases are below the then-existing market rate.

Market Risk

The following discussion about our risk-management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-

40

looking statements. Our business subjects us to market risk from interest rates, and to a much lessor extent, foreign currency fluctuations.

Interest Rate Risk

This analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by us at December 31, 2007 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.

In the normal course of business, we also face risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.

At December 31, 2007, $1,624.5 million (approximately 83.5% of total debt at December 31, 2007) of our debt was fixed rate debt and $322.1 million (approximately 16.5% of total debt at December 31, 2007) of our debt was variable rate debt. Currently, we do not enter into financial instruments for trading or other speculative purposes.

For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not our earnings or cash flows. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect our future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on us until we are required to refinance such debt. See Note 6 to the consolidated financial statements for a discussion of the maturity dates of our various fixed rate debt.

Based upon the amount of variable rate debt outstanding at December 31, 2007, a 10% increase or decrease in the interest rate on our variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $1.9 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2007 by approximately $55.3 million to $1,624.6 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2007 by approximately $59.3 million to $1,739.2 million.

The use of derivative financial instruments allows us to manage risks of increases in interest rates with respect to the effect these fluctuations would have on our earnings and cash flows. As of December 31, 2007, we had no outstanding derivative instruments.

Foreign Currency Exchange Rate Risk

Owning, operating and developing industrial property outside of the United States exposes the Company to the possibility of volatile movements in foreign exchange rates. Changes in foreign currencies can affect the operating results of international operations reported in U.S. dollars and the value of the foreign assets reported in U.S. dollars. The economic impact of foreign exchange rate movements is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. At December 31, 2007, the Company had only one property and one land parcel for which the U.S. dollar was not the functional currency. This property and land parcel are located in Ontario, Canada and use the Canadian dollar as their functional currency.

Subsequent Events

On January 22, 2008, we paid a fourth quarter 2007 distribution of $0.72 per Unit, totaling approximately $36.1 million.

From January 1, 2008 to February 15, 2008, the Company awarded 2,168 shares of restricted common stock to certain directors. We issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $0.1 million on the date of grant. The restricted common stock and units vest over a period of five years. Compensation expense will be charged to earnings over the respective vesting period.

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From January 1, 2008 to February 15, 2008, we acquired 11 industrial properties and several land parcels for a total estimated investment of approximately $79.1 million. We also sold three industrial properties and one land parcel for approximately $3.6 million of gross proceeds during this period.

In January 2008, we entered into two interest rate protection agreements which fixed the interest rate on forecasted offerings of unsecured debt which we designated as cash flow hedges (the “January 2008 Agreements”). The January 2008 Agreements each have a notional value of $59.8 million and are effective from May 15, 2009 through May 15, 2014. The January 2008 Agreements fix the LIBOR rate at 4.0725% and 4.0770%, respectively.

Related Party Transactions

We periodically engage in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the President and Chief Executive Officer and a director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2007, 2006 and 2005, this relative received approximately $0.2, $0.3 and $0.3 million in brokerage commissions.

Other

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” which establishes a common definition of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. For financial assets and liabilities and nonfinancial assets and liabilities that are remeasured at least annually, this statement is effective for fiscal years beginning after November 15, 2007. We do not expect that the implementation of this statement will have a material effect on our consolidated financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” which permits entities to choose to measure many financial instruments and certain other items at fair value. This statement is effective for fiscal years beginning after November 15, 2007. We do not expect that the implementation of this statement will have a material effect on our consolidated financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in it’s financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. We are currently evaluating the potential impact of adoption of SFAS 141R on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements-and Amendment of ARB No. 51.” (“SFAS 160”) SFAS 160 establishes accounting and reporting standards pertaining to ownership interests in subsidiaries held by parties other than the parent, the amount of net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. This statement also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. We do not expect the implementation of this statement will effect our consolidated financial statements.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

Response to this item is included in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.

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Item 8.   Financial Statements and Supplementary Data

See Index to Financial Statements and Financial Statement Schedule included in Item 15.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-15(b) as of the end of the period covered by this report. Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making its assessment of internal control over financial reporting, management used the criteria described in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Our management has concluded that, as of December 31, 2007, our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein within Item 15. See Report of Independent Registered Public Accounting Firm.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   Other Information

None.

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PART III

Item 10, 11, 12, 13 and 14.   Directors, Executive Officers and Corporate Governance, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions and Director Independence and Principal Accountant Fees and Services

The Operating Partnership has no directors or executive officers; instead it is managed by its sole general partner, the Company. The information with respect to the sole general partner of the Operating Partnership required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated or furnished, solely to the extent required by such item, from the Company’s definitive proxy statement, which is expected to be filed with the SEC no later than 120 days after the end of the Company’s fiscal year. Information from the Company’s definitive proxy statement shall not be deemed to be “filed” or “soliciting material,” or subject to liability for purposes of Section 18 of the Exchange Act to the maximum extent permitted under the Exchange Act.

PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a) Financial Statements, Financial Statement Schedule and Exhibits (1 & 2) See Index to Financial Statements and Financial Statement Schedule.

(3) Exhibits:

Exhibit
No.	Description
3.1	Eleventh Amended and Restated Partnership Agreement of First Industrial, L.P. dated August 21, 2006 (the “LP Agreement”) (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company, filed August 22, 2006, File No. 1-13102)
4.1	Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
4.2	Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
4.3	Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
4.4	Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, File No. 333-21873)
4.5	7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-13102)
4.6	Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
4.7	7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)

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Exhibit
No.	Description
4.8	Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
4.9	7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
4.10	Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011(incorporated by reference to Exhibit 4.16 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
4.11	Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
4.12	Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)
4.13	Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. and 7.75% Notes due in 2032 in the principal amount of $50 million issued by First Industrial L.P. (incorporated by reference to Exhibit 4.2 of the Operating Partnership’s Form 8-K dated April 4, 2002, File No. 333-21873)
4.14	Form of 7.75% Notes due 2032 in the principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)
4.15	Supplemental Indenture No. 8, dated as of May 17, relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership, dated May 27, 2004, File No. 333-21873)
4.16	Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership, dated June 17, 2004, File No. 333-21873)
4.17	Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed January 11, 2006, File No. 1-13102)
4.18	Indenture dated as of September 25, 2006 among First Industrial, L.P., as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K of the Operating Partnership, dated September 25, 2006, File No. 333-21873)
4.19	Form of 4.625% Exchangeable Senior Note due 2011 (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K of the Operating Partnership, dated September 25, 2006, File No. 333-21873)
4.20	Registration Rights Agreement dated September 25, 2006 among the Company, First Industrial, L.P. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K of the Operating Partnership, dated September 25, 2006, File No. 333-21873)
4.21	Supplemental Indenture No. 11, dated as of May 7, 2007, relating to 5.95% Senior Notes due 2017, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed May 5, 2007, File No. 1-13102)

45

Exhibit
No.	Description
10.1	Sales Agreement by and among the Company, First Industrial, L.P. and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of the Form 8-K of the Operating Partnership, dated September 16, 2004, File No. 333-21873)
10.2	Fifth Amended and Restated Unsecured Revolving Credit Agreement, dated as of September 28, 2007, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase Bank, NA and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed October 1, 2007, File No. 1-13102)
21	Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
23*	Consent of PricewaterhouseCoopers LLP
31.1*	Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
31.2*	Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
32**	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed herewith.
**	Furnished herewith.

46

EXHIBIT INDEX

Exhibit
No.	Description
3.1	Eleventh Amended and Restated Partnership Agreement of First Industrial, L.P. dated August 21, 2006 (the “LP Agreement”) (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company, filed August 22, 2006, File No. 1-13102)
4.1	Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
4.2	Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
4.3	Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
4.4	Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, File No. 333-21873)
4.5	7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-13102)
4.6	Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
4.7	7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
4.8	Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
4.9	7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
4.10	Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011(incorporated by reference to Exhibit 4.16 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
4.11	Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
4.12	Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)

47

Exhibit
No.	Description
4.13	Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. and 7.75% Notes due in 2032 in the principal amount of $50 million issued by First Industrial L.P. (incorporated by reference to Exhibit 4.2 of the Operating Partnership’s Form 8-K dated April 4, 2002, File No. 333-21873)
4.14	Form of 7.75% Notes due 2032 in the principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)
4.15	Supplemental Indenture No. 8, dated as of May 17, relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership, dated May 27, 2004, File No. 333-21873)
4.16	Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership, dated June 17, 2004, File No. 333-21873)
4.17	Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed January 11, 2006, File No. 1-13102)
4.18	Indenture dated as of September 25, 2006 among First Industrial, L.P., as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K of the Operating Partnership, dated September 25, 2006, File No. 333-21873)
4.19	Form of 4.625% Exchangeable Senior Note due 2011 (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K of the Operating Partnership, dated September 25, 2006, File No. 333-21873)
4.20	Registration Rights Agreement dated September 25, 2006 among the Company, First Industrial, L.P. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K of the Operating Partnership, dated September 25, 2006, File No. 333-21873)
4.21	Supplemental Indenture No. 11, dated as of May 7, 2007, relating to 5.95% Senior Notes due 2017, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed May 5, 2007, File No. 1-13102)
10.1	Sales Agreement by and among the Company, First Industrial, L.P. and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of the Form 8-K of the Operating Partnership, dated September 16, 2004, File No. 333-21873)
10.2	Fifth Amended and Restated Unsecured Revolving Credit Agreement, dated as of September 28, 2007, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase Bank, NA and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed October 1, 2007, File No. 1-13102)
21	Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
23*	Consent of PricewaterhouseCoopers LLP
31.1*	Certification of Principal Executive Officer of First Industrial Realty
31.2*	Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
32**	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed herewith.
**	Furnished herewith.

48

FIRST INDUSTRIAL, L.P.

INDEX TO FINANCIAL STATEMENTS

	Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		51
Consolidated Balance Sheets of First Industrial, L.P. as of December 31, 2007 and 2006		52
Consolidated Statements of Operations of First Industrial, L.P. for the Years Ended December 31, 2007, 2006 and 2005		53
Consolidated Statements of Comprehensive Income of First Industrial, L.P. for the Years Ended December 31, 2007, 2006 and 2005		54
Consolidated Statements of Changes in Partners’ Capital of First Industrial, L.P. for the Years Ended December 31, 2007, 2006 and 2005		55
Consolidated Statements of Cash Flows of First Industrial, L.P. for the Years Ended December 31, 2007, 2006 and 2005		56
Notes to the Consolidated Financial Statements		57

49

OTHER REAL ESTATE PARTNERSHIPS

INDEX TO FINANCIAL STATEMENTS

	Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		90
Combined Balance Sheets of the Other Real Estate Partnerships as of December 31, 2007 and 2006		91
Combined Statements of Operations of the Other Real Estate Partnerships for the Years Ended December 31, 2007, 2006 and 2005		92
Combined Statements of Changes in Partners’ Capital of the Other Real Estate Partnerships for the Years Ended December 31, 2007, 2006 and 2005		93
Combined Statements of Cash Flows of the Other Real Estate Partnerships for the Years Ended December 31, 2007, 2006 and 2005		94
Notes to Combined Financial Statements		95

FIRSTCAL INDUSTRIAL, L.L.C.

INDEX TO FINANCIAL STATEMENTS

	Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		103
Consolidated Statements of Financial Position of FirstCal Industrial, L.L.C. as of December 31, 2007 and 2006 (not covered by the report included herein)		104
Consolidated Statements of Operations of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005		105
Consolidated Statements of Changes in Members’ Capital of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005		106
Consolidated Statements of Cash Flows of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005		107
Notes to Consolidated Financial Statements		108

FIRST INDUSTRIAL, L.P.

FINANCIAL STATEMENT SCHEDULE

	Page
FINANCIAL STATEMENT SCHEDULE
Schedule III: Real Estate and Accumulated Depreciation		S-1

50

Report of Independent Registered Public Accounting Firm

To the Partners of

First Industrial, L.P.:

In our opinion, the consolidated financial statements in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of First Industrial, LP. and its subsidiaries (“the Consolidated Operating Partnership”) at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Consolidated Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Consolidated Operating Partnership’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and financial statement schedule and on the Consolidated Operating Partnership’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/  PricewaterhouseCoopers LLP

Chicago, Illinois

February 25, 2008

51

FIRST INDUSTRIAL, L.P.

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2007			2006
	(Dollars in thousands, except unit and per unit data)
ASSETS
Assets:
Investment in Real Estate:
Land	$	584,774		$	498,025
Buildings and Improvements		2,258,182			2,297,988
Construction in Progress		70,311			30,575
Less: Accumulated Depreciation		(436,512	)		(402,497	)
Net Investment in Real Estate		2,476,755			2,424,091
Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $3,038 and $9,688 at December 31, 2007 and December 31, 2006, respectively		37,875			115,961
Investments in and Advances to Other Real Estate Partnerships		408,849			371,390
Cash and Cash Equivalents		4,696			15,124
Restricted Cash		24,891			15,970
Tenant Accounts Receivable, Net		7,825			6,571
Investments in Joint Ventures		57,543			55,614
Deferred Rent Receivable, Net		27,999			24,721
Deferred Financing Costs, Net		15,373			15,210
Deferred Leasing Intangibles, Net		78,137			75,958
Prepaid Expenses and Other Assets, Net		161,200			114,756
Total Assets	$	3,301,143		$	3,235,366
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Mortgage Loans Payable, Net	$	73,550		$	77,926
Senior Unsecured Debt, Net		1,550,991			1,549,732
Unsecured Line of Credit		322,129			207,000
Accounts Payable and Accrued Expenses		188,269			128,691
Deferred Leasing Intangibles, Net		20,153			17,402
Rents Received in Advance and Security Deposits		26,537			26,097
Leasing Intangibles Held for Sale, Net of Accumulated Amortization of $0 and $183 at December 31, 2007 and December 31, 2006, respectively		—			2,310
Dividends Payable		37,311			42,548
Total Liabilities		2,218,940			2,051,706
Commitments and Contingencies		—			—
Partners’ Capital:
General Partner Preferred Units (1,550 and 21,550 units issued and outstanding at December 31, 2007 and 2006, respectively), with a liquidation preference of $275,000 and $325,000, respectively		266,211			314,208
General Partner Units (43,672,149 and 45,010,630 units issued and outstanding at December 31, 2007 and 2006, respectively)		678,586			730,493
Limited Partners’ Units (6,438,695 and 6,558,442 units issued and outstanding at December 31, 2007 and 2006, respectively)		148,429			150,758
Accumulated Other Comprehensive Loss		(11,023	)		(11,799	)
Total Partners’ Capital		1,082,203			1,183,660
Total Liabilities and Partners’ Capital	$	3,301,143		$	3,235,366

The accompanying notes are an integral part of the financial statements.

52

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
	(In thousands except per unit data)
Revenues:
Rental Income	$	240,316		$	203,005		$	165,610
Tenant Recoveries and Other Income		106,518			91,680			68,895
Contractor Revenues		35,628			10,540			16,241
Total Revenues		382,462			305,225			250,746
Expenses:
Property Expenses		113,820			101,516			83,676
General and Administrative		92,005			76,633			54,846
Depreciation and Other Amortization		132,380			112,179			82,259
Contractor Expenses		34,553			10,263			15,574
Total Expenses		372,758			300,591			236,355
Other Income/Expense:
Interest Income		1,790			947			1,075
Interest Expense		(119,314	)		(121,130	)		(108,164	)
Amortization of Deferred Financing Costs		(3,210	)		(2,664	)		(2,122	)
Mark-to-Market/(Loss) Gain on Settlement of Interest Rate Protection Agreements		—			(3,112	)		811
(Loss) Gain From Early Retirement of Debt		(393	)		—			82
Total Other Income/Expense		(121,127	)		(125,959	)		(108,318	)
Loss from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Income Tax Benefit		(111,423	)		(121,325	)		(93,927	)
Equity in Income of Other Real Estate Partnerships		26,249			33,531			48,212
Equity in Income of Joint Ventures		29,958			30,671			3,698
Income Tax Benefit		10,579			9,884			14,337
Loss from Continuing Operations		(44,637	)		(47,239	)		(27,680	)
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $237,368, $196,622, and $102,926 for the Years Ended December 31, 2007, 2006 and 2005, respectively)		251,763			220,235			132,979
Provision for Income Taxes Allocable to Discontinued Operations (Including $36,032, $47,511, and $20,529 allocable to Gain on Sale of Real Estate for the Year Ended December 31, 2007, 2006 and 2005, respectively)		(38,044	)		(51,102	)		(23,898	)
Income Before Gain on Sale of Real Estate		169,082			121,894			81,401
Gain on Sale of Real Estate		7,879			6,195			28,686
Provision for Income Taxes Allocable to Gain on Sale of Real Estate		(3,082	)		(2,119	)		(10,871	)
Net Income		173,879			125,970			99,216
Less: Preferred Unit Distributions		(21,320	)		(21,424	)		(10,688	)
Less: Redemption of Preferred Units		(2,017	)		(672	)		—
Net Income Available to Unitholders	$	150,542		$	103,874		$	88,528
Basic and Diluted Earnings Per Unit:
Loss from Continuing Operations Available to Unitholders	$	(1.25	)	$	(1.29	)	$	(0.42	)
Income from Discontinued Operations	$	4.22		$	3.34		$	2.23
Net Income Available to Unitholders	$	2.98		$	2.05		$	1.81
Weighted Average Units Outstanding		50,597			50,703			48,968
Distributions per Unit	$	2.8500		$	2.8100		$	2.7850
Net Income Available to Unitholders Attributable to:
General Partners	$	131,506		$	90,359		$	76,879
Limited Partners		19,036			13,515			11,649
Net Income Available to Unitholders	$	150,542		$	103,874		$	88,528

The accompanying notes are an integral part of the financial statements.

53

FIRST INDUSTRIAL , LP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
	(Dollars in thousands)
Net Income	$	173,879		$	125,970		$	99,216
Other Comprehensive Income (Loss):
Settlement of Interest Rate Protection Agreements		(4,261	)		(1,729	)		—
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income		—			—			(159	)
Mark-to-Market of Interest Rate Protection Agreements, Net of Tax Provision		3,819			(2,800	)		(1,414	)
Amortization of Interest Rate Protection Agreements		(916	)		(912	)		(1,085	)
Foreign Currency Translation Adjustment, Net of Tax Provision		2,134			—			—
Other Comprehensive Income	$	174,655		$	120,529		$	96,558

The accompanying notes are an integral part of the financial statements.

54

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
	(Dollars in thousands)
General Partner Preferred Units — Beginning of Year	$	314,208		$	303,068		$	121,584
Distributions		(23,337	)		(22,096	)		(10,688	)
Issuance of Preferred Units		—			192,624			181,484
Redemption of Preferred Units		(47,997	)		(181,484	)		—
Net Income		23,337			22,096			10,688
General Partner Preferred Units — End of Year	$	266,211		$	314,208		$	303,068
General Partner Units — Beginning of Year	$	730,492		$	773,921		$	757,840
Contributions and Issuance of General Partner Units		567			3,820			56,122
Issuance of General Partner Restricted Units		—			—			8,381
Call Spread		—			(6,835	)		—
Purchase of General Partnership Units		(69,430	)		—			—
Repurchase and Retirement of Restricted Units/Units		(3,939	)		(2,728	)		(3,285	)
Restricted Unit Forfeitures		—			—			(2,972	)
Distributions		(127,618	)		(125,986	)		(120,995	)
Unit Conversions		2,858			5,144			1,951
Amortization of General Partner Restricted Units		14,150			9,624			—
Reclassification to initially adopt SFAS No. 123R		—			(16,825	)		—
Net Income		131,506			90,357			76,879
General Partner Units — End of Year	$	678,586		$	730,492		$	773,921
Unamort. Value of Gen. Partner Restricted Units — Beg. of Year	$	—		$	(16,825	)	$	(19,611	)
Issuance of General Partner Restricted Units		—			—			(8,381	)
Amortization of General Partner Restricted Units		—			—			8,845
Restricted Unit Forfeitures		—			—			2,322
Reclassification to initially adopt SFAS No. 123R		—			16,825			—
Unamort. Value of Gen. Partner Restricted Units — End of Year	$	—		$	—		$	(16,825	)
Limited Partners Units — Beginning of Year	$	150,759		$	159,832		$	153,609
Contributions and Issuance of Limited Partner Units		—			1,288			14,698
Distributions		(18,508	)		(18,734	)		(18,173	)
Unit Conversions		(2,858	)		(5,144	)		(1,951	)
Net Income		19,036			13,517			11,649
Limited Partners Units — End of Year	$	148,429		$	150,759		$	159,832
Accum. Other Comprehensive Loss — Beginning of Year	$	(11,799	)	$	(6,358	)	$	(3,700	)
Settlement of Interest Rate Protection Agreements		(4,261	)		(1,729	)		—
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income		—			—			(159	)
Mark to Market of Interest Rate Protection Agreements, Net of Tax Provision		3,819			(2,800	)		(1,414	)
Amortization of Interest Rate Protection Agreements		(916	)		(912	)		(1,085	)
Foreign Currency Translation Adjustment, Net of Tax Provision		2,134			—			—
Accum. Other Comprehensive Loss — End of Year	$	(11,023	)	$	(11,799	)	$	(6,358	)
Total Partners’ Capital at End of Year	$	1,082,203		$	1,183,660		$	1,213,638

The accompanying notes are an integral part of the financial statements.

55

FIRST INDUSTRIAL, LP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	173,879		$	125,970		$	99,216
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation		105,628			107,418			86,588
Amortization of Deferred Financing Costs		3,210			2,664			2,122
Other Amortization		48,326			35,462			31,031
Provision for Bad Debt		1,812			1,906			1,689
Mark-to-Market of /Loss on Settlement of Interest Rate Protection Agreements		—			(16	)		(143	)
Equity in Income of Joint Ventures		(29,958	)		(30,671	)		(3,698	)
Distributions from Joint Ventures		31,365			31,664			3,866
Gain on Sale of Real Estate		(245,247	)		(202,817	)		(131,612	)
Loss (Gain) on Early Retirement of Debt		393			—			(82	)
Equity in Income of Other Real Estate Partnerships		(26,249	)		(33,531	)		(48,212	)
Distributions from Investment in Other Real Estate Partnerships		26,249			33,531			48,212
Decrease (Increase) in Developments for Sale Costs		1,209			5,883			(16,241	)
Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net		(22,529	)		(15,550	)		(13,835	)
Increase in Deferred Rent Receivable		(8,810	)		(9,092	)		(7,485	)
Increase in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits		46,374			14,077			31,415
Decrease in Restricted Cash		6			—			—
Net Cash Provided by Operating Activities		105,658			66,898			82,831
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of and Additions to Investment in Real Estate		(613,696	)		(742,414	)		(846,033	)
Net Proceeds from Sales of Investments in Real Estate		760,776			857,670			478,937
Investments in and Advances to Other Real Estate Partnerships		(66,322	)		(43,098	)		(122,606	)
Distributions/Repayments from Other Real Estate Partnerships		28,858			50,572			83,709
Contributions to and Investments in Joint Ventures		(27,696	)		(32,773	)		(45,175	)
Distributions from Joint Ventures		22,863			19,734			2,971
Funding of Notes Receivable		(8,385	)		—			—
Repayment and Sale of Mortgage Loans Receivable		26,350			11,200			58,375
Increase in Restricted Cash		(8,904	)		(1,025	)		(14,920	)
Net Cash Provided by (Used in) Investing Activities		113,844			119,866			(404,742	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Unit Contributions		567			3,462			55,754
Proceeds from the Issuance of Preferred Units		—			200,000			187,500
Preferred Unit Offering Costs		—			(7,103	)		(5,906	)
Unit Distributions		(146,660	)		(143,858	)		(137,672	)
Purchase of General Partner Units		(69,430	)		—			—
Repurchase of Restricted Units		(3,939	)		(2,660	)		(3,285	)
Redemption of Preferred Units		(50,014	)		(182,156	)		—
Preferred Unit Distributions		(26,023	)		(19,248	)		(8,162	)
Repayments of Mortgage Loans Payable		(41,475	)		(10,263	)		(1,951	)
Proceeds from Mortgage Loan Payable		—			—			1,167
Proceeds from Senior Unsecured Debt		149,595			399,306			—
Other Costs from Senior Unsecured Debt		(4,261	)		(1,729	)		—
Repayment of Senior Unsecured Debt		(150,000	)		(150,000	)		(50,000	)
Proceeds from Unsecured Lines of Credit		879,129			779,300			647,500
Repayments on Unsecured Lines of Credit		(764,000	)		(1,029,800	)		(357,500	)
Call Spread		—			(6,835	)		—
Debt Issuance Costs and Costs Incurred in Connection with the Early Retirement of Debt		(3,766	)		(6,867	)		(1,792	)
Cash Book Overdraft.		347			—			—
Net Cash (Used in) Provided by Financing Activities		(229,930	)		(178,451	)		325,653
Net (Decrease) Increase in Cash and Cash Equivalents		(10,428	)		8,313			3,742
Cash and Cash Equivalents, Beginning of Period		15,124			6,811			3,069
Cash and Cash Equivalents, End of Period	$	4,696		$	15,124		$	6,811

The accompanying notes are an integral part of the financial statements.

56

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit amounts)

1.   Organization and Formation of Partnership

First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) which owns common units in the Operating Partnership (“Units”) representing an approximate 87.1% and 87.3% ownership interest at December 31, 2007 and 2006, respectively. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $275,000 at December 31, 2007. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986 (the “Code”). The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership owned, in the aggregate, approximately a 12.9% and 12.7% interest in the Operating Partnership at December 31, 2007 and 2006, respectively. Unless the context otherwise requires, the terms the “Operating Partnership,” “we,” “us,” and “our” refer to First Industrial, L.P. and their controlled subsidiaries. We refer to our taxable REIT subsidiary, First Industrial Investment, Inc., as the “TRS.”

We are the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of the TRS (together with the Operating Partnership and the L.L.C.s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership. The Operating Partnership also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P, (the “Mortgage Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD. and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnership’s operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership.

We also own minority equity interests in, and provide various services to, five joint ventures which invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program” and the “2006 Land/Development Joint Venture”). We also owned economic interests in, and provided various services to, a sixth joint venture (the “1998 Core Joint Venture”). On January 31, 2007, we purchased the 90% equity interest from the institutional investor in the 1998 Core Joint Venture. Effective January 31, 2007, the assets and liabilities and results of operations of the 1998 Core Joint Venture are consolidated with the Consolidated Operating Partnership since we own 100% of the equity interest. Prior to January 31, 2007, the 1998 Core Joint Venture was accounted for under the equity method of accounting. Additionally, in December 2007, we entered into two new joint ventures (the “2007 Canada Joint Venture” and the “2007 Europe Joint Venture”; together with 2003 Net Lease Joint Venture, 2005 Development/Repositioning Joint Venture, 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program, the 2006 Land/Development Joint Venture and the 1998 Core Joint Venture, the “Joint Ventures”). At December 31, the 2007 Canada Joint Venture and the 2007 Europe Joint Venture did not own any properties. The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. The operating data of our Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein. However, the operating data of the 2005 Development/Repositioning Joint Venture, referred to as FirstCal Industrial, LLC, is separately presented on a consolidated basis, separate from that of the Operating Partnership.

The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnership for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.

As of December 31, 2007, we owned 787 industrial properties (inclusive of developments in progress), containing an aggregate of approximately 66.4 million square feet of gross leasable area (“GLA”). On a

57

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

combined basis, as of December 31, 2007, the Other Real Estate Partnerships owned 98 industrial properties, containing an aggregate of approximately 9.5 million square feet of GLA.

Profits, losses and distributions of us, the L.L.C.s and Other Real Estate Partnerships are allocated to the general partner and the limited partners, or the members, as applicable, in accordance with the provisions contained within the partnership agreements or ownership agreements, as applicable, of us, the L.L.C.s and the Other Real Estate Partnerships.

Any references to the number of buildings and square footage, in the financial statement footnotes are unaudited.

2.   Basis of Presentation

Our consolidated financial statements at December 31, 2007 and 2006 and for each of the years ended December 31, 2007, 2006 and 2005 include the accounts and operating results of the Operating Partnership, the L.L.C.s and the TRS on a consolidated basis. Such financial statements present our limited partnership interests in each of the Other Real Estate Partnerships and our minority equity interests in our joint ventures under the equity method of accounting. All intercompany transactions have been eliminated in consolidation.

3.   Summary of Significant Accounting Policies

In order to conform with generally accepted accounting principles, we are required in preparation of our financial statements to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2007 and 2006, and the reported amounts of revenues and expenses for each of the years ended December 31, 2007, 2006 and 2005. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments.

Restricted Cash

At December 31, 2007 and 2006, restricted cash includes cash held in escrow in connection with mortgage debt requirements and gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as we exchange into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.

Investment in Real Estate and Depreciation

Investment in Real Estate is carried at cost. We review our properties on a quarterly basis for impairment and provide a provision if impairments are found. To determine if an impairment may exist, we review our properties and identify those that have had either an event of change or event of circumstance warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, we estimate the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property, on an individual property basis, we will recognize an impairment loss based upon the estimated fair value of such property. For properties we consider held for sale, we cease depreciating the properties and value the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, we decide not to sell a property previously classified as held for sale, we will reclassify such property as held and used. Such property is measured at the lower of its carrying amount

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. To calculate the fair value of properties held for sale, we deduct from the estimated sales price of the property the estimated costs to close the sale. We classify properties as held for sale when our management has approved the properties for sale.

Interest costs, real estate taxes, compensation costs of development personnel and other directly related costs incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, we reclassify construction in progress to building, tenant improvement and leasing commissions. Such costs begin to be capitalized to the development projects from the point we are undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:

	Years
Buildings and Improvements		8 to 50
Land Improvements		1 to 15
Furniture, Fixtures and Equipment		5 to 10

Construction expenditures for tenant improvements, leasehold improvements and leasing commissions (inclusive of compensation costs of personnel attributable to leasing) are capitalized and amortized over the terms of each specific lease. Capitalized compensation costs of personnel attributable to leasing relate to time directly attributable to originating leases with independent third parties that result directly from and are essential to originating those leases and would not have been incurred had these leasing transactions not occurred. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.

We account for all acquisitions entered into subsequent to June 30, 2001 in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standard No. 141, “Business Combinations” (“FAS 141”). Upon acquisition of a property, we allocate the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases, above market and below market leases and tenant relationships. We allocate the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on our consolidated statements of operations.

The purchase price is further allocated to in-place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the respective tenant. The value of in-place lease intangibles and tenant relationships, which are included as components of Deferred Leasing Intangibles, Net, are amortized over the remaining lease term (and expected renewal periods of the respective lease for tenant relationships) as adjustments to depreciation and other amortization expense. If a tenant terminates its lease early, the unamortized portion of leasing commissions, tenant improvements, above and below market leases, the in-place lease value and tenant relationships is immediately written off.

59

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred Leasing Intangibles, exclusive of Deferred Leasing Intangibles held for sale, included in our total assets consist of the following:

	December 31,			December 31,
	2007			2006
In-Place Leases	$	78,332		$	73,341
Less: Accumulated Amortization		(22,048	)		(13,832	)
	$	56,284		$	59,509
Above Market Leases	$	5,069		$	5,049
Less: Accumulated Amortization		(2,023	)		(1,680	)
	$	3,046		$	3,369
Tenant Relationships	$	21,597		$	14,080
Less: Accumulated Amortization		(2,790	)		(1,000	)
	$	18,807		$	13,080
Total Deferred Leasing Intangibles, Net	$	78,137			75,958

Deferred Leasing Intangibles, exclusive of Deferred Leasing Intangibles held for sale, included in our total liabilities consist of the following:

	December 31,			December 31,
	2007			2006
Below Market Leases	$	28,316		$	22,873
Less: Accumulated Amortization		(8,163	)		(5,471	)
Total Deferred Leasing Intangibles, Net	$	20,153		$	17,402

Amortization expense related to in-place leases and tenant relationships of deferred leasing intangibles was $20,502, $14,139, and $8,761, for the years ended December 31, 2007, 2006, and 2005, respectively. Rental revenues increased by $3,814, $3,110, and $2,137 related to amortization of above/(below) market leases for the years ended December 31, 2007, 2006, and 2005, respectively. We will recognize net amortization expense related to the deferred leasing intangibles over the next five years, for properties owned as of December 31, 2007, as follows:

			Estimated Net Increase
	Estimated Net Amortization		to Rental Revenues
	of In-Place Leases and		Related to Above
	Tenant Relationships		and Below Market Leases
2008	$	13,510	$	3,457
2009		11,462		2,815
2010		9,815		2,203
2011		8,465		1,443
2012		7,028		1,012

Contractor Revenues and Expenses

During 2007 and 2006, the TRS entered into contracts with third parties to construct industrial properties and during 2007 and also acted as general contractor to construct industrial properties including properties for the 2005 Development/Repositioning Joint Venture. We use the percentage-of-completion contract method to recognize revenue. Using this method, revenues are recorded based on estimates of the percentage of completion of individual contracts. The percentage of completion estimates are based on a comparison of the

60

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

contract expenditures incurred to the estimated final costs. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

Foreign Currency Transactions and Translation

During 2007, we owned one industrial property and one land parcel located in Toronto, Canada for which the functional currency was determined to be the Canadian dollar. The assets and liabilities of this industrial property and land parcel are translated to U.S. dollars from the Canadian dollar based on the current exchange rate prevailing at each balance sheet date and any resulting translation adjustments are included in accumulated other comprehensive income (loss). The revenues and expenses of this property and land parcel are translated into U.S. dollars using the average exchange rates prevailing during the periods presented.

Deferred Financing Costs

Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $15,089 and $13,863 at December 31, 2007 and 2006, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.

Investment in and Advances to Other Real Estate Partnerships

Investment in and Advances to Other Real Estate Partnerships represents our limited partnership interests in and advances to, through the Operating Partnership, the Other Real Estate Partnerships. We account for our Investment in and Advances to Other Real Estate Partnerships under the equity method of accounting. Under the equity method of accounting, our share of earnings or losses of the Other Real Estate Partnerships is reflected in income as earned and contributions or distributions increase or decrease, respectively, our Investment in and Advances to Other Real Estate Partnerships as paid or received, respectively.

Investments in Joint Ventures

Investments in Joint Ventures represent our limited partnership interests in our joint ventures. We account for our investments in Joint Ventures under the equity method of accounting, as we do not have operational control or a majority voting interest. Under the equity method of accounting, our share of earnings or losses of our joint ventures is reflected in income as earned and contributions or distributions increase or decrease, respectively, our Investments in Joint Ventures as paid or received, respectively. Differences between our carrying value of our investments in joint ventures and our underlying equity of such joint ventures are amortized over the respective lives of the underlying assets, as applicable.

Stock Based Compensation

Effective January 1, 2006 we adopted Statement of Financial Accounting Standards No. 123R, “Share Based Payment” (“FAS 123R”), using the modified prospective application method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. For the year ended December 31, 2005, we accounted for our stock incentive plans under the recognition and measurement principles of Statement of Financial Accounting Standards No. 123, “Accounting for Stock based Compensation” for all new issuances of stock based compensation. At January 1, 2006, we did not have any unvested option awards and we had accounted for our previously issued restricted stock awards at fair value. Accordingly, the adoption of FAS 123R did not require us to recognize a cumulative effect of a change in accounting principle. We reclassified $16,825 from the Unearned Value of General Partnership’s Restricted Units caption within

61

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Partner’s Capital to General Partner Units during the year ended December 31, 2006 in accordance with the provisions of FAS 123R.

Prior to January 1, 2003, we accounted for our stock incentive plans under the recognition measurement principles of Accounting Principles Board opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of our stock on the date of grant. The following table illustrates the pro forma effect on net income and earnings per unit as if the fair value recognition provisions of FAS 123R had been applied to all outstanding and unvested option awards for the year ended December 31, 2005:

	For the
	Year Ended
	2005
Net Income Available to Unitholders — as reported	$	88,528
Add: Stock-Based Employee Compensation Expense Included in Net Income Available to Unitholders — as reported		—
Less: Total Stock-Based Employee Compensation Expense — Determined Under the Fair Value Method		(100	)
Net Income Available to Unitholders — pro forma	$	88,428
Net Income Available to Unitholders per Unit — as reported — Basic	$	1.81
Net Income Available to Unitholders per Unit — pro forma — Basic	$	1.81
Net Income Available to Unitholders per Unit — as reported — Diluted	$	1.81
Net Income Available to Unitholders per Unit — pro forma — Diluted	$	1.81

We have not issued any stock options subsequent to January 2005.

Revenue Recognition

Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by us.

Revenue is recognized on payments received from tenants for early lease terminations after we determine that all the necessary criteria have been met in accordance with FASB Statement of Financial Accounting Standards No. 13 “Accounting for Leases” (“FAS 13”).

Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.

We provide an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $837 and $783 as of December 31, 2007 and 2006, respectively. For accounts receivable we deem uncollectible, we use the direct write-off method.

Gain on Sale of Real Estate

Gain on sale of real estate is recognized using the full accrual method, when appropriate. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by us after completion of each sale are included in the determination of the gain on sales.

Income Taxes

In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss.

A provision has been made for federal income taxes in the accompanying consolidated financial statements for activities conducted in the TRS, which has been accounted for under FAS No. 109, “Accounting for Income Taxes” (“FAS 109”). In accordance with FAS 109, the total benefit/expense has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.

We are subject to certain state and local income, excise and franchise taxes. The provision for excise and franchise taxes has been reflected in general and administrative expense in the consolidated statements of operations and has not been separately stated due to its insignificance. State and local income taxes are included in the provision/benefit for income taxes which is allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.

We file income tax returns in the U.S., and various states and foreign jurisdictions. The TRS is currently under examination by the Internal Revenue Service for tax years 2004 and 2005. In general, the statutes of limitations for income tax returns remain open for the years 2004 through 2007.

Earnings Per Unit (“EPU”)

Net income per weighted average general partnership and limited partnership unit (the “Units”) — basic is based on the weighted average Units outstanding (excluding restricted units that have not yet vested). Net income per weighted average Unit — diluted is based on the weighted average Units outstanding (excluding restricted units that have not yet vested) plus the dilutive effect of the Company’s in-the-money employee stock options, restricted stock and 2011 Exchangeable Notes (hereinafter defined) that result in the issuance of general partnership units. See Note 11 for further disclosure about earnings per Unit.

Fair Value of Financial Instruments

Our financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage loans payable, unsecured line of credit and senior unsecured debt.

The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses approximates their carrying or contract values. See Note 6 for the fair values of the mortgage loans payable, unsecured line of credit and senior unsecured debt.

Derivative Financial Instruments

Historically, we have used interest rate protection agreements (the “Agreements”) to fix the interest rate on anticipated offerings of senior unsecured debt or convert floating rate debt to fixed rate debt. Receipts or payments that result from the settlement of Agreements used to fix the interest rate on anticipated offerings of senior unsecured debt are amortized over the life of the senior unsecured debt and included in interest expense. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component of interest expense. Agreements which qualify for hedge accounting are marked-to-market and any gain or loss is recognized in other comprehensive income (partners’ capital). Any agreements which no longer qualify for hedge accounting are marked-to-market and any gain or loss is

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, our exposure is limited to the current value of the interest rate differential, not the notional amount, and our carrying value of the Agreements on the balance sheet. See Note 6 for more information on the Agreements.

Discontinued Operations

On January 1, 2002, we adopted the FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property or property held for sale be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from our ongoing operations as a result of the disposal transaction and (b) we will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be reclassified and presented in discontinued operations in prior consolidated statements of operations.

Segment Reporting

Management views the Consolidated Operating Partnership as a single segment.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” which establishes a common definition of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. For financial assets and liabilities and nonfinancial assets and liabilities that are remeasured at least annually, this statement is effective for fiscal years beginning after November 15, 2007. We do not expect that the implementation of this statement will have a material effect on our consolidated financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” which permits entities to choose to measure many financial instruments and certain other items at fair value. This statement is effective for fiscal years beginning after November 15, 2007. We do not expect that the implementation of this statement will have a material effect on our consolidated financial position or results of operations.

In December 2007, the FASB issued No. 141 (revised 2007), “Business Combinations” (SFAS 141R). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. We are currently evaluating the potential impact of adoption of SFAS 141R on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements-and Amendment of ARB No. 51.” (“SFAS 160”) establishes accounting and reporting standards pertaining to ownership interests in subsidiaries held by parties other than the parent, the amount of net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. This statement also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning on

64

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

or after December 15, 2008. We do not expect that the implementation of this statement will have an effect on our consolidated financial statements.

4.   Investments in and Advances to Other Real Estate Partnerships

The investments in and advances to Other Real Estate Partnerships reflects the Operating Partnership’s limited partnership equity interests in the entities referred to in Note 1 to these financial statements.

Summarized condensed financial information as derived from the financial statements of the Other Real Estate Partnerships is presented below:

Condensed Combined Balance Sheets:

	December 31,		December 31,
	2007		2006
ASSETS
Assets:
Investment in Real Estate, Net	$	339,533	$	330,223
Other Assets, Net		83,939		59,363
Total Assets	$	423,472	$	389,586
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Other Liabilities	$	11,216	$	15,024
Partners’ Capital		412,256		374,562
Total Liabilities and Partners’ Capital	$	423,472	$	389,586

Condensed Combined Statements of Operations:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Total Revenues (including Interest Income)	$	52,631		$	46,308		$	37,237
Property Expenses		(15,583	)		(13,714	)		(11,493	)
General and Administrative		(16	)		(149	)		(123	)
Interest Expense		—			(11	)		(175	)
Amortization of Deferred Financing Costs		—			(2	)		(4	)
Depreciation and Other Amortization		(21,302	)		(18,403	)		(12,231	)
Income Tax Provision		(9	)		—			—
Income from Continuing Operations		15,721			14,029			13,211
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $7,594, $16,820, and $29,213 for the years ended December 31, 2007, 2006 and 2005		9,212			19,910			34,426
Gain (Loss) on Sale of Real Estate		1,546			(124	)		863
Net Income	$	26,479		$	33,815		$	48,500

65

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

5.   Investments in Joint Ventures and Property Management Services

On September 28, 1998, we entered into the 1998 Core Venture with an institutional investor to invest in industrial properties. At December 31, 2006, we owned a ten percent equity interest in the 1998 Core and provided property and asset management services to the 1998 Core Joint Venture. On January 31, 2007, we purchased the 90% equity interest from the institutional investor in the 1998 Core Joint Venture. We paid $18,458 in cash and assumed $30,340 in mortgage loans payable. As of December 31, 2007, we have paid off and retired the mortgage loan payable. In connection with the early repayment of the mortgage loans payable, we incurred prepayment penalties and a write-off of unamortized deferred financing fees totaling $265.

On May 16, 2003, we entered into the 2003 Net Lease Joint Venture with an institutional investor to invest in industrial properties. We own a 15% equity interest in and provide property management services to the 2003 Net Lease Joint Venture.

On March 18, 2005, we entered into the 2005 Development/Repositioning Joint Venture with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. We own a 10% equity interest in and provide property management, asset management, development management and leasing management services to the 2005 Development/Repositioning Joint Venture.

On September 7, 2005, we entered into the 2005 Core Joint Venture with an institutional investor to invest in, own and operate certain industrial properties. We own a 10% equity interest in and provide property management, asset management, development management, disposition, incentive and leasing management services to the 2005 Core Joint Venture.

On March 21, 2006, we entered into the 2006 Net Lease Co-Investment Program with an institutional investor to invest in industrial properties. We own a 15% equity interest in and provide property management, asset management and leasing management services to the 2006 Net Lease Co-Investment Program.

On July 21, 2006, we entered into the 2006 Land/Development Joint Venture with an institutional investor to invest in land and vertical development. We own a 10% equity interest in and provide property management, asset management, development management and leasing management services to the 2006 Land/Development Joint Venture.

On February 27, 2007, we redeemed the 85% equity interest in one property from the institutional investor in the 2003 Net Lease Joint Venture. In connection with the redemption, we assumed a $8,250 mortgage loan payable and $2,951 in other liabilities. The mortgage loan payable was subsequently paid off in February 2007.

During July 2007, we entered into a management arrangement with an institutional investor to provide property management, leasing, acquisition, disposition and portfolio management services for industrial properties (the “July 2007 Fund”). We do not own an equity interest in the July 2007 Fund, however we are entitled to incentive payments if certain economic thresholds related to the industrial properties are achieved.

During December 2007, we entered into the 2007 Canada Joint Venture and the 2007 Europe Joint Venture with an institutional investor to invest in, own, develop, redevelop and operate industrial properties. We own a 10% equity interest in and will provide property management, asset management, development management and leasing management services to the 2007 Canada Joint Venture and the 2007 Europe Joint Venture.

As of December 31, 2007, the 2003 Net Lease Joint Venture owned 11 industrial properties comprising approximately 5.1 million square feet of GLA, the 2005 Development/Repositioning Joint Venture owned 24 industrial properties comprising approximately 5.0 million square feet of GLA and several land parcels, the 2005 Core Joint Venture owned 66 industrial properties comprising approximately 4.8 million square feet of GLA and several land parcels, the 2006 Net Lease Co-Investment Program owned 12 industrial properties

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

comprising approximately 5.0 million square feet of GLA and the 2006 Land/Development Joint Venture owned several land parcels. As of December 31, 2007, the 2007 Canada Joint Venture and the 2007 Europe Joint Venture did not own properties.

During the year ended December 31, 2006, we sold two land parcels to the 2005 Development/Repositioning Joint Venture. During the year ended December 31, 2005, we sold seven industrial properties comprising approximately 1.5 million square feet of GLA and several land parcels to the 2005 Development/Repositioning Joint Venture. We deferred 10% of the gain from the sales, which is equal to our economic interest in the 2005 Development/Repositioning Joint Venture. On May 18, 2007, we repurchased 66 acres of the land we had sold to the 2005 Development/Repositioning Joint Venture for a purchase price of $6,379. Since we had deferred 10% of the gain on sale from the original sale in 2005, we netted the unamortized deferred gain amount, along with our 10% economic interest in the gain on sale and distributions in excess of our 10% economic interest we received from the sale against the basis of the land.

On October 15, 2007, we purchased 10 acres of land from the 2005 Development/Repositioning Joint Venture for a purchase price of $3,714. We netted our 10% economic interest in the gain on sale and distributions in excess of our 10% economic interest we received from the sale against the basis of the land.

During the year ended December 31, 2007, we earned acquisition fees from the 2006 Land/Development Joint Venture and the July 2007 Fund. During the year ended December 31, 2006, the Company earned acquisition fees from the 2003 Net Lease Joint Venture, the 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program and the July 2007 Fund. We deferred 15% of the acquisition fees earned from the 2003 Net Lease Joint Venture and the 2006 Net Lease Co-Investment Program activity and 10% of the acquisition fees earned from the 2005 Core Joint Venture and the 2006 Land/Development Joint Venture activity. The deferrals reduced our investment in the Joint Ventures and are amortized into income over the life of the underlying properties, generally 25 to 40 years.

At December 31, 2007 and 2006, we have a receivable from the Joint Ventures and the July 2007 Fund of $6,068 and $7,967, respectively, which mainly relates to development, leasing, property management and asset management fees due to us from the Joint Ventures and the July 2007 Fund and reimbursement for development expenditures made by the TRS who is acting in the capacity of the general contractor for development projects for the 2005 Development/Repositioning Joint Venture. These receivable amounts are included in prepaid expenses and other assets, net.

During the years ended December 31, 2007, 2006 and 2005, we invested the following amounts in, as well as received distributions from, our Joint Ventures and recognized fees from acquisition, disposition, leasing, development, incentive, property management and asset management services from our Joint Ventures and the July 2007 Fund in the following amounts:

	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2007		2006		2005
Contributions	$	25,482	$	29,194	$	43,311
Distributions	$	54,228	$	51,398	$	6,837
Fees	$	25,116	$	22,507	$	8,301

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The combined summarized financial information of the investments in joint ventures is as follows:

	December 31,			December 31,
	2007			2006
Condensed Combined Balance Sheets
Gross Real Estate Investment	$	1,777,964		$	1,685,969
Less: Accumulated Depreciation		(69,811	)		(72,398	)
Net Real Estate		1,708,153			1,613,571
Other Assets		163,583			224,048
Total Assets	$	1,871,736		$	1,837,619
Debt	$	1,264,769		$	1,276,001
Other Liabilities		112,268			108,430
Equity		494,699			453,188
Total Liabilities and Equity	$	1,871,736		$	1,837,619
Consolidated Operating Partnership’s share of Equity	$	56,494		$	53,151
Basis Differentials(1)		1,049			2,463
Carrying Value of the Consolidated Operating Partnership’s investments in joint ventures	$	57,543		$	55,614

(1) This amount represents the aggregate difference between our historical cost basis and the basis reflected at the joint venture level. Basis differentials are primarily comprised of gain deferrals related to properties we sold to the Joint Ventures, deferred fees and certain equity costs which are not reflected at the joint venture level.

	Year Ended December 31,
	2007		2006		2005
Condensed Combined Statements of Operations
Total Revenues	$	127,928	$	163,443	$	59,411
Expenses:
Operating and Other		43,449		55,070		16,128
Interest		63,768		61,524		20,995
Depreciation and Amortization		64,690		90,842		32,150
Total Expenses		171,907		207,436		69,273
Gain on Sale of Real Estate		108,175		94,352		10,761
Net Income		64,196		50,359		899
Consolidated Operating Partnership’s share of Net Income	$	29,958	$	30,671	$	3,698

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6.   Mortgage Loans Payable, Net, Senior Unsecured Notes, Net and Unsecured Line of Credit

The following table discloses certain information regarding our mortgage loans, senior unsecured notes and unsecured line of credit:

									Effective
	Outstanding						Interest		Interest
	Balance at						Rate At		Rate at
	December 31,			December 31,			December 31,		December 31,
	2007			2006			2007		2007		Maturity Date
Mortgage Loans Payable, Net	$	73,550		$	77,926		5.50%	- 9.25%	4.58%	- 9.25%		July 2009 - September 2024
Unamortized Premiums		(2,196	)		(2,919	)
Mortgage Loans Payable, Gross	$	71,354		$	75,007
Senior Unsecured Notes, Net
2007 Notes		—			149,998		7.600%		7.61%			05/15/07
2016 Notes		199,442			199,372		5.750%		5.91%			01/15/16
2017 Notes		99,905			99,895		7.500%		7.52%			12/01/17
2027 Notes		15,056			15,055		7.150%		7.11%			05/15/27
2028 Notes		199,838			199,831		7.600%		8.13%			07/15/28
2011 Notes		199,807			199,746		7.375%		7.39%			03/15/11
2012 Notes		199,408			199,270		6.875%		6.85%			04/15/12
2032 Notes		49,457			49,435		7.750%		7.87%			04/15/32
2009 Notes		124,937			124,893		5.250%		4.10%			06/15/09
2014 Notes		113,521			112,237		6.420%		6.54%			06/01/14
2011 Exchangeable Notes		200,000			200,000		4.625%		4.63%			09/15/11
2017 II Notes		149,620			—		5.950%		6.37%			05/15/17
Subtotal	$	1,550,991		$	1,549,732
Unamortized Discounts		14,079			15,338
Senior Unsecured Notes, Gross	$	1,565,070		$	1,565,070
Unsecured Line of Credit	$	322,129		$	207,000		5.787%		5.787%			09/28/12

Mortgage Loans Payable, Net

During 2007, in conjunction with the acquisition of several industrial properties, we assumed mortgages in the aggregate of $38,590; these mortgages were paid off and retired during 2007. As of December 31, 2007, mortgage loans payable of $73,550 are collateralized by industrial properties with a carrying value of $136,846.

Senior Unsecured Notes, Net

On May 7, 2007, we issued $150,000 of senior unsecured debt which matures on May 15, 2017 and bears interest at a rate of 5.95% (the “2017 II Notes”). The issue price of the 2017 II Notes was 99.730%. Interest is paid semi-annually in arrears on May 15 and November 15. In April 2006, we entered into interest rate protection agreements to fix the interest rate on the 2017 II Notes prior to issuance. We settled the effective portion of the interest rate protection agreements on May 1, 2007 for $4,261, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements will be amortized over the life of the 2017 II Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate projection agreements, our effective interest rate on the 2017 II Notes is 6.37%. The 2017 II Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.

On May 15, 2007, we paid off and retired our 7.60% 2007 Unsecured Notes in the amount of $150,000.

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On September 25, 2006, we issued $175,000 of senior unsecured debt which bears interest at a rate of 4.625% (the “2011 Exchangeable Notes”). We also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25,000 principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-allotment Option”). Holders of the 2011 Exchangeable Notes may exchange their notes for our common stock prior to the close of business on the second business day immediately preceding the stated maturity date at any time beginning on July 15, 2011 and also under the following circumstances: 1) during any calendar quarter beginning after December 31, 2006 (and only during such calendar quarter), if, and only if, the closing sale price per share of the Company’s common stock for at least 20 trading days ending on the last trading day of the preceding calendar quarter is more than 130% of the exchange price per share of the Company’s common stock in effect on the applicable trading day; 2) during the five consecutive trading-day period following any five consecutive trading-day period in which the trading price of the notes was less than 98% of the product of the closing sale price per share of the Company’s common stock multiplied by the applicable exchange rate; 3) if those notes have been called for redemption, at any time prior to the close of business on the second business day prior to the redemption date; 4) upon the occurrence of distributions of certain rights to purchase our common stock or certain other assets; or 5) if the Company’s common stock ceases to be listed on a U.S. national or regional securities exchange and is not quoted on the over-the-counter market as reported by Pink Sheets LLC or any similar organization, in each case, for 30 consecutive trading days. The 2011 Exchangeable Notes have an initial exchange rate of 19.6356 shares of the Company’s common stock per $1,000 principal amount, representing an exchange price of approximately $50.93 per common share and an exchange premium of approximately 20% based on the last reported sale price of $42.44 per share of the Company’s common stock on September 19, 2006. If a change of control transaction described in the indenture relating to the 2011 Exchangeable Notes occurs and a holder elects to exchange notes in connection with any such transaction, holders of the 2011 Exchangeable Notes will be entitled to a make-whole amount in the form of an increase in the exchange rate. The exchange rate may also be adjusted under certain other circumstances, including the payment of cash dividends in excess of the Company’s current regular quarterly dividend on its common stock of $0.70 per share. The 2011 Exchangeable Notes will be exchangeable for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The 2011 Exchangeable notes mature on September 15, 2011, unless previously redeemed or repurchased by us or exchanged in accordance with their terms prior to such date. Interest is paid semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2007. The 2011 Exchangeable Notes are fully and unconditionally guaranteed by the Company. On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option with respect to $25,000 in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200,000. In connection with the Operating Partnership’s offering of the 2011 Exchangeable Notes, the Operating Partnership entered into capped call transactions (the “capped call transactions”) with affiliates of two of the initial purchasers of the 2011 Exchangeable Notes (the “option counterparties”) in order to increase the effective exchange price of the 2011 Exchangeable Notes to $59.42 per share of our common stock, which represents an exchange premium of approximately 40% based on the last reported sale price of $42.44 per share of the Company’s common stock on September 19, 2006. The aggregate cost of the capped call transactions was approximately $6,835. The capped call transactions are expected to reduce the potential dilution with respect to the Company’s common stock upon exchange of the 2011 Exchangeable Notes to the extent the then market value per share of the Company’s common stock does not exceed the cap price of the capped call transaction during the observation period relating to an exchange. The cost of the capped call will be accounted for as a hedge and is included in partners’ capital because the derivative is indexed to our own stock and meets the scope exception in FAS 133. The capped call on the 2011 Exchangeable Notes requires a net share settlement.

All of our senior unsecured debt (except for the 2011 Exchangeable Notes) contains certain covenants, including limitations on incurrence of debt and debt service coverage.

70

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unsecured Line of Credit

We have maintained an unsecured revolving credit facility since 1997. On September 28, 2007, we amended and restated our unsecured revolving credit facility (the “Unsecured Line of Credit”). The Unsecured Line of Credit matures on September 28, 2012, has a borrowing capacity of $500,000 (with the right, subject to certain conditions, to increase the borrowing capacity up to $700,000) and bears interest at a floating rate of LIBOR plus 0.475%, or the prime rate, at our election. Effective October 4, 2007, we converted borrowings under the Unsecured Line of Credit to LIBOR based borrowings. At December 31, 2007, borrowings under our unsecured revolving credit facility, bore interest at a weighted average interest rate of 5.787%. Up to $100,000 of the $500,000 capacity may be borrowed in foreign currencies, including the Canadian dollar, Euro, British Sterling and Japanese Yen. The net unamortized deferred financing fees related to the prior unsecured revolving credit facility and any additional deferred financing fees incurred in entering into the Unsecured Line of Credit are being amortized over the life of the Unsecured Line of Credit, except for $128, which represents the write off of unamortized deferred financing costs associated with certain lenders who did not renew the line of credit and is included in loss from early retirement of debt. The Unsecured Line of Credit contains certain financial covenants relating to debt service coverage, market value net worth, and total funded indebtedness.

The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and unsecured line of credit, exclusive of premiums and discounts, for the next five years ending December 31 and thereafter:

	Amount
2008	$	3,111
2009		132,959
2010		15,453
2011		407,269
2012		526,488
Thereafter		873,273
Total	$	1,958,553

Fair Value

At December 31, 2007 and 2006, the fair value of our mortgage loans payable, senior unsecured notes and Unsecured Line of Credit were as follows:

	December 31, 2007				December 31, 2006
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Mortgage Loans Payable	$	73,550	$	74,867	$	77,926	$	78,730
Senior Unsecured Debt		1,550,991		1,605,048		1,549,732		1,636,318
Unsecured Line of Credit		322,129		322,129		207,000		207,000
Total	$	1,946,670	$	2,002,044	$	1,834,658	$	1,922,048

The fair value of the senior unsecured notes was determined by quoted market prices, if available. The fair values of our senior unsecured notes that were not valued by quoted market prices and the fair values of our mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the Unsecured Line of Credit was equal to its carrying value due to the variable interest rate nature of the loans.

71

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Comprehensive Income

In conjunction with certain issuances of senior unsecured notes, we entered into interest rate protection agreements to fix the interest rate on anticipated offerings of senior unsecured notes. In the next 12 months, we will amortize approximately $741 into net income by decreasing interest expense.

In April 2006, we entered into two interest rate protection agreements which fixed the interest rate on forecasted offerings of unsecured debt which we designated as cash flow hedges (the “April 2006 Agreements”). The April 2006 Agreements each had a notional value of $72,900 and were effective from November 28, 2006 through November 28, 2016. The April 2006 Agreements fixed the LIBOR rate at 5.537%. On May 1, 2007, we settled the effective portion of the April 2006 Agreements for $4,261, which is included in other comprehensive income. The settlement amount of the April 2006 Agreements will be amortized over the life of the 2017 II Notes as an adjustment to interest expense.

In July 2007, the 2006 Land/Development Joint Venture entered into two interest rate protection agreements to effectively convert floating rate debt to fixed rate debt on a portion of its line of credit. The hedge relationship is considered highly effective and for the year ended December 31, 2007, $6,499 of unrealized loss due to a change in values of the swap contracts was recognized in other comprehensive income by the 2006 Land/Development Joint Venture. We recorded $650 in unrealized loss, representing our 10% share, net of $254 of income tax provision, which is shown as mark to market of interest rate protection agreements in other comprehensive income (loss) for the twelve months ended December 31, 2007.

At December 31, 2007, we owned one industrial property and one land parcel located in Toronto, Canada for which the functional currency was determined to be the Canadian dollar. The assets and liabilities of this industrial property and land parcel are translated to U.S. dollars from the Canadian dollar based on the current exchange rate prevailing at each balance sheet date and any resulting translation adjustments are included in accumulated other comprehensive income. For the year ended December 31, 2007, we recorded $3,283 in foreign currency translation gain, net of $1,149 of income tax provision.

7.   Partners’ Capital

We have issued general partnership units and limited partnership units (together, the “Units”) and preferred general partnership units. The general partnership units resulted from capital contributions from the Company. The limited partnership units are issued in conjunction with the acquisition of certain properties (see discussion below). Subject to lock-up periods and certain adjustments, limited partnership units are convertible into common stock, $.01 par value, of the Company on a one-for-one basis or cash at the option of the Company. The preferred general partnership units result from preferred capital contributions from the Company. The preferred general partnership units had an aggregate liquidation priority of $275,000 and $325,000 as of December 31, 2007 and 2006, respectively. We are required to make all required distributions on the preferred general partnership units prior to any distribution of cash or assets to the holders of the Units. The consent of the holder of the limited partnership units is required to alter such holder’s rights as to allocations and distributions, to alter or modify such holder’s rights with respect to redemption, to cause the early termination of the Consolidated Operating Partnership, or to amend the provisions of the partnership agreement which requires such consent.

Unit Contributions

On December 9, 2005, the Company issued 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48,775 received from the December 2005 Equity Offering were contributed to us in exchange for 1,250,000 General Partner Units and are reflected in our financial statements as a general partner contribution.

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the year ended December 31, 2005, we issued 366,472 Limited Partner Units valued, in the aggregate, at $14,698 in exchange for interests in certain properties. These contributions are reflected in our financial statements as limited partner contributions.

For the year ended December 31, 2006, we issued 31,473 Limited Partner Units valued, in the aggregate, at $1,288 in exchange for interests in certain properties. These contributions are reflected in our financial statements as limited partner contributions.

For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company approximated $6,698. The gross proceeds from the option exercises were contributed to us in exchange for Units and are reflected in our financial statements as a general partner contribution.

For the year ended December 31, 2006, certain employees and directors of the Company exercised 125,780 non-qualified employee stock options. Net proceeds to the Company approximated $3,742. The gross proceeds from the option exercises were contributed to us in exchange for Units and are reflected in our financial statements as a general partner contribution.

For the year ended December 31, 2007, certain employees of the Company exercised 19,600 non-qualified employee stock options. Net proceeds to the Company approximated $613. The gross proceeds from the option exercises were contributed to us in exchange for Units and are reflected in our financial statements as a general partner contribution.

During the years ended December 31, 2007, 2006 and 2005 the Company awarded 442,008, 303,142 and 189,878 restricted shares of common stock, respectively, to certain employees of the Company and 17,139, 16,232, and 10,164, respectively, to certain directors of the Company. We issued General Partner Units to the Company in the same amount.

Treasury Stock

In March 2000 and in September 2007, the Company’s Board of Directors authorized a stock repurchase plan pursuant to which the Company is permitted to purchase up to $100,000 (the “March 2000 Program”) and $100,000, respectively, of its outstanding common stock. The Company may make purchases from time to time in the open market or in privately negotiated transactions, depending on market and business conditions. During the year ended December 31, 2007, the Company repurchased 1,797,714 shares at an average price per share of $38.62, including brokerage commissions. We purchased general partner units from the Company in the same amount. During November 2007 we completed the March 2000 Program.

73

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table is a roll-forward of the General Partnership and Limited Partnership units outstanding, including unvested restricted units, for the three years ended December 31, 2007:

	General Partnership and
	Limited Partnership
	Units Outstanding
Balance at December 31, 2004		49,290,005
Issuance of General Partner Units		1,480,942
Issuance of General Partner Restricted Units		200,042
Repurchase and Retirement of Restricted Units		(152,009	)
Issuance of Limited Partner Units		366,472
Balance at December 31, 2005		51,185,452
Issuance of General Partner Units		125,780
Issuance of General Partner Restricted Units		319,374
Repurchase and Retirement of Restricted Units		(93,007	)
Issuance of Limited Partner Units		31,473
Balance at December 31, 2006		51,569,072
Issuance of General Partner Units		19,600
Issuance of General Partner Restricted Units		459,147
Repurchase of Units		(1,797,714	)
Repurchase and Retirement of Restricted Units		(139,261	)
Balance at December 31, 2007		50,110,844

Preferred Contributions:

On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 85/8%, $.01 par value, Series C Cumulative Preferred Stock (the “Series C Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds of $47,997 received from the Series C Preferred Stock were contributed to us in exchange for 85/8% Series C Cumulative Preferred Units (the “Series C Preferred Units”) and are reflected in our financial statements as a general partner preferred unit contribution. On June 6, 2007, the Series C Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series C Preferred Stock on June 7, 2007, at a redemption price of $25.00 per Depositary Share, and paid a prorated second quarter dividend of $0.40729 per Depositary Share, totaling approximately $815. The Series C Preferred Units were redeemed on June 7, 2007 as well. Due to the redemption of the Series C Preferred Units, the initial offering costs associated with the issuance of the Series C Preferred Units of $2,017 were reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per unit for the year ended December 31, 2007.

On May 27, 2004, the Company issued 50,000 Depositary Shares, each representing 1/100^th of a share of the Company’s 6.236%, $.01 par value, Series F Flexible Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share for gross proceeds of $50,000. Net of offering costs, the Company received net proceeds of $49,075 from the issuance of the Series F Preferred Stock which were contributed to us in exchange for 6.236% Series F Cumulative Preferred Units (the “Series F Preferred Units”) and are reflected in our financial statements as a general partner preferred unit contribution. Dividends on the Series F Preferred Stock are cumulative from the date of initial

74

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

issuance and are payable semi-annually in arrears for the period from the date of original issuance through March 31, 2009 (the “Series F Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 6.236% per annum of the liquidation preference (the “Series F Initial Distribution Rate”) (equivalent to $62.36 per Depositary Share). On or after March 31, 2009, the Series F Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.375% (the initial credit spread), plus the greater of (i) the 3-month LIBOR Rate, (ii) the 10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the 30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series F Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series F Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series F Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series G Preferred Stock (hereinafter defined), Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). On or after March 31, 2009, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series F Initial Fixed Rate Period, the Series F Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series F Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.

On May 27, 2004, the Company issued 25,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.236%, $.01 par value, Series G Flexible Cumulative Redeemable Preferred Stock (the “Series G Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share for gross proceeds of $25,000. Net of offering costs, the Company received net proceeds of $24,512 from the issuance of the Series G Preferred Stock which were contributed to us in exchange for 7.236% Series G Cumulative Preferred Units (the “Series G Preferred Units”) and are reflected in our financial statements as a general partner preferred unit contribution. Dividends on the Series G Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance of the Series G Preferred Stock through March 31, 2014 (the “Series G Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 7.236% per annum of the liquidation preference (the “Series G Initial Distribution Rate”) (equivalent to $72.36 per Depositary Share). On or after March 31, 2014, the Series G Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.500% (the initial credit spread), plus the greater of (i) the 3-month LIBOR Rate, (ii) the 10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the 30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series G Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series G Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series G Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series F Preferred Stock, Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). On or after March 31, 2014, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series G Initial Fixed Rate Period, the Series G Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $25,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series G Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187,500. Net of offering costs, the Company received net proceeds of $181,484 from the issuance of Series I Preferred Stock which were contributed to us in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”). The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $353. We redeemed the Series I Preferred Units as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the difference between the redemption cost and the carrying value of the Series I Preferred Units of approximately $672 is reflected as a deduction from net income to arrive at net income available to Unitholders in determining earnings per unit for the year ended December 31, 2006.

On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds from the issuance of the Series J Preferred Stock were contributed to us in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in our financial statements as a general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series F Preferred Stock, Series G Preferred Stock and Series K Preferred Stock (hereinafter defined). The Series J Preferred Stock is not redeemable prior to January 15, 2011. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.

On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds from the issuance of the Series K Preferred Stock were contributed to the Operating Partnership in exchange for Series K Cumulative Preferred Units (the “Series K Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution. Dividends on the Series K Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series K Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series F Preferred Stock, Series G Preferred Stock and Series J Preferred Stock. The Series K Preferred Stock is not redeemable prior to August 15, 2011. On or after August 15, 2011, the Series K Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $50,000 in

76

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the aggregate, plus dividends accrued and unpaid to the redemption date. The Series K Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.

Distributions

The following table summarizes distributions declared for the past three years:

	Year Ended 2007				Year Ended 2006				Year Ended 2005
	Distribution		Total		Distribution		Total		Distribution		Total
	per Unit		Distribution		per Unit		Distribution		per Unit		Distribution
General Partner/Limited Partner Units	$	2.8500	$	146,126	$	2.8100	$	144,720	$	2.7850	$	139,168
Series C Preferred Units	$	94.6353	$	1,893	$	215.6240	$	4,313	$	215.6240	$	4,313
Series F Preferred Units	$	6,236.0000	$	3,118	$	6,236.0000	$	3,118	$	6,236.0000	$	3,118
Series G Preferred Units	$	7,236.0000	$	1,809	$	7,236.0000	$	1,809	$	7,236.0000	$	1,809
Series I Preferred Units	$	—	$	—	$	470.6667	$	353	$	1,930.2431	$	1,448
Series J Preferred Units	$	18,125.2000	$	10,875	$	17,521.0000	$	10,512	$	—	$	—
Series K Preferred Units	$	18,125.2000	$	3,625	$	6,595.6000	$	1,319	$	—	$	—

8.   Acquisition and Development of Real Estate

In 2005, we acquired 149 industrial properties comprising, in the aggregate, approximately 18.4 million square feet of GLA and several land parcels. The gross purchase price for 148 industrial properties and several land parcels totaled approximately $690,560, excluding costs incurred in conjunction with the acquisition of properties. Additionally, one industrial property was acquired through foreclosure due to a default on a mortgage loan receivable. We also substantially completed development of five properties comprising approximately 1.8 million square feet (unaudited) of GLA at a cost of approximately $97,466. We reclassed the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.

In 2006, we acquired 79 industrial properties comprising, in the aggregate, approximately 9.7 million square feet of GLA and several land parcels for a total purchase price of approximately $563,431, excluding costs incurred in conjunction with the acquisition of properties. We also substantially completed development of 15 properties comprising approximately 5.0 million square feet of GLA at a cost of approximately $188,592. We reclassed the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.

In 2007, we acquired 103 industrial properties comprising, in the aggregate, approximately 8.0 million square feet of GLA and several land parcels, including 41 industrial properties comprising approximately 1.3 million square feet of GLA in connection with the purchase of the 90% equity interest from the institutional investor of the 1998 Core Joint Venture and one industrial property comprising 0.3 million square feet of GLA in connection with the redemption of the 85% equity interest in one property from the institutional investor in the 2003 Net Lease Joint Venture (see Note 5). The purchase price of these acquisitions totaled approximately $431,490, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. We also substantially completed development of 14 properties comprising approximately 3.4 million square feet of GLA at a cost of approximately $134,050. We reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Intangible Assets Subject To Amortization in the Period of Acquisition

The fair value of in-place leases, above market leases, tenant relationships, and below market leases recorded as a result of the above acquisitions is $33,434, $3,249, $17,439, and $(12,254), respectively, for the year ended December 31, 2006. The weighted average life in months of in-place leases, above market leases, tenant relationships and below market leases recorded as a result of 2006 acquisitions was 72, 70, 109 and 117 months, respectively.

The fair value of in-place leases, above market leases, tenant relationships, and below market leases recorded as a result of the above acquisitions is $21,164, $1,000, $8,977, and ($7,327), respectively, for the year ended December 31, 2007. The weighted average life in months of in-place leases, above market leases, tenant relationships, and below market leases recorded as a result of 2007 acquisitions was 79, 99, 114, and 139 months, respectively.

9.   Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations

In 2005, we sold 82 industrial properties comprising approximately 10.7 million square feet of GLA and several land parcels. Of the 82 industrial properties sold, seven industrial property sales were made to the March 2005 Joint Venture (see Note 5). Gross proceeds from the sales of the 82 industrial properties and several land parcels were approximately $561,622. The gain on sale of real estate was approximately $131,612, of which $102,926 is shown in discontinued operations. Seventy-three of the 82 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, net of income taxes, for the 73 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate, net of income taxes, for the nine industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

In 2006, we sold 109 industrial properties comprising approximately 16.0 million square feet of GLA and several land parcels, totaling gross proceeds of $895,024. The gain on sale of real estate was approximately $202,817, of which $196,622 is shown in discontinued operations. The 109 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, net of income taxes, for the 109 sold industrial properties are included in discontinued operations. The results of operations and gain on sale of real estate, net of income taxes, for several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

In 2007, we sold 159 industrial properties comprising approximately 13.1 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 159 industrial properties and several land parcels were approximately $840,402. The gain on sale of real estate was approximately $245,247, of which $237,368 is shown in discontinued operations. One hundred fifty-six of the 159 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, net of income taxes, for the 156 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate, net of income taxes, for the three industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

At December 31, 2007, we had six industrial properties comprising approximately 0.8 million square feet of GLA and certain land parcels held for sale. In accordance with FAS 144, the results of operations of the six industrial properties held for sale at December 31, 2007 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.

78

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table discloses certain information regarding the industrial properties included in our discontinued operations for the years ended December 31, 2007, 2006 and 2005.

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Total Revenues	$	40,045		$	76,405		$	92,508
Property Expenses		(12,988	)		(24,714	)		(31,945	)
Interest Expense		—			—			(373	)
Depreciation and Amortization		(12,662	)		(28,078	)		(30,137	)
Gain on Sale of Real Estate		237,368			196,622			102,926
Provision for Income Taxes		(38,044	)		(51,102	)		(23,898	)
Income from Discontinued Operations	$	213,719		$	169,133		$	109,081

In conjunction with certain property sales, we provided seller financing. At December 31, 2007 and 2006, we had mortgage notes receivable and accrued interest outstanding of approximately $30,456 and $0, respectively, which is included as a component of prepaid expenses and other assets.

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10.   Supplemental Information to Statements of Cash Flows

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Interest paid, net of capitalized interest	$	118,909		$	114,681		$	107,397
Capitalized Interest	$	8,413		$	5,063		$	3,271
Income Taxes Paid	$	42,169		$	36,374		$	36,080
Supplemental schedule of noncash investing and financing activities:
Distribution payable on general and limited partner units	$	36,079		$	36,613		$	35,752
Distribution payable on preferred units	$	1,232		$	5,935		$	3,757
Exchange of Limited partnership units for General partnership units:
Limited partnership units	$	(2,858	)	$	(5,144	)	$	(1,951	)
General partnership units		2,858			5,144			1,951
	$	—		$	—		$	—
In conjunction with property and land acquisitions, the following assets and liabilities were assumed:
Accounts payable and accrued expenses	$	(5,987	)	$	(1,284	)	$	(4,248	)
Issuance of Operating Partnership Units	$	—		$	(1,288	)	$	(14,698	)
Mortgage debt	$	(38,590	)	$	(33,982	)	$	(11,545	)
Foreclosed property acquisition and write-off of a Mortgage loan receivable	$	—		$	—		$	3,870
Write off of fully depreciated assets	$	39,804		$	25,655		$	59,920
In conjunction with certain property sales, we provided seller financing or assigned a mortgage loan payable:
Notes receivable	$	48,282		$	11,200		$	42,543
Mortgage note payable	$	769		$	—		$	13,242

80

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

11.   Earnings Per Unit (“EPU”)

The computation of basic and diluted EPU is presented below:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Numerator:
Loss from Continuing Operations	$	(44,637	)	$	(47,239	)	$	(27,680	)
Gain on Sale of Real Estate		7,879			6,195			28,686
Less: Provision for Income Taxes Allocable to Gain on Sale of Real Estate		(3,082	)		(2,119	)		(10,871	)
Less: Preferred Unit Distributions		(21,320	)		(21,424	)		(10,688	)
Less: Redemption of Preferred Units		(2,017	)		(672	)		—
Loss from Continuing Operations Available to Unitholders, Net of Income Taxes — For Basic and Diluted EPU		(63,177	)		(65,259	)		(20,553	)
Income from Discontinued Operations		251,763			220,235			132,979
Less: Provision for Income Taxes Allocable to Discontinued Operations		(38,044	)		(51,102	)		(23,898	)
Net Income Available to Unitholders — For Basic and Diluted EPU	$	150,542		$	103,874		$	88,528
Denominator:
Weighted Average Units Outstanding — Basic and Diluted		50,597,150			50,703,004			48,968,191
Basic and Diluted EPU:
Loss from Continuing Operations Available to Unitholders, Net of Income Taxes	$	(1.25	)	$	(1.29	)	$	(0.42	)
Discontinued Operations, Net of Income Tax	$	4.22		$	3.34		$	2.23
Net Income Available to Unitholders	$	2.98		$	2.05		$	1.81

The number of weighted average units — diluted is the same as the number of weighted average units — basic for the years ended December 31, 2007, 2006 and 2005 as the dilutive effect of options and restricted units was excluded because its inclusion would have been anti-dilutive to the loss from continuing operations available to unitholders, net of income taxes. The dilutive options and restricted units excluded from the computation are 90,386 and 73,837, respectively, for the year ended December 31, 2007, 116,155 and 93,643, respectively, for the year ended December 31, 2006, and 141,625 and 82,888, respectively, for the year ended December 31, 2005.

Unvested restricted units of 909,966, 778,535, and 700,023 were outstanding as of December 31, 2007, 2006, and 2005, respectively. Unvested restricted units aggregating 470,009, 109,517, and 182,651 were anti-dilutive at December 31, 2007, 2006, and 2005, respectively, and accordingly, were excluded from dilution computations.

Additionally, options to purchase common stock of 355,901, 381,976, and 546,723 were outstanding as of December 31, 2007, 2006, and 2005, respectively.

The $200,000 of senior unsecured debt (the “2011 Exchangeable Notes”) issued during 2006, which are convertible into common shares of the Company at a price of $50.93, were not included in the computation of

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FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

diluted EPU as the Company’s average stock price did not exceed the strike price of the conversion feature (see Note 6).

12.   Income Taxes

The components of income tax expense for the TRS for the years ended December 31, 2007, 2006 and 2005 are comprised of the following:

	2007			2006			2005
Current:
Federal	$	(28,209	)	$	(39,531	)	$	(19,265	)
State		(4,934	)		(7,734	)		(4,519	)
Deferred:
Federal		3,977			3,548			4,299
State		571			695			1,009
	$	(28,595	)	$	(43,022	)	$	(18,476	)

In addition to the income tax expense recognized by the TRS, $1,952, $317 and $1,956 of state income taxes was recognized by us and is included in income tax expense on our consolidated statement of operations for the years ended December 31, 2007, 2006, and 2005.

Deferred income taxes represent the tax effect of the temporary differences between the book and tax basis of assets and liabilities. Deferred tax assets (liabilities) of the TRS include the following as of December 31, 2007, 2006 and 2005:

	2007			2006			2005
Bad debt expense	$	32		$	119		$	118
Investment in joint ventures		2,677			2,519			648
Fixed assets		8,204			7,133			4,363
Prepaid rent		215			556			461
Capitalized general and administrative expense under 263A		2,671			2,408			2,696
Deferred losses/gains		905			968			878
Mark-to-Market of interest rate protection agreements		—			—			6
Capitalized interest under 263A		613			191			184
Accrued contingency loss		289			297			—
Restricted stock		2,744			—			—
Total deferred tax assets	$	18,350		$	14,191		$	9,354
Straight-line rent		(967	)		(1,483	)		(923	)
Build to suit development		(97	)		(100	)		(66	)
Fixed assets		(130	)		—			—
Total deferred tax liabilities	$	(1,194	)	$	(1,583	)	$	(989	)
Total net deferred tax asset	$	17,156		$	12,608		$	8,365

The TRS does not have net operating loss carryforwards or tax credit carryforwards.

82

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The TRS’s components of income tax (expense) benefit for the years ended December 31, 2007, 2006 and 2005 are as follows:

	2007			2006			2005
Tax expense associated with income from operations on sold properties which is included in discontinued operations	$	(2,012	)	$	(3,591	)	$	(3,369	)
Tax expense associated with gains and losses on the sale of real estate which is included in discontinued operations		(36,032	)		(47,511	)		(20,529	)
Tax expense associated with gains and losses on the sale of real estate		(3,082	)		(2,119	)		(10,871	)
Income tax benefit		12,531			10,199			16,293
Income tax expense	$	(28,595	)	$	(43,022	)	$	(18,476	)

The income tax benefit (expense) pertaining to income from continuing operations and gain on sale of real estate for the TRS differs from the amounts computed by applying the applicable federal statutory tax rate to income as follows:

	2007			2006			2005
Tax benefit at federal rate related to continuing operations	$	8,100		$	6,725		$	3,058
State tax benefit, net of federal benefit		998			801			442
Meals and entertainment		(121	)		(24	)		(19	)
Prior year provision to return adjustments		436			484			1,886
Other		36			94			55
Net income tax benefit	$	9,449		$	8,080		$	5,422

We adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), on January 1, 2007. The adoption of FIN 48 had no affect on our financial statements as we had no unrecognized tax benefits. As of the adoption date, we had paid approximately $1,400 (representing taxes and interest) to the State of Michigan regarding business loss carryforwards for which we are currently litigating. That amount will favorably affect our effective income tax rate in future periods should we prevail.

On December 11, 2007, the Michigan Court of Claims rendered a decision against us regarding the business loss carryforwards. Also, the court ruled against us on an alternative position involving Michigan’s Capital Acquisition Deduction (CAD). We filed an appeal to the Michigan Appeals Court in January 2008. However, as a result of the lower court’s decision, $705 was accrued for both tax and financial statement purposes; therefore, there is no unrecognized tax benefit related to this issue.

We have no unrecognized tax benefits as of December 31, 2007. To the extent we have unrecognized tax benefits in the future, it will be our policy to recognize interest and penalties related to unrecognized tax benefits in income tax expense.

83

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

13.   Future Rental Revenues

Our properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under non-cancelable operating leases in effect as of December 31, 2007 are approximately as follows:

2008	$	228,188
2009		191,479
2010		149,767
2011		110,696
2012		82,378
Thereafter		283,549
Total	$	1,046,057

14.   Stock Based Compensation

We maintain three stock incentive plans, (the “Stock Incentive Plans”) which are administered by our Compensation Committee of the Board of Directors. There are approximately 10.0 million shares reserved under the Stock Incentive Plans. Only officers, certain employees, its Independent Directors and its affiliates generally are eligible to participate in the Stock Incentive Plans.

The Stock Incentive Plans authorize (i) the grant of stock options that qualify as incentive stock options under Section 422 of the Code, (ii) the grant of stock options that do not so qualify, (iii) restricted stock awards, (iv) performance share awards and (v) dividend equivalent rights. The exercise price of stock options is determined by the Compensation Committee. Special provisions apply to awards granted under the Stock Incentive Plans in the event of a change in control in the Consolidated Operating Partnership. As of December 31, 2007, stock options and restricted stock covering 1.3 million shares were outstanding and 1.8 million shares were available under the Stock Incentive Plans. At December 31, 2007 all outstanding stock options are vested. Stock option transactions are summarized as follows:

				Weighted
				Average		Exercise		Aggregate
				Exercise		Price		Intrinsic
	Shares			Price		per Share		Value
Outstanding at December 31, 2005		546,723		$	31.27	$	22.75-$33.15	$	3,954
Exercised		(125,780	)	$	30.24	$	22.75-$33.15	$	1,846
Expired or Terminated		(38,967	)	$	30.88	$	27.25-$33.13
Outstanding at December 31, 2006		381,976		$	31.65	$	25.13-$33.15	$	5,823
Exercised		(19,600	)	$	31.27	$	30.38-$33.13	$	230
Expired or Terminated		(6,475	)	$	30.85	$	27.25-$33.13
Outstanding at December 31, 2007		355,901		$	31.68	$	25.13-$33.15	$	3,669

The following table summarizes currently outstanding and exercisable options as of December 31, 2007:

	Number		Weighted		Weighted
	Outstanding		Average		Average
	and		Remaining		Exercise
Range of Exercise Price	Exercisable		Contractual Life		Price
$25.13 - $30.53		101,101		3.31		29.85
$31.05 - $33.15		255,800		2.43		32.40

84

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In September 1994, the Board of Directors approved and we adopted a 401(k)/Profit Sharing Plan. Under our 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. We may make, but are not required to make, matching contributions. For the years ended December 31, 2007, 2006 and 2005, we made matching contributions of approximately $542, $451, and $358, respectively.

For the twelve months ended December 31, 2007, 2006 and 2005, we awarded 442,008, 303,142, and 189,878 restricted stock units to our employees having a fair value at grant date of $20,882, $11,519, and $7,976, respectively. We also awarded 17,139, 16,232, and 10,164 restricted stock units to our directors having a fair value at grant date of $688, $633, and $405, respectively. Restricted stock units granted to employees generally vest over a period of three years and restricted stock units granted to directors generally vest over a period or three to ten years. For the twelve months ended December 31, 2007, 2006 and 2005, we recognized $14,150, $9,624, and $8,845 in restricted stock amortization related to restricted stock units, of which $1,707, $967, and $1,297, respectively, was capitalized in connection with development activities. At December 31, 2007, we have $23,787 in unearned compensation related to unvested restricted stock units. The weighted average period that the unrecognized compensation is expected to be incurred is 1.38 years. We have not awarded options to our employees or our directors during the twelve months ended December 31, 2007, 2006 and 2005, and therefore no stock-based employee compensation expense related to options is included in net income available to unitholders.

Restricted stock transactions for the years ended December 31, 2007 and 2006 are summarized as follows:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Outstanding at December 31, 2005		700,023		$	34.23
Issued		319,374		$	38.05
Vested		(217,168	)	$	36.57
Forfeited		(23,694	)	$	34.55
Outstanding at December 31, 2006		778,535		$	35.49
Issued		459,147		$	46.98
Vested		(272,745	)	$	37.74
Forfeited		(54,971	)	$	39.59
Outstanding at December 31, 2007		909,966		$	41.88

15.   Related Party Transactions

We periodically engage in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of one of our officers/Directors is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2007, 2006 and 2005, this relative received brokerage commissions in the amount of $240, $341 and $285, respectively.

At December 31, 2007 we have a payable balance of $45,901 to wholly owned entities of the Company. At December 31, 2006 we had a payable balance of $17,468 to wholly owned entities of the Company. At December 31, 2005, we had a receivable balance of $12,166 from wholly owned entities of the Company.

85

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

16.   Commitments and Contingencies

In the normal course of business, we are involved in legal actions arising from the ownership of its properties. In our opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on our consolidated financial position, operations or liquidity.

Five properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price in excess of our depreciated cost of the asset. We have no notice of any exercise of any tenant purchase option.

We have committed to the construction of certain development projects totaling approximately 2.1 million square feet of GLA. The estimated total construction costs are approximately $114,005. Of this amount, approximately $64,641 remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated completion cost stated above.

At December 31, 2007, we had 23 letters of credit outstanding in the aggregate amount of $9,582. These letters of credit expire between February, 2008 and January, 2010.

Ground and Operating Lease Agreements

For the years ended December 31, 2007, 2006 and 2005, we recognized $3,102, $2,737 and $2,275 in operating and ground lease expense.

Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which we are the lessee, as of December 31, 2007, are as follows:

2008	$	3,339
2009		3,077
2010		2,744
2011		2,534
2012		2,158
Thereafter		38,912
Total	$	52,764

17.   Subsequent Events

On January 22, 2008, we paid a fourth quarter 2007 distribution of $0.72 per Unit, totaling approximately $36,079.

From January 1, 2008 to February 15, 2008, the Company awarded 2,168 shares of restricted common stock to certain Directors. We issued General Partner Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $67 on the date of grant. The restricted common stock and units vest over five years. Compensation expense will be charged to earnings over the respective vesting period.

From January 1, 2008 to February 15, 2008, we acquired 11 industrial properties and several land parcels for a total estimated investment of approximately $79,073. We also sold three industrial properties and one land parcel for approximately $3,592 of gross proceeds during this period.

In January 2008, we entered into two interest rate protection agreements which fixed the interest rate on forecasted offerings of unsecured debt which we designated as cash flow hedges (the “January 2008 Agreements”). The January 2008 Agreements each have a notional value of $59,750 and are effective from May 15, 2009 through May 15, 2014. The January 2008 Agreements fix the LIBOR rate at 4.0725% and 4.0770%, respectively.

86

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18.   Quarterly Financial Information (unaudited)

The following table summarizes our quarterly financial information. The first, second and third fiscal quarters of 2007 and all fiscal quarters in 2006 have been reclassified in accordance with FAS 144.

	Year Ended December 31, 2007
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
Total Revenues	$	94,665		$	94,198		$	92,560		$	101,039
Equity in Income of Joint Ventures		5,631			11,626			6,290			6,411
Equity in Income of Other Real Estate Partnerships		5,520			4,374			5,275			11,080
Loss from Continuing Operations, Net of Income Tax		(12,388	)		(10,777	)		(12,786	)		(8,686	)
Income from Discontinued Operations, Net of Income Tax		50,333			51,934			51,140			60,312
Gain on Sale of Real Estate, Net of Income Tax		1,261			503			64			2,969
Net Income		39,206			41,660			38,418			54,595
Preferred Unit Distributions		(5,935	)		(5,671	)		(4,857	)		(4,857	)
Redemption of Preferred Units		—			(2,017	)		—			—
Net Income Available to Unitholders	$	33,271		$	33,972		$	33,561		$	49,738
Basic and Diluted Earnings Per Unit:
Loss From Continuing Operations Available to Unitholders	$	(0.33	)	$	(0.35	)	$	(0.35	)	$	(0.22	)
Income From Discontinued Operations	$	0.99		$	1.02		$	1.01		$	1.20
Net Income Available to Unitholders	$	0.65		$	0.67		$	0.66		$	1.00
Weighted Average Units Outstanding		50,966			50,985			50,735			49,715

87

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Year Ended December 31, 2006
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
Total Revenues	$	69,378		$	73,065		$	73,881		$	88,901
Equity in (Loss) Income of Joint Ventures		(35	)		7,307			4,747			18,652
Equity in Income Other Real Estate Partnerships		4,888			17,950			4,507			6,186
Loss from Continuing Operations, Net of Income Tax		(18,688	)		(1,669	)		(20,188	)		(6,694	)
Income from Discontinued Operations, Net of Income Tax		43,505			36,662			51,542			37,424
Gain (Loss) on Sale of Real Estate, Net of Income Tax		982			1,475			1,728			(109	)
Net Income		25,799			36,468			33,082			30,621
Preferred Unit Distributions		(5,019	)		(5,029	)		(5,442	)		(5,934	)
Redemption of Preferred Units		(672	)		—			—			—
Net Income Available to Unitholders	$	20,108		$	31,439		$	27,640		$	24,687
Basic and Diluted Earnings Per Unit:
Loss From Continuing Operations Available to Unitholders	$	(0.46	)	$	(0.10	)	$	(0.47	)	$	(0.26	)
Income From Discontinued Operations	$	0.86		$	0.72		$	1.02		$	0.74
Net Income Available to Unitholders	$	0.40		$	0.62		$	0.54		$	0.49
Weighted Average Units Outstanding		50,644			50,706			50,721			50,739

19.   Pro Forma Financial Information (unaudited)

The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2007 and 2006 (the “Pro Forma Statements”) are presented as if the acquisition of 54 operating industrial properties between January 1, 2007 and December 31, 2007 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2007 and December 31, 2007 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2007. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2007 as of January 1, 2007 and 2006.

The Pro Forma Statements are not necessarily indicative of what our results of operations would have been for the years ended December 31, 2007 and 2006, nor do they purport to present our future results of operations.

88

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pro Forma Condensed Statements of Operations

	Year Ended			Year Ended
	December 31,			December 31,
	2007			2006
Pro Forma Revenues	$	389,402		$	323,514
Pro Forma Loss from Continuing Operations Available to Unitholders, Net of Income Taxes	$	(44,520	)	$	(37,691	)
Pro Forma Net Income Available to Unitholders	$	169,199		$	131,442
Per Unit Data:
Pro Forma Basic and Diluted Earnings Per Unit Data:
Loss from Continuing Operations Available to Unitholders	$	(0.88	)	$	(0.74	)
Net Income Available to Unitholders	$	3.34		$	2.59

The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2006 and 2005 (the “Pro Forma Statements”) are presented as if the acquisition of 45 operating industrial properties between January 1, 2006 and December 31, 2006 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2006 and December 31, 2006 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2006. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2006 as of January 1, 2006 and 2005.

The Pro Forma Statements are not necessarily indicative of what our results of operations would have been for the years ended December 31, 2006 and 2005, nor do they purport to present our future results of operations.

Pro Forma Condensed Statements of Operations

	Year Ended			Year Ended
	December 31,			December 31,
	2006			2005
Pro Forma Revenues	$	357,797		$	312,202
Pro Forma Loss from Continuing Operations Available to Unitholders, Net of Income Taxes	$	(46,980	)	$	(48,206	)
Pro Forma Net Income Available to Unitholders	$	110,064		$	96,696
Per Unit Data:
Pro Forma Basic and Diluted Earnings Per Unit Data:
Loss from Continuing Operations Available to Unitholders	$	(0.93	)	$	(0.98	)
Net Income Available to Unitholders	$	2.17		$	1.97

89

Report of Independent Registered Public Accounting Firm

To the Partners of

the Other Real Estate Partnerships:

In our opinion, the accompanying combined balance sheets and the related combined statements of operations, of changes in partners’ capital and of cash flows present fairly, in all material respects, the financial position of the Other Real Estate Partnerships at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Other Real Estate Partnerships’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/  PricewaterhouseCoopers LLP

Chicago, Illinois

February 25, 2008

90

OTHER REAL ESTATE PARTNERSHIPS

COMBINED BALANCE SHEETS

	December 31,			December 31,
	2007			2006
	(Dollars in thousands)
ASSETS
Assets:
Investment in Real Estate:
Land	$	70,749		$	60,401
Buildings and Improvements		341,602			328,297
Construction in Progress		650			4,445
Less: Accumulated Depreciation		(73,468	)		(62,920	)
Net Investment in Real Estate		339,533			330,223
Cash and Cash Equivalents		1,165			973
Restricted Cash		12			—
Tenant Accounts Receivable, Net		1,839			1,444
Deferred Rent Receivable		4,667			4,118
Deferred Leasing Intangibles, Net		8,882			10,306
Prepaid Expenses and Other Assets, Net		67,374			42,522
Total Assets	$	423,472		$	389,586
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Accounts Payable and Accrued Expenses	$	4,438		$	8,193
Deferred Leasing Intangibles, Net		1,887			2,084
Rents Received in Advance and Security Deposits		4,891			4,747
Total Liabilities		11,216			15,024
Commitments and Contingencies		—			—
Partners’ Capital		412,256			374,562
Total Liabilities and Partners’ Capital	$	423,472		$	389,586

The accompanying notes are an integral part of the financial statements.

91

OTHER REAL ESTATE PARTNERSHIPS

COMBINED STATEMENTS OF OPERATIONS

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
	(Dollars in thousands)
Revenues:
Rental Income	$	41,431		$	36,443		$	28,889
Tenant Recoveries and Other Income		11,121			9,255			8,006
Total Revenues		52,552			45,698			36,895
Expenses:
Property Expenses	$	15,583		$	13,714		$	11,493
General and Administrative		16			149			123
Depreciation and Other Amortization		21,302			18,403			12,231
Total Expenses		36,901			32,266			23,847
Other Income/Expense:
Interest Income		79			610			342
Interest Expense		—			(11	)		(175	)
Amortization of Deferred Financing Costs		—			(2	)		(4	)
Total Other Income/Expense		79			597			163
Income Tax Provision		(9	)		—			—
Income from Continuing Operations		15,721			14,029			13,211
Income from Discontinued Operations
(Including Gain on Sale of Real Estate of $7,594, $16,820 and $29,213 for the Years Ended December 31, 2007, 2006, and 2005)		9,212			19,910			34,426
Income Before Gain on Sale of Real Estate		24,933			33,939			47,637
Gain (Loss) on Sale of Real Estate		1,546			(124	)		863
Net Income	$	26,479		$	33,815		$	48,500

The accompanying notes are an integral part of the financial statements.

92

OTHER REAL ESTATE PARTNERSHIPS

COMBINED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

	Total
	(Dollars in thousands)
Balance at December 31, 2004	$	342,916
Contributions		123,344
Distributions		(132,753	)
Net Income		48,500
Balance at December 31, 2005	$	382,007
Contributions		43,516
Distributions		(84,776	)
Net Income		33,815
Balance at December 31, 2006	$	374,562
Contributions		66,584
Distributions		(55,369	)
Net Income		26,479
Balance at December 31, 2007	$	412,256

The accompanying notes are an integral part of the financial statements.

93

OTHER REAL ESTATE PARTNERSHIPS

COMBINED STATEMENTS OF CASH FLOWS

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	26,479		$	33,815		$	48,500
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation		15,956			13,995			12,749
Amortization of Deferred Financing Costs		—			2			4
Other Amortization		6,230			5,502			2,697
Gain on Sale of Real Estate		(9,140	)		(16,696	)		(30,076	)
Equity in Net Income of Joint Ventures		—			—			—
Provision for Bad Debt		400			383			128
Change in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net		(26,037	)		(7,899	)		(20,007	)
Change in Deferred Rent Receivable		(900	)		(1,062	)		(1,974	)
Change in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits		395			(1,886	)		2,838
Increase in Restricted Cash		(12	)		—			—
Net Cash Provided by Operating Activities		13,371			26,154			14,859
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of and Additions to Investment in Real Estate		(63,765	)		(71,134	)		(74,734	)
Net Proceeds from Sales of Investment in Real Estate		39,371			49,758			81,249
Repayment and Sale of Mortgage Loans Receivable		—			23,787			25,185
Funding of Mortgage Loan Receivable		—			—			(22,936	)
Decrease (Increase) in Restricted Cash		—			14,636			(14,636	)
Net Cash (Used in) Provided by Investing Activities		(24,394	)		17,047			(5,872	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions		66,584			43,516			123,344
Distributions		(55,369	)		(84,776	)		(132,753	)
Repayments on Mortgage Loans Payable		—			(2,356	)		(37	)
Net Cash Provided by (Used in) Financing Activities		11,215			(43,616	)		(9,446	)
Net Increase (Decrease) in Cash and Cash Equivalents		192			(415	)		(459	)
Cash and Cash Equivalents, Beginning of Period		973			1,388			1,847
Cash and Cash Equivalents, End of Period	$	1,165		$	973		$	1,388

The accompanying notes are an integral part of the financial statements.

94

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)

1.   Organization and Formation of Partnerships

First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 87.1% and 87.3% partnership interest at December 31, 2007 and 2006, respectively. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 12.9% and 12.7% interest in the Operating Partnership at December 31, 2007 and 2006, respectively.

The Operating Partnership owns at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P., First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P., First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., TK-SV, LTD. and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”).

The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.

On a combined basis, as of December 31, 2007, the Other Real Estate Partnerships owned 98 industrial properties, containing an aggregate of approximately 9.5 million square feet of GLA.

Profits, losses and distributions of the Other Real Estate Partnerships are allocated to the general partner and the limited partners in accordance with the provisions contained within each restated and amended partnership agreement.

2.   Basis of Presentation

The combined financial statements of the Other Real Estate Partnerships at December 31, 2007 and 2006 and for each of the years ended December 31, 2007, 2006 and 2005 include the accounts and operating results of the Other Real Estate Partnerships on a combined basis.

3.   Summary of Significant Accounting Policies

In order to conform with generally accepted accounting principles, management, in preparation of the Other Real Estate Partnerships’ financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2007 and 2006, and the reported amounts of revenues and expenses for each of the years ended December 31, 2007, 2006 and 2005. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments.

Restricted Cash

Restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Other Real Estate Partnerships exchange into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.

95

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

Investment in Real Estate and Depreciation

Investment in Real Estate is carried at cost. The Other Real Estate Partnerships reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Other Real Estate Partnerships reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Other Real Estate Partnerships estimate the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property, on an individual property basis, the Other Real Estate Partnerships will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Other Real Estate Partnerships ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and as a result, the Other Real Estate Partnerships decide not to sell a property previously classified as held for sale, the Other Real Estate Partnerships will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Other Real Estate Partnerships determine fair value of properties that are held for use by discounting the future expected cash flows of the properties. To calculate the fair value of properties held for sale, the Other Real Estate Partnerships deduct from the estimated sales price of the property the estimated costs to close the sale.

Interest costs, real estate taxes, compensation costs of development personnel and other directly related expenses incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Other Real Estate Partnerships reclassify construction in progress to building, tenant improvement and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Other Real Estate Partnerships are undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:

	Years
Buildings and Improvements		8 to 50
Land Improvements		1 to 15
Furniture, Fixtures and Equipment		5 to 10

Construction expenditures for tenant improvements, leasehold improvements and leasing commissions (inclusive of compensation costs of personnel attributable to leasing) are capitalized and amortized over the terms of each specific lease. Capitalized compensation costs of personnel attributable to leasing relate to time directly attributable to originating leases with independent third parties that result directly from and are essential to originating those leases and would not have been incurred had these leasing transactions not occurred. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.

The Other Real Estate Partnerships account for all acquisitions entered into subsequent to June 30, 2001 in accordance with FAS 141. Upon acquisition of a property, the Other Real Estate Partnerships allocate the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases, above market and below market leases and tenant relationships. The Other Real Estate Partnerships allocate the purchase price to the fair value of the tangible assets of an acquired property determined by valuing the

96

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.

The purchase price is further allocated to in-place lease values and tenant relationships based on management’s evaluation of the specific characteristics of each tenant’s lease and the Other Real Estate Partnership’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Other Real Estate Partnerships’ combined statements of operations. The value of in-place lease intangibles and tenant relationships which are included as components of Deferred Leasing Intangibles included in total assets, are amortized over the remaining lease term (and expected renewal periods in the respective lease for tenant relationships) as adjustments to depreciation and other amortization expense and is included in other assets. If a tenant terminates its lease early, the unamortized portion of leasing commissions, tenant improvements, above and below market leases, the in-place lease value and tenant relationships is immediately charged to expense.

Deferred Leasing Intangibles included in total assets consist of the following:

	December 31,			December 31,
	2007			2006
In-Place Leases	$	8,065		$	8,081
Less: Accumulated Amortization		(2,812	)		(1,530	)
	$	5,253		$	6,551
Above Market Leases	$	1,371		$	1,884
Less: Accumulated Amortization		(496	)		(497	)
	$	875		$	1,387
Tenant Relationships	$	3,374		$	2,577
Less: Accumulated Amortization		(620	)		(209	)
	$	2,754		$	2,368
Total Deferred Leasing Intangibles, Net	$	8,882		$	10,306

Deferred Leasing Intangibles included in total liabilities consist of the following:

	December 31,			December 31,
	2007			2006
Below Market Leases	$	3,351		$	2,862
Less: Accumulated Amortization		(1,464	)		(778	)
Total Deferred Leasing Intangibles, Net	$	1,887		$	2,084

Amortization expense related to in-place leases and tenant relationships of deferred leasing intangibles was $3,411, $3,264 and $399 for the years ended December 31, 2007, 2006, and 2005 respectively. Rental revenues increased by $451, $546, and $290 related to amortization of above/(below) market leases for the years ended December 31, 2007, 2006, and 2005, respectively. The Other Real Estate Partnerships will

97

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

recognize net amortization expense related to the deferred leasing intangibles over the next five years as follows:

			Estimated Net Increase
	Estimated Net Amortization		to Rental Revenues
	of In-Place Leases and		Related to Above
	Tenant Relationships		and Below Market Leases
2008	$	1,600	$	491
2009		1,367		345
2010		1,231		170
2011		1,127		37
2012		914		65

Deferred Financing Costs

Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. At December 31, 2007 and December 31, 2006, there were no deferred financing costs. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.

Revenue Recognition

Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenues in the same period the related expenses are incurred by the Other Real Estate Partnerships.

Revenue is recognized on payments received from tenants for early lease terminations after the Other Real Estate Partnerships determine that all the necessary criteria have been met in accordance with FAS 13 “Accounting for Leases”.

Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected. At December 31, 2007 and December 31, 2006, there were no outstanding mortgage loans receivable.

The Other Real Estate Partnerships provide an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the combined balance sheets are shown net of an allowance for doubtful accounts of $0 as of December 31, 2007 and 2006. For accounts receivable the Other Real Estate Partnerships deem uncollectible, the Other Real Estate Partnerships uses the direct write-off method.

Gain on Sale of Real Estate

Gain on sale of real estate is recognized using the full accrual method. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Other Real Estate Partnerships after completion of each sale are included in the determination of the gain on sales.

98

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

Income Taxes

In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss. The Other Real Estate Partnerships are subject to certain state and local income, excise and franchise taxes. The provision for excise and franchise tables has been reflected in general and administrative expense in the combined statement of operations and has not been separately stated due to its insignificance. State and local income taxes are included in the provision/benefit for income taxes which is allocated to income from continuing operations.

Fair Value of Financial Instruments

The Other Real Estate Partnerships’ financial instruments include short-term investments, tenant accounts receivable, net, accounts payable and other accrued expenses. The fair values of the short-term investments, tenant accounts receivable, net, accounts payable and other accrued expenses were not materially different from their carrying or contract values.

Discontinued Operations

On January 1, 2002, the Other Real Estate Partnerships adopted FAS 144. FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property sold be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Other Real Estate Partnerships as a result of the disposal transaction and (b) the Other Real Estate Partnerships will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be restated and presented in discontinued operations in prior combined statements of operations.

4.   Acquisition and Development of Real Estate

In 2005, the Other Real Estate Partnerships acquired 12 industrial properties comprising approximately 1.7 million square feet of GLA and several land parcels for a total purchase price of approximately $62,114, excluding costs incurred in conjunction with the acquisition of the properties.

In 2006, the Other Real Estate Partnerships acquired 12 industrial properties comprising approximately 0.8 million square feet of GLA and several land parcels for a total purchase price of approximately $47,314, excluding costs incurred in conjunction with the acquisition of the properties.

In 2007, the Other Real Estate Partnerships acquired two industrial properties comprising approximately 0.6 million square feet of GLA and several land parcels for a total purchase price of approximately $39,294, excluding costs incurred in conjunction with the acquisition of the properties. The Other Real Estate Partnerships also substantially completed development of one property comprising 0.3 million square feet of GLA at a cost of approximately $10,740. The Other Real Estate Partnerships reclassed the costs of the substantially completed development from construction in progress to building, tenant improvements and leasing commissions.

Intangible Assets Subject to Amortization in the Period of Acquisition

The fair value of in-place leases, tenant relationships, and below market leases recorded as a result of the above acquisitions was $1,874, $1,030 and $(781), respectively for the year ended December 31, 2007. The weighted average life in months of in-place leases, tenant relationships and below market leases recorded as a result of 2007 acquisitions was 50, 110 and 67 months, respectively.

99

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

The fair value of in-place leases, above market leases, tenant relationships, and below market leases recorded as a result of the above acquisitions was $2,836, $582, $2,897, and $(894), respectively for the year ended December 31, 2006. The weighted average life in months of in-place leases, above market leases, tenant relationships, and below market leases recorded as a result of 2006 acquisitions was 79, 78, 81 and 17 months, respectively.

5.  Sale of Real Estate and Discontinued Operations

In 2005, the Other Real Estate Partnerships sold 14 industrial properties comprising approximately 2.1 million square feet of GLA. Of the 14 industrial properties sold, one industrial property sale was made to a joint venture in which we own a 10% equity interest. Gross proceeds from the sales of the 14 industrial properties totaled approximately $94,472. The gain on sale of real estate was approximately $30,076, of which $29,213 is shown in discontinued operations. One of the 14 sold industrial properties did not meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 13 sold industrial properties that met the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the industrial property and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

In 2006, the Other Real Estate Partnerships sold 16 industrial properties comprising approximately 1.1 million square feet of GLA, totaling gross proceeds of approximately $51,776. The gain on sale of real estate was approximately $16,696, of which $16,820 is shown in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 16 sold industrial properties are included in discontinued operations. The results of operations and gain on sale of real estate for the several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

In 2007, the Other Real Estate Partnerships sold five industrial properties comprising approximately 0.6 million square feet of GLA and one parcel of land. Gross proceeds from the sales of the five industrial properties and several land parcels totaled approximately $40,876. The gain on sale of real estate was approximately $9,140, of which $7,594 is shown in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the five sold industrial properties that met the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the industrial property and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

The following table discloses certain information regarding the industrial properties included in discontinued operations by the Other Real Estate Partnerships for the years ended December 31, 2007, 2006 and 2005.

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Total Revenues	$	3,924		$	6,156		$	12,090
Property Expenses		(1,118	)		(1,431	)		(3,503	)
Depreciation and Amortization		(1,188	)		(1,635	)		(3,374	)
Gain on Sale of Real Estate		7,594			16,820			29,213
Income from Discontinued Operations	$	9,212		$	19,910		$	34,426

100

OTHER REAL ESTATE PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

6.   Supplemental Information to Statements of Cash Flows

Supplemental disclosure of cash flow information:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Interest paid, net of capitalized interest	$	—		$	28		$	175
Capitalized Interest	$	—		$	96		$	—
Write-off of fully depreciated assets	$	5,227		$	4,941		$	7,894
In conjunction with property and land acquisitions:
Accounts payable and accrued expenses	$	(108	)	$	(644	)	$	(487	)

In conjunction with certain property sales, the Other Real Estate Partnerships provided seller financing on behalf of certain buyers:

	2007		2006		2005
Notes Receivable	$	—	$	—	$	11,265

7.   Future Rental Revenues

The Other Real Estate Partnerships’ properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under noncancelable operating leases in effect as of December 31, 2007 are approximately as follows:

2008	$	38,697
2009		32,240
2010		25,049
2011		17,306
2012		11,412
Thereafter		19,532
Total	$	144,236

8.   Related Party Transactions

At December 31, 2007 and 2006 the Other Real Estate Partnerships have a receivable balance of $58,304 and $32,633, respectively, from wholly owned entities of the Company and the Operating Partnership.

9.   Commitments and Contingencies

In the normal course of business, the Other Real Estate Partnerships are involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the combined financial position, operations or liquidity of the Other Real Estate Partnerships.

Two properties have a lease granting the tenant an option to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price generally in excess of the Other Real Estate Partnerships’ depreciated cost of the asset. The Other Real Estate Partnerships have no notice of any exercise of these tenant purchase options.

101

FIRSTCAL INDUSTRIAL, LLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		103
Consolidated Statements of Financial Position of FirstCal Industrial, L.L.C. as of December 31, 2007 and 2006 (not covered by the report included herein)		104
Consolidated Statements of Operations of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005		105
Consolidated Statements of Changes in Members’ Capital of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005		106
Consolidated Statements of Cash Flows of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005		107
Notes to Consolidated Financial Statements		108

102

Report of Independent Registered Accounting Firm

To the Members of
FirstCal Industrial, LLC:

In our opinion, the accompanying consolidated statements of operations, changes in members’ capital and cash flows present fairly, in all material respects, the results of operations and cash flows of FirstCal Industrial, LLC and its subsidiaries (the “Joint Venture”) for the period from March 18, 2005 (inception) though December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Joint Venture’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of operations, changes in members’ capital and cash flows are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements of operations, changes in members’ capital and cash flows, assessing the accounting principles used and significant estimates made by management, and evaluating the overall presentation of the statements of operations, changes in members’ capital and cash flows. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

May 16, 2006, except with respect to our opinion on the consolidated statement of operations insofar as it relates to the effects of discontinued operations discussed in Note 5, as to which the date is February 25, 2008.

103

FIRSTCAL INDUSTRIAL, LLC

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	December 31,			December 31,
	2007			2006
	(Not covered by the			(Not covered by the
	report included herein)			report included herein)
	($ in 000’s)
ASSETS
Assets:
Investment in Real Estate:
Land and Land Improvements	$	440,136		$	257,758
Buildings and Improvements		146,282			142,403
Furniture and Fixtures		106			—
Construction in Progress		83,558			46,776
Gross Real Estate Investment		670,082			446,937
Less: Accumulated Depreciation		(6,420	)		(6,416	)
Net Investment in Real Estate		663,662			440,521
Real Estate Held for Sale, net of Accumulated Depreciation and Amortization of $2,658 and $717 at December 31, 2007 and December 31, 2006, respectively		57,509			9,411
Cash and Cash Equivalents		13,234			3,018
Restricted Cash		4,238			3,571
Tenant Accounts Receivable, Net		156			384
Deferred Rent Receivable		3,981			923
Deferred Financing Costs, Net		1,943			748
Prepaid Expenses and Other Assets, Net		7,904			15,159
Total Assets	$	752,627		$	473,735
LIABILITIES AND MEMBERS’ CAPITAL
Liabilities:
Unsecured Line of Credit	$	211,015		$	305,643
Related Party Notes		277,500			—
Accounts Payable and Accrued Expenses		29,111			18,469
Rents Received in Advance and Security Deposits		1,880			1,344
Other Liabilities, Net		1,138			1,604
Total Liabilities		520,644			327,060
Commitments and Contingencies		—			—
Members’ Capital		231,983			146,675
Total Liabilities and Members’ Capital	$	752,627		$	473,735

The accompanying notes are an integral part of the consolidated financial statements.

104

FIRSTCAL INDUSTRIAL, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended			Year Ended			Period from
	December 31,			December 31,			March 18,
	2007			2006			2005
	(Not covered			(Not covered			(inception) through
	by the report			by the report			December 31,
	included herein)			included herein)			2005
	($ in 000’s)
Revenues:
Rental Income	$	7,312		$	4,192		$	427
Tenant Recoveries and Other Income		2,142			925			94
Total Revenues		9,454			5,117			521
Expenses:
Real Estate Tax		3,544			1,386			258
Repairs and Maintenance		771			261			49
Property Management		134			124			15
Utilities		452			272			21
Insurance		317			67			5
Other		1,208			354			20
General and Administrative		1,305			1,143			246
Depreciation and Other Amortization		5,584			5,837			383
Total Expenses		13,315			9,444			997
Other Income (Expense):
Interest Income		642			283			10
Interest Expense		(19,108	)		(12,530	)		(3,941	)
Amortization of Deferred Financing Costs		(316	)		(576	)		(221	)
Total Other Income (Expense)		(18,782	)		(12,823	)		(4,152	)
Loss from Continuing Operations	$	(22,643	)	$	(17,150	)		(4,628	)
Income (Loss) from Discontinued Operations (Including Gain on Sale of Real Estate of $35,765, $34,669 and $0 for the years ended December 31, 2007, December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively)		35,160			32,971			(2,096	)
Income Before Gain on Sale of Real Estate	$	12,517		$	15,821		$	(6,724	)
Gain on Sale of Real Estate		19,411			27,535			9,434
Net Income	$	31,928		$	43,356			2,710

The accompanying notes are an integral part of the consolidated financial statements.

105

FIRSTCAL INDUSTRIAL, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 (NOT COVERED BY

THE REPORT INCLUDED HEREIN) AND FOR THE PERIOD FROM MARCH 18, 2005

(INCEPTION) THROUGH DECEMBER 31, 2005

	Total			CSJV FirstCal, LLC			FR FirstCal, LLC
				($ in 000’s)
Balance at March 18, 2005 (Inception)	$	—		$	—		$	—
Cash Contributions		126,656			113,990			12,666
Cash Distributions		(26,046	)		(19,966	)		(6,080	)
Net Income		2,711			(1,035	)		3,746
Balance at December 31, 2005	$	103,321		$	92,989		$	10,332
Cash Contributions		136,677			123,009			13,668
Cash Distributions		(136,679	)		(106,302	)		(30,377	)
Net Income		43,356			22,311			21,045
Balance at December 31, 2006	$	146,675		$	132,007		$	14,668
Cash Contributions		167,812			151,031			16,781
Cash Distributions		(114,432	)		(87,408	)		(27,024	)
Net Income		31,928			13,080			18,848
Balance at December 31, 2007	$	231,983		$	208,710		$	23,273

The accompanying notes are an integral part of the consolidated financial statements.

106

FIRSTCAL INDUSTRIAL, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended			Year Ended			Period from
	December 31,			December 31,			March 18,
	2007			2006			2005
	(Not covered			(Not covered			(inception) through
	by the report			by the report			December 31,
	included herein)			included herein)			2005
	($ in 000’s)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	31,928		$	43,356		$	2,711
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities:
Gain on Sale of Real Estate		(55,176	)		(62,204	)		(9,434	)
Depreciation and Amortization		10,473			14,741			6,735
Deferred Financing Cost Amortization		316			576			221
Provision for Bad Debt		(136	)		153			16
Decrease (Increase) in Tenant Accounts Receivable and Prepaid Expenses and Other Assets		(9	)		(717	)		(1,370	)
Increase in Deferred Rent Receivable		(4,183	)		(1,075	)		(1,074	)
Increase in Accounts Payable and Accrued Expenses, Rents Received in Advance and Security Deposits and Other Liabilities		9,082			1,214			1,790
Net Cash Used in Operating Activities		(7,705	)		(3,956	)		(405	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of and Additions to Investment in Real Estate		(449,374	)		(374,400	)		(322,003	)
Net Proceeds from Sales of Investments in Real Estate		233,221			275,338			27,309
Increase in Restricted Cash		(599	)		(2,293	)		—
Net Cash Used in Investing Activities		(216,752	)		(101,355	)		(294,694	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Unsecured Lines of Credit		283,138			442,608			188,938
Repayments on Unsecured Lines of Credit		(377,766	)		(314,588	)		(11,315	)
Proceeds / (Repayments of) from Related Party Note		277,500			(30,964	)		30,964
Cost of Debt Issuance		(1,511	)		(594	)		(951	)
Increase in Restricted Cash		(68	)		(1,278	)		—
Contributions from Members		167,812			136,677			126,656
Distributions to Members		(114,432	)		(136,679	)		(26,046	)
Net Cash Provided by Financing Activities		234,673			95,182			308,246
Net Increase / (Decrease) in Cash and Cash Equivalents		10,216			(10,129	)		13,147
Cash and Cash Equivalents, Beginning of Period		3,018			13,147			—
Cash and Cash Equivalents, End of Period	$	13,234		$	3,018		$	13,147
Supplemental Information:
Interest Paid, Net of Capitalized Interest	$	18,548		$	11,666		$	3,470
Capitalized Interest	$	3,397		$	1,480		$	292
Accounts Receivable Write Off	$	250		$	—		$	—
Non-Cash Investing Activities:
Security Deposits Assumed in Conjunction with the Acquisition of Real Estate	$	—		$	330		$	1,078
Real Estate Taxes Assumed in Conjunction with the Acquisition of Real Estate	$	285		$	140		$	82
Liabilities Assumed in Conjunction with Sale of Real Estate	$	1,954		$	368		$	534
Capital Expenditures Recorded, Included in Liabilities	$	2,212		$	5,512		$	9,476
Write-off of Fully Amortized Assets	$	2,181		$	3,588		$	1,653

The accompanying notes are an integral part of the consolidated financial statements.

107

FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

1.   Organization and Formation of Joint Venture

FirstCal Industrial, LLC (the “Joint Venture”) was organized in the state of Delaware on March 18, 2005. The Joint Venture was formed to invest in, own, develop, redevelop, operate and hold for long term capital appreciation interests in certain industrial properties. CSJV FirstCal, LLC, a wholly owned subsidiary of California State Teachers’ Retirement System, holds a 90% membership interest. FR FirstCal, LLC, a wholly owned subsidiary of First Industrial Investment, Inc. (“FIII”), holds the remaining 10% membership interest and acts as manager to the Joint Venture. FIII is a wholly owned subsidiary of First Industrial, LP (“FILP”). FILP is a limited partnership organized in the state of Delaware on November 23, 1993. The sole general partner of FILP is First Industrial Realty Trust, Inc. (the “REIT”) which is a real estate investment trust organized in the state of Maryland on August 10, 1993.

The Joint Venture finances its investments with capital contributions from its Members, or proceeds from its unsecured line of credits or such other financing as the Members deem appropriate. Properties are managed on a day to day basis by FirstCal Industrial Property Manager, LLC, a wholly owned subsidiary of First Industrial LP (“FILP”) through August 14, 2006 and a wholly owned subsidiary of FIII thereafter. Major decisions are made by the board of the Joint Venture.

As of December 31, 2007, the Joint Venture owned 24 industrial properties comprising approximately 5.0 million square feet (unaudited) of gross leaseable area (“GLA”) and several land parcels. The Joint Venture had 18 development projects in progress. As of December 31, 2006, the Joint Venture owned 45 industrial properties comprising approximately 4.7 million square feet (unaudited) of GLA and several land parcels, and had 22 development projects in progress.

2.   Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements as of December 31, 2007 and December 31, 2006 and for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005 reflect the assets, liabilities, results of operations and cash flows of the Joint Venture on a consolidated basis in accordance with generally accepted accounting principles (“GAAP”). The Joint Venture wholly owns Limited Liability Companies (“LLCs”), whose purpose is to hold, develop and operate single industrial properties. The financial statements presented consolidate the wholly owned LLCs. All inter-company transactions have been eliminated.

Management Estimates

In order to conform with GAAP, management, in preparation of the Joint Venture’s consolidated financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2007 and December 31, 2006 and the reported amounts of revenues and expenses for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005. Actual results differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short term maturity of these investments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

Restricted Cash

At December 31, 2007 and December 31, 2006, restricted cash includes cash held in escrow accounts managed by third parties for earnest deposits on prospective property and land acquisitions and miscellaneous obligations arising from the sales of certain properties. At December 31, 2007 and December 31, 2006, restricted cash also includes gross proceeds from the sales of certain properties which will be disbursed to FR FirstCal, LLC upon satisfaction of the terms of a resolution passed by the board of the Joint Venture.

Investment in Real Estate and Depreciation

Investment in real estate is carried at cost. The Joint Venture reviews its properties on an annual basis for impairment. To determine if an impairment may exist, the Joint Venture reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Joint Venture estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property on an individual property basis, the Joint Venture will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Joint Venture ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely and, as a result, the Joint Venture decides not to sell a property previously classified as held for sale, the Joint Venture will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Joint Venture determines fair value of properties that are held for use by discounting the future expected cash flows of the properties. To calculate the fair value of properties held for sale, the Joint Venture deducts from the contract price of the property the estimated costs to close the sale. The Joint Venture classifies properties as held for sale when the board of the Joint Venture approves the sale of the property.

Costs such as interest, real estate taxes and other directly related costs incurred during construction periods begin to be capitalized to the development projects from the point the Joint Venture is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Upon substantial completion, the Joint Venture reclassifies construction in progress to building, tenant improvements and leasing commissions. Depreciation expense is computed using the straight-line method based on the following useful lives:

	Years
Buildings and Improvements	10 to 45
Land Improvements	3 to 15

Construction expenditures for tenant improvements, leasehold improvements and leasing commissions are capitalized and amortized over the terms of each specific lease. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.

The Joint Venture accounts for all acquisitions in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standard No. 141, “Business Combinations”. Upon acquisition of a property, the Joint Venture allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

commissions and intangible assets including in-place leases, tenant relationships, above market and below market leases. The Joint Venture allocates the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term and are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental income on the Joint Venture’s consolidated statement of operations.

The purchase price is further allocated to in-place lease and tenant relationship values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Joint Venture’s overall relationship with the respective tenant. The value of in-place lease intangible assets are amortized to depreciation and amortization expense over the remaining lease term of the respective lease. The value allocated to tenant relationship is amortized to depreciation and amortization expense over the expected term of the relationship, which includes an estimate of the probability of lease renewal and its estimated term. If a tenant terminates its lease before maturity, the unamortized portion of the tenant improvements, leasing commissions, above and below market leases, in-place lease and the tenant relationship value is immediately expensed.

Deferred leasing intangibles included in the Joint Venture’s Other Assets and Real Estate Held for Sale consist of the following:

	December 31,			December 31,
	2007			2006
In-Place Leases	$	1,672		$	6,585
Less: Accumulated Amortization		(666	)		(1,760	)
	$	1,006		$	4,825
Above Market Leases	$	741		$	5,349
Less: Accumulated Amortization		(465	)		(604	)
	$	276		$	4,745
Tenant Relationship	$	609		$	2,721
Less: Accumulated Amortization		(121	)		(249	)
	$	488		$	2,472
Deferred Leasing Intangibles included in the Joint Venture’s other liabilities consist of the following:
Below Market Leases	$	135		$	1,336
Less: Accumulated Amortization		(110	)		(444	)
	$	25		$	892

Amortization expense related to in-place leases and tenant relationships of deferred leasing intangibles was $1,878, $4,905, and $1,807, for the years ended December 31, 2007 and 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. Rental revenues decreased by $299, $174, and $197 related to amortization of above/(below) market leases for the years ended December 31, 2007 and 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. We will recognize net

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

amortization expense related to the deferred leasing intangibles over the next five years, for properties owned as of December 31, 2007, as follows:

			Estimated Net
	Estimated Net		Decrease to
	Amortization of		Rental Revenues
	In-Place Leases		Related to
	and Tenant		Above and Below
	Relationships		Market Leases
2008	$	374	$	152
2009		287		93
2010		263		5
2011		206		1
2012		169		—

Deferred Financing Costs

Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs at December 31, 2007 and December 31, 2006 was $1,113 and $797, respectively. Unamortized deferred financing costs are immediately expensed when debt is retired before the maturity date.

Revenue Recognition

Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by the Joint Venture.

Revenue is recognized on payments received from tenants for early lease terminations after the Joint Venture determines that all the necessary criteria have been met in accordance with FASB Statement of Financial Accounting Standards No. 13, “Accounting for Leases.”

The Joint Venture provides an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $33 and $169 as of December 31, 2007 and December 31, 2006, respectively.

Gain on Sale of Real Estate

Gain on sale of real estate is recognized using the full accrual method, when appropriate. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are removed from the accounts with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Joint Venture after completion of each sale are included in the determination of the gains on sales.

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

Income Taxes

In accordance with limited liability company taxation, each of the members is responsible for reporting their share of taxable income or loss. Accordingly, no provision has been made in the consolidated financial statements for federal income taxes. Certain subsidiaries are subject to state and franchise taxes. The provision for state income and franchise taxes has been allocated to General and Administrative expense and Income from Discontinued Operations in the consolidated statements of operations and has not been separately stated.

Fair Value of Financial Instruments

FASB Statement of Financial Accounting Standards No. 107, “Disclosures About Fair Value of Financial Instruments,” requires disclosures about the fair value of financial instruments whether or not such instruments are recognizable in the balance sheet. The Joint Venture’s financial instruments include net tenant accounts receivable, accounts payable, other accrued expenses, related party notes and unsecured lines of credit.

The fair values of the net tenant accounts receivable, accounts payable and other accrued expenses were not materially different from their carrying or contract values due to the short-term nature of these financial instruments. See Note 3 for the fair values of the unsecured lines of credit and related party notes.

Discontinued Operations

FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Joint Venture as a result of the disposal transaction and (b) the Joint Venture will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be reclassified and presented in discontinued operations in prior period consolidated statements of operations.

3.   Unsecured Lines of Credit and Due to Related Party

On March 18, 2005, the Joint Venture entered into a revolving unsecured line of credit (the “March 2005 LOC”) with a borrowing capacity of $100,000 which matured on June 16, 2005 and bore interest at a floating rate of LIBOR plus 0.675%. The March 2005 LOC was paid off and retired utilizing proceeds received under the June 2005 LOC (as defined below).

On June 6, 2005, the Joint Venture entered into a revolving unsecured line of credit (the “June 2005 LOC”) with a borrowing capacity of $125,000, with the right, subject to certain conditions, to increase the borrowing capacity up to $200,000, which had a maturity date of December 17, 2007 and bears interest at a floating rate of LIBOR plus 0.675%. On August 18, 2005, the Joint Venture amended the June 2005 LOC to increase the borrowing capacity to $180,000. On January 13, 2006, the Joint Venture entered into a second amendment to the June 2005 LOC to increase the borrowing capacity to $300,000 subject to certain conditions. On August 14, 2006, the Joint Venture entered into a third amendment to the June 2005 LOC to extend the maturity date to April 21, 2009. The unsecured line of credit contains certain covenants, including limitations on occurrence of debt and debt service coverage. The Joint Venture is in compliance with these covenants at December 31, 2007 and 2006.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

On November 14, 2005, the Joint Venture entered into a note payable (the “November 2005 Note”) to FirstCal Industrial 2, LLC, a joint venture between CSJV FirstCal 2, LLC and FR FirstCal 2, LLC, which are wholly owned entities of the California State Teachers’ Retirement System and FIII, respectively. The November 2005 Note had a borrowing capacity of $36,000, matured on September 30, 2006 and bore interest at a floating rate of LIBOR plus 0.65%. The Joint Venture paid off the November 2005 Note in January 2006 utilizing proceeds received under the January 2006 LOC (as defined below).

On January 13, 2006, the Joint Venture entered into an unsecured line of credit (the “January 2006 LOC”) which has a borrowing capacity of $125,000, matures on January 31, 2009 and bears a fixed interest rate of 5.065%. The unsecured line of credit contains certain covenants, including limitations on occurrence of debt and debt service coverage. The Joint Venture is in compliance with these covenants at December 31, 2007 and 2006.

On February 1, 2006, the Joint Venture entered into an unsecured line of credit (the “February 2006 LOC”) which has a borrowing capacity of $75,000, matures on February 1, 2009 and bears a fixed interest rate of 5.95%. The unsecured line of credit contains certain covenants, including limitations on occurrence of debt and debt service coverage. The Joint Venture is in compliance with these covenants at December 31, 2007 and 2006

On June 4, 2007, the Joint Venture entered into a note payable (the “June 2007 Note”) to FirstCal Industrial 2, LLC. The June 2007 Note matures on September 30, 2009 and bears interest at a floating rate of the Effective Federal Funds Rate plus 0.85%. The outstanding balance at December 31, 2007 totaled $155,000, which is reflected on the consolidated balance sheet as Related Party Notes.

On November 15, 2007, the Joint Venture entered into a note payable (the “November 2007 Note I”) to FirstCal Industrial 3, LLC, a joint venture between CSJV FirstCal 3, LLC and FR FirstCal 3, LLC, which are wholly owned entities of the California State Teachers’ Retirement System and FIII respectively. The November 2007 Note I matures on November 15, 2011 and bears interest at a floating rate of LIBOR plus 0.375%. The outstanding balance at December 31, 2007 totaled $100,000, which is reflected on the consolidated balance sheet as Related Party Notes.

On November 15, 2007, the Joint Venture entered into a note payable (the “November 2007 Note II”) to FirstCal Industrial 3, LLC. The November 2007 Note II matures on November 15, 2013 and bears interest at a floating rate of LIBOR plus 0.4%. The outstanding balance at December 31, 2007 totaled $22,500, which is reflected on the consolidated balance sheet as Related Party Notes.

All lines of credit are guaranteed by California State Teachers’ Retirement System, sole owner of the CSJV FirstCal, LLC member.

The net unamortized deferred financing fees related to the lines of credit are being amortized over the life of the lines of credit in accordance with Emerging Issues Task Force Issue 98-14, “Debtor’s Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements.”

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

The following table discloses certain information regarding the Joint Venture’s unsecured lines of credit and the related party notes:

	Outstanding		Accrued
	Balance at		Interest at		Interest Rate at
	December 31,		December 31,		December 31,			Maturity
	2007		2007		2007			Date
Unsecured Lines of Credit
June 2005 LOC	$	11,015	$	78		7.250	%		4/21/2009
January 2006 LOC		125,000		510		5.065	%		1/1/2009
February 2006 LOC		75,000		360		5.953	%		2/1/2009
Total	$	211,015	$	948
Related Party Notes
June 2007 Note	$	155,000	$	671		3.910	%		9/30/2009
November 2007 Note I		100,000		225		5.405	%		11/15/2011
November 2007 Note II		22,500		51		5.430	%		11/15/2013
Total	$	277,500	$	1,895

	Outstanding		Accrued
	Balance at		Interest at		Interest Rate at
	December 31,		December 31,		December 31,			Maturity
	2006		2006		2006			Date
Unsecured Lines of Credit
June 2005 LOC	$	105,643	$	406		5.646	%		4/21/2009
January 2006 LOC		125,000		545		5.065	%		1/1/2009
February 2006 LOC		75,000		384		5.953	%		2/1/2009
Total	$	305,643	$	1,335

The following is a schedule of the stated maturities and scheduled principal payments of the unsecured lines of credit inclusive of related party debt:

	Amount
2008	$	—
2009		366,015
2010		—
2011		100,000
2012		—
Thereafter		22,500
Total	$	488,515

The Joint Venture is charged an unused commitment fee that is equal to 0.15% of the unused portion of the June 2005 LOC. Total fees are $135, $119 and $24 for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively, and are recorded in General and Administrative expense.

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

Fair Value of Financial Instruments

At December 31, 2007 and December 31, 2006 the fair value of the Joint Venture’s unsecured lines of credit were as follows:

	December 31, 2007				December 31, 2006
	Carrying Value		Fair Value		Carrying Value		Fair Value
Unsecured Lines of Credit
June 2005 LOC	$	11,015	$	11,015	$	105,643	$	105,643
January 2006 LOC		125,000		119,831		125,000		123,294
February 2006 LOC		75,000		72,200		75,000		75,686
Total	$	211,015	$	203,046	$	305,643	$	304,623
Related Party Notes
June 2007 Note		155,000		155,000		—		—
November 2007 Note I		100,000		100,000		—		—
November 2007 Note II		22,500		22,500		—		—
Total	$	277,500	$	277,500	$	—	$	—

The fair values of the January 2006 LOC and February 2006 LOC were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair values of the June 2005 LOC, June 2007 Note, November 2007 Note I and November Note II approximate their carrying values due to the variable interest rate nature of the loans.

4.   Acquisition and Development of Real Estate

In 2007, the Joint Venture acquired three industrial properties comprising, in aggregate, approximately 1.2 million square feet (unaudited) of GLA and several land parcels for approximately $289,359, excluding costs of $3,394 incurred in conjunction with the acquisition of the properties. The Joint Venture also substantially completed development of four properties comprising approximately 2.0 million square feet (unaudited) of GLA for approximately $87,554. The Joint Venture reclassified the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.

On March 2, 2007, the Joint Venture acquired an operating golf course in Litchfield Park, Arizona, for purposes of future development. The following are the results of operations for the ownership period in 2007. The Total Revenues are included in Other Income in the consolidated statement of operations and Costs of Goods Sold and Operating Expenses are included in Other Expenses in the consolidated statement of operations:

Total Revenues	$	941
Cost of Goods Sold		(134	)
Operating Expenses		(594	)
General and Administrative		(151	)
Income from Operations	$	62

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

In 2006, the Joint Venture acquired 21 industrial properties comprising, in aggregate, approximately 3.1 million square feet (unaudited) of GLA and several land parcels for approximately $298,031, excluding costs of $4,966 incurred in conjunction with the acquisition of the properties. The Joint Venture also substantially completed development of three properties comprising approximately 0.8 million square feet (unaudited) of GLA at a cost of approximately $35,367. The Joint Venture reclassified the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.

In 2005, the Joint Venture acquired 47 industrial properties comprising, in aggregate, approximately 4.2 million square feet (unaudited) of GLA and several land parcels. The gross purchase price for 47 industrial properties and several land parcels totaled approximately $309,308, excluding costs of $1,198 incurred in conjunction with the acquisition of the properties

Intangible Assets Subject To Amortization in the Period of Acquisition

There were no in-place leases, above market leases, leasing commissions, tenant relationships and below market leases recorded as a result of the 2007 acquisitions.

The fair value of in-place leases, above market leases, leasing commissions and tenant relationships recorded as a result of the 2006 acquisitions was $3,925, $3,898, $1,262 and $3,169, respectively. The fair value of below market leases recorded as a result of the 2006 acquisitions was $1,065. The weighted average life in months of in-place leases, above market leases, leasing commissions and tenant relationships recorded as a result of 2006 acquisitions were 38, 114, 79 and 86 months, respectively. The weighted average life in months of below market leases recorded as a result of 2006 acquisitions was 25 months.

5.   Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations

In 2007, the Joint Venture sold 31 industrial properties comprising, in aggregate, approximately 3.1 million square feet (unaudited) of GLA and eight land parcels. Gross proceeds from the sales of the 31 industrial properties and eight land parcels were approximately $244,767. The gain on sale of real estate was approximately $55,176, of which $35,765 is shown in discontinued operations as 28 of the 31 properties meet the criteria of FAS 144. The results of operations and gain on sale of real estate for the three properties and eight land parcels that do not meet the criteria established by FAS 144 are included in Gain on Sale of Real Estate in continuing operations.

In 2006, the Joint Venture sold 26 industrial properties comprising, in aggregate, approximately 3.3 million square feet (unaudited) of GLA and seven land parcels. Gross proceeds from the sales of the 26 industrial properties and seven land parcels were approximately $287,106. The gain on sale of real estate was approximately $62,204, of which $34,669 is shown in discontinued operations as all 26 properties meet the criteria of FAS 144. The results of operations and gain on sale of real estate for the seven land parcels that do not meet the criteria established by FAS 144 are included in Gain on Sale of Real Estate in continuing operations.

In 2005, the Joint Venture sold two land parcels. Gross proceeds from the sales of the two land parcels were $28,908. The gain on sale of real estate was approximately $9,434. The two land parcels do not meet the criteria established by the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”) to be included in discontinued operations.

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FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

At December 31, 2007, the Joint Venture had six industrial properties comprising approximately 0.9 million square feet (unaudited) of GLA held for sale. In accordance with FAS 144, the results of operations of the six industrial properties held for sale at December 31, 2007 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.

The following table discloses certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005.

	2007			2006			2005
Total Revenues	$	7,769		$	12,894		$	6,881
Operating Expenses		(3,439	)		(5,309	)		(2,552	)
Depreciation and Amortization		(4,588	)		(8,729	)		(6,155	)
General and Administrative		(347	)		(554	)		(270	)
Gain on Sale of Real Estate		35,765			34,669			—
Income (Loss) from Discontinued Operations	$	35,160		$	32,971		$	(2,096	)

6.   Future Minimum Rental Revenues

The Joint Venture’s properties are leased to tenants under net and semi-net operating leases. Minimum lease payments from rent, excluding tenant reimbursements of expenses, under non-cancelable operating leases in effect as of December 31, 2007 are approximately as follows:

2008	$	13,739
2009		13,256
2010		13,194
2011		13,167
2012		12,924
Thereafter		56,975
Total	$	123,255

Credit Risk

For the year ended December 31, 2007, JC Penney Corporation accounted for 14.3% of rental revenue. For the year ended December 31, 2006, no individual tenants accounted for more than 10% of rental revenue. For the period of March 18, 2005 (inception) through December 31, 2005, Edron Fixture Corporation accounted for 18.5% of rental revenue.

7.   Member’s Equity

Capital Contributions

The Members are required to make capital contributions in accordance with their ownership percentages from time to time as required by the LLC agreement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

Distributions and Allocations of Profits and Losses

Distributions of operating cash flows are made to Members in proportion to their ownership interests. Distributions of extraordinary cash flows from a capital event are distributed to the Members with FR FirstCal, LLC receiving a higher allocation of distributions compared to its ownership interest if certain IRR hurdles are met.

8.   Related Party Transactions

In 2007, the Joint Venture sold one parcel of land to FIII and one parcel of land to FILP, the sole owner of FIII. Gross proceeds from the sales of the two land parcels were approximately $10,093. The gain on sale of real estate was approximately $3,524.

The Joint Venture acquired two land parcels in June 2006 from FIII for a total purchase price of $12,305.

The Joint Venture acquired six industrial properties and several land parcels in March 2005 from FILP for a total purchase price of $77,061. An additional industrial property was acquired from FILP in June 2005 for a purchase price of $7,000. The Joint Venture acquired one industrial property from the REIT in June 2005 for a purchase price of $3,580.

The properties owned by the Joint Venture are managed by FR FirstCal, LLC, a wholly owned subsidiary of FIII, which is a 10% member of the Joint Venture. Fees earned by FIII from the Joint Venture through its wholly owned subsidiaries include portfolio management fees, development fees and disposition fees. Portfolio management fees totaled $420, $270 and $195 for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. The portfolio management fee is a fixed amount per year plus a percentage of the Excess Management Fee Basis, as defined per the Joint Venture Operating Agreement, of $500,000, which was achieved in 2006. The portfolio management fees were prorated for 2005, based on the fixed rate of $250 per year. Development fees, which are based on a percentage of any hard or soft costs incurred with respect to the construction, development or repositioning of a property, totaled $7,282, $3,041 and $1,091 for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. Disposition fees are based on the market rate that would be paid for the sale of similar properties, in the geographic market in which the property is located, provided there is no external broker or a percentage of the sales price if an external broker is engaged. The Joint Venture paid $864, $1,094 and $196 of disposition fees for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. FILP, the sole owner of FIII, earns property management fees, leasing fees and administrative fees through its wholly owned subsidiaries. As of August 15, 2006, the property management, leasing management and administration was assigned to FIII. Property management fees incurred are based on a percentage of gross receipts. Property Management fees totaled $362, $478 and $190 for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. Leasing fees are based on the market rate provided there is no tenant broker or a percentage of the market rate if there is a tenant broker. Leasing fees totaled $1,984, $895 and $215 for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively. Administrative fees related to reimbursement for FIII employees managing the Joint Venture properties totaled $242, $268 and $29 for the years ended December 31, 2007 and December 31, 2006 and for the period from March 18, 2005 through December 31, 2005, respectively.

In 2007 and 2006, the Joint Venture engaged FIII to act as general contractor for several development projects. Under the terms of the contract between FIII and the Joint Venture, general contracting fees incurred

118

FIRSTCAL INDUSTRIAL, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AMOUNTS AS OF DECEMBER 31, 2007 AND 2006 AND FOR THE YEARS THEN ENDED NOT

COVERED BY THE REPORT INCLUDED HEREIN

($ in 000’s)

are based on a percentage of hard costs. These fees totaled $719 and $941 for the years ended December 31, 2007 and 2006, respectively.

At December 31, 2007 and December 31, 2006, the Joint Venture accrued property management fees, portfolio management fees, development fees, maintenance services, construction reimbursements and other reimbursements payable to FIII and FILP of $3,259 and $5,711, respectively.

As stated in Note 3, the Joint Venture entered into a note payable to FirstCal Industrial 2, LLC, a joint venture between CSJV FirstCal 2, LLC and FR FirstCal 2, LLC, which are wholly owned entities of the California State Teachers’ Retirement System and FIII, respectively. Additionally, the Joint Venture entered into a note payable to FirstCal Industrial 3, LLC, a joint venture between CSJV FirstCal 3, LLC and FR FirstCal 3, LLC, which are wholly owned entities of the California State Teachers’ Retirement System and FIII, respectively. In 2005, the Joint Venture entered into a revolving line of credit with FirstCal Industrial 2, LLC, which was paid off in January 2006.

9.   Commitments and Contingencies

In the normal course of business, the Joint Venture is involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the consolidated financial position, operations or liquidity of the Joint Venture.

The Joint Venture has committed to the construction of certain industrial properties totaling approximately 10.7 million square feet (unaudited) of GLA. The estimated total construction costs are approximately $855.6 million (unaudited). Of this amount, approximately $383.2 million (unaudited) remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated completion cost stated above.

10.   Subsequent Events

During the period from January 1, 2008 through February 21, 2008, the Joint Venture acquired 2 land parcels. The gross purchase price for the land parcels was approximately $19,098, excluding costs incurred in conjunction with the acquisition of the properties.

On January 25, 2008, the Joint Venture entered into a note payable (the “January 2008 Note”) to FirstCal Industrial 2, LLC. The January 2008 Note matures on September 30, 2009 and bears interest at a floating rate of LIBOR plus 0.65%. As of the issuance date of the report, $122,500 has been drawn upon. On January 25, 2008, the Joint Venture paid off the November 2007 Note I and the November 2007 Note II using proceeds received under the January 2008 Note.

During the period January 1, 2008 through February 21, 2008, the Joint Venture received contributions totaling $16,529 from the members of the Joint Venture and distributed $1,347 to the members of the Joint Venture.

119

FIRST INDUSTRIAL, LP.

SCHEDULE III:

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2007

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
Atlanta
1650 GA Highway 155	McDonough, GA		$788	$	4,544	$	289		$	788	$	4,833	$	5,622	$	1,576		1994		(m	)
1665 Dogwood Drive	Conyers, GA		635		3,662		482			635		4,144		4,778		1,618		1994		(m	)
1715 Dogwood Drive	Conyers, GA		288		1,675		1,744			288		3,419		3,707		639		1994		(m	)
11235 Harland Drive	Covington, GA		125		739		161			125		900		1,024		278		1994		(m	)
4050 Southmeadow Parkway	Atlanta, GA		401		2,813		328			425		3,117		3,542		1,113		1994		(m	)
4051 Southmeadow Parkway	Atlanta, GA		726		4,130		1,328			726		5,458		6,184		1,939		1994		(m	)
4071 Southmeadow Parkway	Atlanta, GA		750		4,460		1,307			828		5,690		6,517		1,816		1994		(m	)
4081 Southmeadow Parkway	Atlanta, GA		1,012		5,918		1,733			1,157		7,506		8,663		2,321		1994		(m	)
370 Great Southwest Parkway(d)	Atlanta, GA		527		2,984		655			546		3,619		4,165		1,080		1996		(m	)
955 Cobb Place	Kennesaw, GA		780		4,420		636			804		5,032		5,836		1,325		1997		(m	)
1256 Oakbrook Drive	Norcross, GA		336		1,907		387			339		2,291		2,630		468		2001		(m	)
1265 Oakbrook Drive	Norcross, GA		307		1,742		636			309		2,377		2,686		427		2001		(m	)
1266 Oakbrook Drive	Norcross, GA		234		1,326		141			235		1,465		1,701		244		2001		(m	)
1280 Oakbrook Drive	Norcross, GA		281		1,592		346			283		1,937		2,219		370		2001		(m	)
1300 Oakbrook Drive	Norcross, GA		420		2,381		209			423		2,588		3,011		410		2001		(m	)
1325 Oakbrook Drive	Norcross, GA		332		1,879		320			334		2,197		2,531		385		2001		(m	)
1351 Oakbrook Drive	Norcross, GA		370		2,099		246			373		2,343		2,716		388		2001		(m	)
1346 Oakbrook Drive	Norcross, GA		740		4,192		489			744		4,676		5,420		719		2001		(m	)
1412 Oakbrook Drive	Norcross, GA		313		1,776		198			315		1,972		2,288		352		2001		(m	)
Greenwood Industrrial Park	McDonough, GA		1,550		—		7,485			1,550		7,485		9,035		629		2004		(m	)
3060 South Park Blvd	Ellenwood, GA		1,600		12,464		862			1,603		13,323		14,926		1,781		2003		(m	)
46 Kent Drive	Cartersville, GA		875		2,476		13			879		2,485		3,364		241		2005		(m	)
100 Dorris Williams Industrial -King	Atlanta, GA	(n)	401		3,754		42			406		3,791		4,197		560		2005		(m	)
605 Stonehill Diver	Atlanta, GA		485		1,979		27			490		2,001		2,491		538		2005		(m	)
6514 Warren Drive	Norcross, GA		510		1,250		(132	)		513		1,115		1,628		105		2005		(m	)
6544 Warren Drive	Norcross, GA		711		2,310		63			715		2,369		3,083		259		2005		(m	)
720 Industrial Boulevard	Dublin, GA		250		2,632		40			255		2,667		2,922		723		2005		(m	)
5356 East Ponce DeLeon	One Mountain, GA		604		3,888		12			610		3,894		4,504		547		2005		(m	)
5390 East Ponce DeLeon	One Mountain, GA		397		1,791		16			402		1,802		2,204		227		2005		(m	)
1755 Enterprise Drive	Buford, GA		712		2,118		52			716		2,166		2,882		179		2006		(m	)
4555 Atwater Court	Buford, GA		881		3,550		300			885		3,846		4,731		280		2006		(m	)
80 Liberty Industrial Parkway	McDonough, GA		756		3,695		176			763		3,864		4,627		139		2007		(m	)
195 & 197 Collins Boulevard	Athens, GA		1,410		5,344		65			1,426		5,393		6,819		1,388		2005		(m	)
596 Bonnie Valentine Way	Pendergrass, GA		2,580		21,730		144			2,596		21,857		24,454		53		2007		(m	)
Baltimore

S-1

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
1820 Portal	Baltimore, MD		884		4,891		455			899		5,330		6,230		1,284		1998		(m	)
8900 Yellow Brick Road	Baltimore, MD		447		2,473		384			475		2,829		3,304		672		1998		(m	)
9700 Martin Luther King Hwy	Lanham, MD		700		1,920		728			700		2,648		3,348		625		2003		(m	)
9730 Martin Luther King Hwy	Lanham, MD		500		955		501			500		1,456		1,956		286		2003		(m	)
4621 Boston Way	Lanham, MD		1,100		3,070		780			1,100		3,850		4,950		788		2003		(m	)
4720 Boston Way	Lanham, MD		1,200		2,174		686			1,200		2,860		4,060		669		2003		(m	)
2250 Randolph Drive	Dulles, VA		3,200		8,187		36			3,208		8,215		11,423		944		2004		(m	)
22630 Dulles Summit Court	Dulles, VA		2,200		9,346		128			2,206		9,468		11,674		1,097		2004		(m	)
4201 Forbes Boulevard	Lanham, MD		356		1,823		396			375		2,200		2,575		319		2005		(m	)
4370-4383 Lottsford Vista Road	Lanham, MD		279		1,358		192			296		1,533		1,829		174		2005		(m	)
4400 Lottsford Vista Road	Lanham, MD		351		1,955		93			372		2,027		2,399		185		2005		(m	)
4420 Lottsford Vista Road	Lanham, MD		539		2,196		241			568		2,408		2,976		254		2005		(m	)
11204 McCormick Road	Hunt Valley, MD		1,017		3,132		99			1,038		3,210		4,248		341		2005		(m	)
11110 Pepper Road	Hunt Valley, MD		918		2,529		253			938		2,762		3,700		299		2005		(m	)
11100 Gilroy Road	Hunt Valley, MD		901		1,455		43			919		1,480		2,399		206		2005		(m	)
336 Clubhouse	Hunt Valley, MD		982		3,158		633			1,004		3,769		4,773		545		2005		(m	)
10709 Gilroy Road	Hunt Valley, MD		907		2,884		(173	)		913		2,705		3,618		375		2005		(m	)
10947 Golden West	Hunt Valley, MD		1,134		3,436		70			1,135		3,504		4,640		322		2005		(m	)
7120-7132 Ambassador Road	Hunt Valley, MD		829		1,329		254			847		1,565		2,412		230		2005		(m	)
7142 Ambassador Road	Hunt Valley, MD		924		2,876		115			942		2,973		3,915		229		2005		(m	)
7144-7160 Ambassador Road	Hunt Valley, MD		979		1,672		101			1,000		1,752		2,752		302		2005		(m	)
7200 Rutherford	Hunt Valley, MD		1,032		2,150		122			1,054		2,250		3,304		316		2005		(m	)
2700 Lord Baltimore	Hunt Valley, MD		875		1,826		262			897		2,066		2,963		346		2005		(m	)
9800 Martin Luther King Hwy	Lanham, MD		1,200		2,457		309			1,200		2,766		3,966		478		2003		(m	)
Central Pennsylvania
16522 Hunters Green Parkway	Hagerstown, MD	(o)	1,390		13,104		3,902			1,863		16,534		18,396		1,903		2003		(m	)
Golden Eagle Business Center	Harrisburg, PA		585		3,176		120			601		3,281		3,881		302		2005		(m	)
320 Museum Road	Washington, PA		201		1,819		57			208		1,869		2,077		237		2005		(m	)
Chicago
3600 West Pratt Avenue	Lincolnwood, IL		1,050		5,767		1,199			1,050		6,966		8,016		2,368		1994		(m	)
6750 South Sayre Avenue	Bedford Park, IL		224		1,309		585			224		1,894		2,118		561		1994		(m	)
585 Slawin Court	Mount Prospect, IL		611		3,505		941			611		4,446		5,058		1,230		1994		(m	)
2300 Windsor Court	Addison, IL		688		3,943		590			696		4,525		5,221		1,625		1994		(m	)
3505 Thayer Court	Aurora, IL		430		2,472		33			430		2,505		2,936		844		1994		(m	)
305-311 Era Drive	Northbrook, IL		200		1,154		146			205		1,296		1,501		431		1994		(m	)
12241 Melrose Street	Franklin Park, IL		332		1,931		1,901			469		3,695		4,164		1,480		1995		(m	)
11939 S Central Avenue	Alsip, IL		1,208		6,843		3,185			1,305		9,931		11,235		2,440		1997		(m	)
405 East Shawmut	LaGrange, IL		368		2,083		434			388		2,497		2,884		675		1997		(m	)
1010-50 Sesame Street	Bensenville, IL		979		5,546		2,300			1,048		7,776		8,825		1,688		1997		(m	)
7501 S. Pulaski	Chicago, IL		318		2,038		895			318		2,934		3,251		669		1997		(m	)
385 Fenton Lane	West Chicago, IL		868		4,918		(242	)		884		4,658		5,543		1,198		1998		(m	)
905 Paramount	Batavia, IL		243		1,375		439			252		1,804		2,056		459		1998		(m	)
1005 Paramount	Batavia, IL		282		1,600		451			293		2,040		2,333		546		1998		(m	)

S-2

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
2120-24 Roberts	Broadview, IL		220		1,248		460			231		1,698		1,929		456		1998		(m	)
700 Business Center Drive	Mount Prospect, IL		270		1,492		297			288		1,771		2,059		287		2000		(m	)
800 Business Center Drive	Mount Prospect, IL		631		3,493		237			666		3,695		4,361		630		2000		(m	)
580 Slawin Court	Mount Prospect, IL		233		1,292		234			254		1,505		1,760		255		2000		(m	)
1150 Feehanville Drive	Mount Prospect, IL		260		1,437		131			273		1,555		1,829		291		2000		(m	)
19W661 101st Street	Lemont, IL		1,200		6,643		2,300			1,220		8,923		10,142		1,692		2001		(m	)
175 Wall Street	Glendale Heights, IL		427		2,363		163			433		2,520		2,953		377		2002		(m	)
800-820 Thorndale Avenue	Bensenville, IL		751		4,159		637			761		4,786		5,547		623		2002		(m	)
1661 Feehanville Drive	Mount Prospect, IL		985		5,455		1,962			1,044		7,358		8,402		1,395		2004		(m	)
2250 Arthur Avenue	Elk Grove Village, IL		800		1,543		(3	)		811		1,529		2,340		330		2004		(m	)
1850 Touhy & 1158-60 McCage Ave	Elk Grove Village, IL		1,500		4,842		57			1,514		4,885		6,399		795		2004		(m	)
1088-1130 Thorndale Avenue	Bensenville, IL		2,103		3,674		4			2,108		3,673		5,781		496		2005		(m	)
855-891 Busse(Route 83)	Bensenville, IL		1,597		2,767		(28	)		1,601		2,735		4,336		363		2005		(m	)
1060-1074 W. Thorndale Ave	Bensenville, IL		1,704		2,108		31			1,709		2,134		3,843		341		2005		(m	)
400 Crossroads Parkway	Bolingbrook, IL		1,178		9,453		723			1,181		10,173		11,354		971		2005		(m	)
7609 West Industrial Drive	Forest Park, IL		1,207		2,343		207			1,213		2,544		3,757		347		2005		(m	)
7801 West Industrial Drive	Forest Park, IL		1,215		3,020		19			1,220		3,034		4,254		425		2005		(m	)
1111 Davis Road	Elgin, IL		998		1,859		635			1,046		2,447		3,493		460		2006		(m	)
2900 W 166th St	Markham, IL		1,132		4,293		2			1,133		4,294		5,427		268		2007		(m	)
555 W Algonquin Rd	Arlington Heights, IL		574		741		2,049			579		2,785		3,364		48		2007		(m	)
7000 W 60th Street	Chicago, IL		609		932		106			667		980		1,647		23		2007		(m	)
251 Airport Road	Aurora, IL		983		—		6,659			983		6,660		7,642		1,302		2002		(m	)
725 Kimberly Drive	Carol Stream, IL		793		1,395		(20	)		801		1,367		2,168		156		2005		(m	)
17001 S. Vincennes	Thornton, IL		497		504		30			513		518		1,031		120		2005		(m	)
Cincinnati
9900-9970 Princeton	Cincinnati, OH		545		3,088		2,179			566		5,245		5,811		1,748		1996		(m	)
2940 Highland Avenue	Cincinnati, OH		1,717		9,730		2,162			1,772		11,837		13,609		3,894		1996		(m	)
4700-4750 Creek Road	Blue Ash, OH		1,080		6,118		673			1,109		6,761		7,870		2,116		1996		(m	)
12072 Best Place	Springboro, OH		426		—		3,198			443		3,181		3,625		801		1998		(m	)
901 Pleasant Valley Drive	Springboro, OH		304		1,721		332			316		2,042		2,357		490		1998		(m	)
4434 Mulhauser Road	Cincinnati, OH		444		16		4,721			463		4,718		5,181		954		1999		(m	)
9449 Glades Drive	Hamilton, OH		465		—		4,057			477		4,045		4,522		753		2000		(m	)
4436 Muhlhauser Road	Hamilton, OH		630		—		5,672			630		5,672		6,302		1,225		2002		(m	)
4438 Muhlhauser Road	Hamilton, OH		779		—		7,354			779		7,354		8,133		1,406		2002		(m	)
9525 Glades Drive	West Chester, OH		347		1,323		37			355		1,351		1,707		71		2007		(m	)
9776-9876 Windisch Road	West Chester, OH		392		1,744		11			394		1,753		2,147		41		2007		(m	)
9810-9822 Windisch Road	West Chester, OH		395		2,541		16			397		2,556		2,952		39		2007		(m	)
9842-9862 Windisch Road	West Chester, OH		506		3,148		22			508		3,168		3,676		54		2007		(m	)
9872-9898 Windisch Road	West Chester, OH		546		3,039		17			548		3,054		3,602		45		2007		(m	)
9902-9922 Windisch Road	West Chester, OH		623		4,003		22			627		4,021		4,648		81		2007		(m	)
420 Wars Corner Road	Loveland, OH		600		1,083		994			606		2,071		2,677		477		2003		(m	)
422 Wards Corner Road	Loveland, OH		600		1,811		441			605		2,246		2,852		653		2003		(m	)
4663 Dues Drive	West Chester, OH		858		2,273		1,174			875		3,430		4,305		825		2005		(m	)

S-3

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
Cleveland
30311 Emerald Valley Parkway	Glenwillow, OH		681		11,838		320			691		12,148		12,839		708		2006		(m	)
30333 Emerald Valley Parkway	Glenwillow, OH		466		5,447		104			475		5,541		6,017		361		2006		(m	)
7800 Cochran Road	Glenwillow, OH		972		7,033		66			980		7,091		8,071		461		2006		(m	)
7900 Cochran Road	Glenwillow, OH		775		6,244		136			792		6,363		7,155		391		2006		(m	)
7905 Cochran Road	Glenwillow, OH		920		6,174		173			945		6,323		7,268		436		2006		(m	)
30600 Carter Street	Solon, OH		989		3,492		(231	)		1,022		3,227		4,249		540		2006		(m	)
Columbus
3800 Lockbourne Industrial Pkwy	Columbus, OH		1,045		6,421		392			1,045		6,813		7,858		1,915		1996		(m	)
3880 Groveport Road	Columbus, OH		1,955		12,154		696			1,955		12,850		14,805		3,861		1996		(m	)
1819 North Walcutt Road	Columbus, OH		637		4,590		(309	)		634		4,284		4,918		1,350		1997		(m	)
4300 Cemetary Road	Hillard, OH		764		6,248		(5,628	)		764		620		1,384		18		1997		(m	)
4115 Leap Road(d)	Hillard, OH		756		4,297		1,121			756		5,418		6,174		1,211		1998		(m	)
3300 Lockbourne	Columbus, OH		708		3,920		1,671			710		5,589		6,299		1,534		1998		(m	)
1076 Pittsburgh Drive	Delaware, OH	(p)	2,497		5,103		37			2,505		5,132		7,637		695		2005		(m	)
6150 Huntley Road	Columbus, OH		986		5,162		17			990		5,175		6,165		447		2005		(m	)
4600 S. Hamilton Road	Groveport, OH		681		5,941		77			688		6,011		6,699		296		2006		(m	)
2200 Spiegel	Groveport, OH		780		3,700		(209	)		793		3,478		4,271		91		2007		(m	)
4311 Janitrol Road	Columbus, OH		662		4,332		76			675		4,396		5,070		65		2007		(m	)
Dallas/Fort Worth
1275-1281 Roundtable Drive	Dallas, TX		117		839		39			117		878		995		221		1997		(m	)
2406-2416 Walnut Ridge	Dallas, TX		178		1,006		247			183		1,247		1,431		287		1997		(m	)
1324-1343 Roundtable Drive	Dallas, TX		178		1,006		227			184		1,227		1,411		306		1997		(m	)
2401-2419 Walnut Ridge	Dallas, TX		148		839		128			153		962		1,115		266		1997		(m	)
900-906 Great Southwest Pkwy	Arlington, TX		237		1,342		596			270		1,905		2,175		521		1997		(m	)
3000 West Commerce	Dallas, TX		456		2,584		535			469		3,106		3,575		763		1997		(m	)
3030 Hansboro	Dallas, TX		266		1,510		477			276		1,977		2,253		448		1997		(m	)
405-407 113th	Arlington, TX		181		1,026		424			185		1,445		1,630		294		1997		(m	)
816 111th Street	Arlington, TX		251		1,421		266			258		1,680		1,938		509		1997		(m	)
7341 Dogwood Park	Richland Hills, TX		79		435		237			84		666		750		255		1998		(m	)
7427 Dogwood Park	Richland Hills, TX		96		532		571			102		1,098		1,200		265		1998		(m	)
7348-54 Tower Street	Richland Hills, TX		88		489		283			94		766		860		182		1998		(m	)
7370 Dogwood Park	Richland Hills, TX		91		503		128			96		626		722		131		1998		(m	)
7339-41 Tower Street	Richland Hills, TX		98		541		189			104		724		828		151		1998		(m	)
7437-45 Tower Street	Richland Hills, TX		102		563		86			108		642		750		144		1998		(m	)
7331-59 Airport Freeway	Richland Hills, TX		354		1,958		377			372		2,316		2,689		591		1998		(m	)
7338-60 Dogwood Park	Richland Hills, TX		106		587		118			112		699		811		156		1998		(m	)
7450-70 Dogwood Park	Richland Hills, TX		106		584		130			112		708		820		183		1998		(m	)
7423-49 Airport Freeway	Richland Hills, TX		293		1,621		312			308		1,918		2,226		466		1998		(m	)
7400 Whitehall Street	Richland Hills, TX		109		603		91			115		688		804		170		1998		(m	)
1602-1654 Terre Colony	Dallas, TX		458		2,596		783			468		3,369		3,837		567		2000		(m	)
3330 Duncanville Road	Dallas, TX		197		1,114		32			199		1,143		1,342		215		2000		(m	)
2351-2355 Merritt Drive	Garland, TX		101		574		120			103		693		795		121		2000		(m	)

S-4

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
701-735 North Plano Road	Richardson, TX		696		3,944		248		705		4,183		4,888		795		2000		(m	)
2220 Merritt Drive	Garland, TX		352		1,993		727		356		2,716		3,072		506		2000		(m	)
2010 Merritt Drive	Garland, TX		350		1,981		619		357		2,592		2,949		505		2000		(m	)
2363 Merritt Drive	Garland, TX		73		412		93		74		504		578		85		2000		(m	)
2447 Merritt Drive	Garland, TX		70		395		77		71		471		542		82		2000		(m	)
2465-2475 Merritt Drive	Garland, TX		91		514		141		92		654		746		107		2000		(m	)
2485-2505 Merritt Drive	Garland, TX		431		2,440		445		436		2,879		3,315		503		2000		(m	)
2081 Hutton Drive(e)	Carrolton, TX		448		2,540		407		453		2,942		3,395		510		2001		(m	)
2150 Hutton Drive	Carrolton, TX		192		1,089		410		194		1,497		1,692		278		2001		(m	)
2110 Hutton Drive	Carrolton, TX		374		2,117		353		377		2,466		2,843		387		2001		(m	)
2025 McKenzie Drive	Carrolton, TX		437		2,478		369		442		2,842		3,284		544		2001		(m	)
2019 McKenzie Drive	Carrolton, TX		502		2,843		538		507		3,376		3,883		653		2001		(m	)
1420 Valwood Parkway(d)	Carrolton, TX		460		2,608		746		466		3,349		3,814		577		2001		(m	)
1620 Valwood Parkway(e)	Carrolton, TX		1,089		6,173		1,112		1,100		7,274		8,374		1,347		2001		(m	)
1505 Luna Road — Bldg II	Carrolton, TX		167		948		96		169		1,042		1,210		205		2001		(m	)
1625 West Crosby Road	Carrolton, TX		617		3,498		679		631		4,163		4,794		935		2001		(m	)
2029-2035 McKenzie Drive	Carrolton, TX		306		1,870		1,053		306		2,923		3,229		993		2001		(m	)
1840 Hutton Drive(d)	Carrolton, TX		811		4,597		677		819		5,267		6,085		959		2001		(m	)
1420 Valwood Pkwy — Bldg II	Carrolton, TX		373		2,116		363		377		2,475		2,852		456		2001		(m	)
2015 McKenzie Drive	Carrolton, TX		510		2,891		408		516		3,294		3,810		585		2001		(m	)
2105 McDaniel Drive	Carrolton, TX		502		2,844		735		507		3,573		4,080		662		2001		(m	)
2009 McKenzie Drive	Carrolton, TX		476		2,699		441		481		3,136		3,617		601		2001		(m	)
1505 Luna Road — Bldg I	Carrolton, TX		521		2,953		579		529		3,524		4,053		704		2001		(m	)
900-1100 Avenue S	Grand Prairie, TX		623		3,528		801		629		4,323		4,951		661		2002		(m	)
Plano Crossing(f)	Plano, TX		1,961		11,112		396		1,981		11,488		13,469		1,557		2002		(m	)
7413A-C Dogwood Park	Richland Hills, TX		110		623		110		111		732		843		95		2002		(m	)
7450 Tower Street	Richland Hills, TX		36		204		192		36		395		431		78		2002		(m	)
7436 Tower Street	Richland Hills, TX		57		324		161		58		485		543		89		2002		(m	)
7501 Airport Freeway	Richland Hills, TX		113		638		90		115		726		840		114		2002		(m	)
7426 Tower Street	Richland Hills, TX		76		429		146		76		575		651		77		2002		(m	)
7427-7429 Tower Street	Richland Hills, TX		75		427		21		76		447		523		59		2002		(m	)
2840-2842 Handley Ederville Rd	Richland Hills, TX		112		635		65		113		699		812		106		2002		(m	)
7451-7477 Airport Freeway	Richland Hills, TX		256		1,453		195		259		1,645		1,904		268		2002		(m	)
7415 Whitehall Street	Richland Hills, TX		372		2,107		196		375		2,299		2,675		331		2002		(m	)
7450 Whitehall Street	Richland Hills, TX		104		591		110		105		700		805		82		2002		(m	)
7430 Whitehall Street	Richland Hills, TX		143		809		16		144		823		967		110		2002		(m	)
7420 Whitehall Street	Richland Hills, TX		110		621		47		111		666		777		99		2002		(m	)
300 Wesley Way	Richland Hills, TX		208		1,181		17		211		1,196		1,407		157		2002		(m	)
825-827 Avenue H(d)	Arlington, TX		600		3,006		250		604		3,252		3,856		520		2004		(m	)
1013-31 Avenue M	Grand Prairie, TX		300		1,504		78		302		1,580		1,882		261		2004		(m	)
1172-84 113th Street(d)	Grand Prairie, TX		700		3,509		59		704		3,564		4,268		501		2004		(m	)
1200-16 Avenue H(d)	Arlington, TX		600		2,846		80		604		2,922		3,526		444		2004		(m	)
1322-66 N. Carrier Parkway(e)	Grand Prairie, TX		1,000		5,012		164		1,006		5,170		6,176		755		2004		(m	)

S-5

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
2401-2407 Centennial Dr.	Arlington, TX		600		2,534		141			604		2,672		3,275		422		2004		(m	)
3111 West Commerce Street	Dallas, TX		1,000		3,364		69			1,011		3,421		4,433		580		2004		(m	)
4201 Kellway	Addison, TX		306		1,342		31			317		1,361		1,679		140		2005		(m	)
9150 West Royal Lane	Irving, TX		818		3,767		292			820		4,058		4,877		439		2005		(m	)
13800 Senlac Drive	Farmers Ranch, TX		823		4,042		12			825		4,052		4,877		553		2005		(m	)
801-831 S. Great Southwest Pkwy(g)	Grand Prairie, TX		2,581		16,556		502			2,586		17,053		19,639		3,142		2005		(m	)
801-842 Heinz Way	Grand Prairie, TX		599		3,327		110			601		3,435		4,036		430		2005		(m	)
901-937 Heinz Way	Grand Prairie, TX		493		2,823		(53	)		481		2,782		3,263		404		2005		(m	)
2900 Avenue E	Arlington, TX		296		—		1,970			296		1,970		2,266		133		2005		(m	)
7451 Dogwood Park	Richland Hills, TX		133		753		195			134		947		1,081		262		2002		(m	)
2104 Hutton Drive	Carrolton, TX		246		1,393		182			249		1,572		1,821		288		2001		(m	)
3301 Century Circle	Irving, TX		760		3,856		54			769		3,901		4,670		125		2007		(m	)
3730 Wheeler Avenue	Fort Smith, AR		720		2,800		27			726		2,822		3,547		131		2006		(m	)
Denver
4785 Elati	Denver, CO		173		981		178			175		1,157		1,333		344		1997		(m	)
4770 Fox Street	Denver, CO		132		750		116			134		864		998		266		1997		(m	)
1550 W. Evans	Denver, CO		385		2,200		451			385		2,650		3,035		690		1997		(m	)
3871 Revere	Denver, CO		361		2,047		606			368		2,645		3,014		717		1997		(m	)
4570 Ivy Street	Denver, CO		219		1,239		172			220		1,409		1,630		368		1997		(m	)
5855 Stapleton Drive North	Denver, CO		288		1,630		262			290		1,890		2,180		525		1997		(m	)
5885 Stapleton Drive North	Denver, CO		376		2,129		268			380		2,392		2,773		602		1997		(m	)
5977-5995 North Broadway	Denver, CO		268		1,518		424			271		1,939		2,210		520		1997		(m	)
2952-5978 North Broadway	Denver, CO		414		2,346		700			422		3,039		3,461		800		1997		(m	)
4721 Ironton Street	Denver, CO		232		1,313		709			236		2,017		2,254		719		1997		(m	)
445 Bryant Street	Denver, CO		1,829		10,219		1,539			1,829		11,757		13,587		2,961		1998		(m	)
East 47th Drive — A	Denver, CO		441		2,689		(17	)		441		2,672		3,113		728		1997		(m	)
9500 West 49th Street — A	Wheatridge, CO		283		1,625		328			286		1,951		2,236		663		1997		(m	)
9500 West 49th Street — B	Wheatridge, CO		225		1,272		102			226		1,373		1,599		342		1997		(m	)
9500 West 49th Street — C	Wheatridge, CO		600		3,409		126			600		3,536		4,136		955		1997		(m	)
9500 West 49th Street — D	Wheatridge, CO		246		1,537		89			246		1,626		1,872		455		1997		(m	)
451-591 East 124th Avenue	Littleton, CO		383		2,145		816			383		2,961		3,344		1,006		1997		(m	)
608 Garrison Street	Lakewood, CO		265		1,501		408			267		1,907		2,173		521		1997		(m	)
610 Garrison Street	Lakewood, CO		264		1,494		433			266		1,925		2,191		562		1997		(m	)
15000 West 6th Avenue	Golden, CO		913		5,174		1,145			916		6,317		7,233		1,910		1997		(m	)
14998 West 6th Avenue Bldg E	Golden, CO		565		3,199		209			568		3,405		3,973		968		1997		(m	)
14998 West 6th Avenue Bldg F	Englewood, CO		269		1,525		57			271		1,580		1,851		429		1997		(m	)
12503 East Euclid Drive	Denver, CO		1,208		6,905		977			1,208		7,883		9,091		2,251		1997		(m	)
6547 South Racine Circle	Denver, CO		739		4,241		208			739		4,449		5,188		1,153		1997		(m	)
1600 South Abilene	Aurora, CO		465		2,633		83			467		2,714		3,181		717		1997		(m	)
1620 South Abilene	Aurora, CO		268		1,520		101			270		1,619		1,889		443		1997		(m	)
1640 South Abilene	Aurora, CO		368		2,085		111			382		2,183		2,564		581		1997		(m	)
13900 East Florida Ave	Aurora, CO		189		1,071		125			190		1,195		1,385		318		1997		(m	)
11701 East 53rd Avenue	Denver, CO		416		2,355		193			422		2,542		2,964		666		1997		(m	)

S-6

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
5401 Oswego Street	Denver, CO		273		1,547		419			278		1,960		2,238		624		1997		(m	)
3811 Joilet	Denver, CO		735		4,166		448			752		4,597		5,349		1,095		1998		(m	)
14818 West 6th Avenue Bldg A	Golden, CO		468		2,799		354			468		3,152		3,621		859		1997		(m	)
14828 West 6th Avenue Bldg B	Golden, CO		503		2,942		559			503		3,501		4,004		1,087		1997		(m	)
12055 E 49th Ave/4955 Peoria	Denver, CO		298		1,688		439			305		2,120		2,424		577		1998		(m	)
4940-4950 Paris	Denver, CO		152		861		187			156		1,045		1,200		268		1998		(m	)
4970 Paris	Denver, CO		95		537		121			97		656		753		145		1998		(m	)
7367 South Revere Parkway	Englewood, CO		926		5,124		620			934		5,736		6,670		1,441		1998		(m	)
8200 East Park Meadows Drive(d)	Lone Tree, CO		1,297		7,348		1,215			1,304		8,556		9,860		1,766		2000		(m	)
3250 Quentin(d)	Aurora, CO		1,220		6,911		603			1,230		7,503		8,733		1,521		2000		(m	)
11585 E. 53rd Ave(d)	Denver, CO		1,770		10,030		945			1,780		10,965		12,745		1,918		2001		(m	)
10500 East 54th Ave(e)	Denver, CO		1,253		7,098		892			1,260		7,983		9,242		1,688		2001		(m	)
8835 W. 116th Street	Broomfield, CO		1,151		6,523		975			1,304		7,345		8,649		934		2003		(m	)
3101-3151 S. Platte River Dr.	Englewood, CO		2,500		8,549		168			2,504		8,713		11,217		1,104		2004		(m	)
3155-3199 S. Platte River Dr.	Englewood, CO		1,700		7,787		1,413			1,702		9,198		10,900		1,007		2004		(m	)
3201-3273 S. Platte River Dr.	Englewood, CO		1,600		6,592		167			1,602		6,757		8,359		982		2004		(m	)
18150 E. 32nd Street	Aurora, CO		563		3,188		1,033			572		4,212		4,784		1,116		2004		(m	)
8820 W. 116th Street	Broomfield, CO		338		1,918		392			372		2,275		2,647		322		2003		(m	)
7005 East 46th Avenue	Denver, CO		512		2,025		19			517		2,039		2,556		183		2005		(m	)
Hilltop Business Center I — Bldg. B	Littleton, CO		739		—		3,500			781		3,457		4,239		693		2000		(m	)
Jeffco Business Center A	Broomfield, CO		312		—		1,382			370		1,324		1,694		199		2001		(m	)
Park Centre A	Westminister, CO		441		—		4,282			441		4,281		4,723		1,105		2000		(m	)
Park Centre B	Westminister, CO		374		—		2,986			374		2,986		3,360		634		2000		(m	)
Park Centre C	Westminister, CO		374		—		2,876			374		2,876		3,250		549		2000		(m	)
Park Centre D	Westminister, CO		441		—		3,737			441		3,737		4,178		764		2001		(m	)
4001 Salazar Way	Frederick, CO		1,271		6,577		(43	)		1,276		6,529		7,805		504		2006		(m	)
1690 S. Abilene	Aurora, CO		406		2,814		83			411		2,892		3,302		230		2006		(m	)
9586 Interstate 25 East Frontage	Longmont, CO		898		5,038		377			967		5,346		6,313		667		2005		(m	)
555 Corporate Circle	Golden, CO		397		2,673		(62	)		448		2,561		3,009		171		2006		(m	)
Detroit
238 Executive Drive	Troy, MI		52		173		554			100		679		779		623		1994		(m	)
301 Executive Drive	Troy, MI		71		293		731			133		962		1,095		859		1994		(m	)
449 Executive Drive	Troy, MI		125		425		1,030			218		1,362		1,580		1,145		1994		(m	)
501 Executive Drive	Troy, MI		71		236		678			129		856		985		529		1994		(m	)
451 Robbins Drive	Troy, MI		96		448		961			192		1,313		1,505		1,106		1994		(m	)
1095 Crooks Road	Troy, MI		331		1,017		2,216			360		3,204		3,564		1,359		1994		(m	)
1416 Meijer Drive	Troy, MI		94		394		496			121		863		984		563		1994		(m	)
1624 Meijer Drive	Troy, MI		236		1,406		940			373		2,209		2,582		1,472		1994		(m	)
1972 Meijer Drive	Troy, MI		315		1,301		738			372		1,982		2,354		1,268		1994		(m	)
1621 Northwood Drive	Troy, MI		85		351		954			215		1,176		1,390		1,075		1994		(m	)
1707 Northwood Drive	Troy, MI		95		262		1,310			239		1,428		1,667		967		1994		(m	)
1788 Northwood Drive	Troy, MI		50		196		549			103		692		795		568		1994		(m	)
1821 Northwood Drive	Troy, MI		132		523		756			220		1,192		1,411		1,099		1994		(m	)

S-7

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
1826 Northwood Drive	Troy, MI		55		208		394		103		554		657		520		1994		(m	)
1864 Northwood Drive	Troy, MI		57		190		437		107		577		684		541		1994		(m	)
2277 Elliott Avenue	Troy, MI		48		188		501		104		633		737		545		1994		(m	)
2451 Elliott Avenue	Troy, MI		78		319		766		164		999		1,163		896		1994		(m	)
2730 Research Drive	Rochester Hills, MI		903		4,215		800		903		5,015		5,918		3,012		1994		(m	)
2791 Research Drive	Rochester Hills, MI		557		2,731		719		560		3,447		4,007		1,854		1994		(m	)
2871 Research Drive	Rochester Hills, MI		324		1,487		647		327		2,131		2,458		1,057		1994		(m	)
3011 Research Drive	Rochester Hills, MI		457		2,104		406		457		2,510		2,967		1,546		1994		(m	)
2870 Technology Drive	Rochester Hills, MI		275		1,262		284		279		1,541		1,821		934		1994		(m	)
2900 Technology Drive	Rochester Hills, MI		214		977		534		219		1,506		1,725		792		1994		(m	)
2930 Technology Drive	Rochester Hills, MI		131		594		380		138		966		1,105		493		1994		(m	)
2950 Technology Drive	Rochester Hills, MI		178		819		353		185		1,165		1,350		591		1994		(m	)
23014 Commerce Drive	Farmington Hills, MI		39		203		169		56		355		411		242		1994		(m	)
23028 Commerce Drive	Farmington Hills, MI		98		507		247		125		727		852		492		1994		(m	)
23035 Commerce Drive	Farmington Hills, MI		71		355		262		93		596		688		405		1994		(m	)
23042 Commerce Drive	Farmintgon Hills, MI		67		277		311		89		565		655		382		1994		(m	)
23065 Commerce Drive	Farmington Hills, MI		71		408		207		93		593		686		378		1994		(m	)
23070 Commerce Drive	Farmington Hills, MI		112		442		398		125		827		952		559		1994		(m	)
23079 Commerce Drive	Farmington Hills, MI		68		301		316		79		605		685		387		1994		(m	)
23093 Commerce Drive	Farmington Hills, MI		211		1,024		844		295		1,784		2,079		1,214		1994		(m	)
23135 Commerce Drive	Farmington Hills, MI		146		701		295		158		984		1,142		591		1994		(m	)
23163 Commerce Drive	Farmington Hills, MI		111		513		342		138		828		966		491		1994		(m	)
23177 Commerce Drive	Farmington Hills, MI		175		1,007		573		254		1,501		1,755		924		1994		(m	)
23206 Commerce Drive	Farmington Hills, MI		125		531		350		137		868		1,006		550		1994		(m	)
23370 Commerce Drive	Farmington Hills, MI		59		233		308		66		534		600		391		1994		(m	)
32450 N Avis Drive	Madison Heights, MI		281		1,590		193		286		1,778		2,064		514		1996		(m	)
12707 Eckles Road	Plymouth Township, MI		255		1,445		140		267		1,573		1,840		442		1996		(m	)
9300-9328 Harrison Rd	Romulus, MI		147		834		336		154		1,162		1,317		346		1996		(m	)
9330-9358 Harrison Rd	Romulus, MI		81		456		295		85		747		832		196		1996		(m	)
28420-28448 Highland Rd	Romulus, MI		143		809		190		149		993		1,142		311		1996		(m	)
28450-28478 Highland Rd	Romulus, MI		81		461		313		85		771		856		245		1996		(m	)
28421-28449 Highland Rd	Romulus, MI		109		617		386		114		998		1,112		270		1996		(m	)
28451-28479 Highland Rd	Romulus, MI		107		608		309		112		912		1,024		236		1996		(m	)
28825-28909 Highland Rd	Romulus, MI		70		395		313		73		705		778		180		1996		(m	)
28933-29017 Highland Rd	Romulus, MI		112		634		289		117		919		1,036		226		1996		(m	)
28824-28908 Highland Rd	Romulus, MI		134		760		234		140		987		1,128		276		1996		(m	)
28932-29016 Highland Rd	Romulus, MI		123		694		330		128		1,019		1,147		321		1996		(m	)
9710-9734 Harrison Rd	Romulus, MI		125		706		142		130		842		973		263		1996		(m	)
9740-9772 Harrison Rd	Romulus, MI		132		749		164		138		906		1,044		273		1996		(m	)
9840-9868 Harrison Rd	Romulus, MI		144		815		146		151		954		1,105		285		1996		(m	)
9800-9824 Harrison Rd	Romulus, MI		117		664		126		123		785		907		218		1996		(m	)
29265-29285 Airport Dr	Romulus, MI		140		794		254		147		1,042		1,188		297		1996		(m	)
29185-29225 Airport Dr	Romulus, MI		140		792		302		146		1,088		1,234		286		1996		(m	)

S-8

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
29149-29165 Airport Dr	Romulus, MI		216		1,225		379		226		1,594		1,820		464		1996		(m	)
29101-29115 Airport Dr	Romulus, MI		130		738		292		136		1,024		1,160		305		1996		(m	)
29031-29045 Airport Dr	Romulus, MI		124		704		144		130		842		972		257		1996		(m	)
29050-29062 Airport Dr	Romulus, MI		127		718		101		133		813		946		229		1996		(m	)
29120-29134 Airport Dr	Romulus, MI		161		912		244		169		1,149		1,317		306		1996		(m	)
29200-29214 Airport Dr	Romulus, MI		170		963		281		178		1,236		1,414		353		1996		(m	)
9301-9339 Middlebelt Rd	Romulus, MI		124		703		284		130		981		1,111		266		1996		(m	)
26980 Trolley Industrial Drive	Taylor, MI		450		2,550		1,019		463		3,556		4,019		1,035		1997		(m	)
32975 Capitol Avenue	Livonia, MI		135		748		332		144		1,071		1,215		295		1998		(m	)
2725 S. Industrial Highway	Ann Arbor, MI		660		3,654		484		704		4,094		4,798		978		1998		(m	)
32920 Capitol Avenue	Livonia, MI		76		422		88		82		504		586		124		1998		(m	)
11923 Brookfield Avenue	Livonia, MI		120		665		495		128		1,151		1,280		484		1998		(m	)
11965 Brookfield Avenue	Livonia, MI		120		665		67		128		724		852		174		1998		(m	)
13405 Stark Road	Livonia, MI		46		254		136		49		387		436		119		1998		(m	)
1170 Chicago Road	Troy, MI		249		1,380		256		266		1,618		1,885		373		1998		(m	)
1200 Chicago Road	Troy, MI		268		1,483		274		286		1,739		2,025		398		1998		(m	)
450 Robbins Drive	Troy, MI		166		920		272		178		1,180		1,358		270		1998		(m	)
1230 Chicago Road	Troy, MI		271		1,498		156		289		1,636		1,925		391		1998		(m	)
12886 Westmore Avenue	Livonia, MI		190		1,050		194		202		1,232		1,434		290		1998		(m	)
12898 Westmore Avenue	Livonia, MI		190		1,050		235		202		1,273		1,475		324		1998		(m	)
33025 Industrial Road	Livonia, MI		80		442		130		85		567		652		158		1998		(m	)
47711 Clipper Street	Plymouth Township, MI		539		2,983		265		575		3,212		3,787		772		1998		(m	)
32975 Industrial Road	Livonia, MI		160		887		343		171		1,219		1,390		356		1998		(m	)
32985 Industrial Road	Livonia, MI		137		761		149		147		900		1,047		219		1998		(m	)
32995 Industrial Road	Livonia, MI		160		887		186		171		1,062		1,233		274		1998		(m	)
12874 Westmore Avenue	Livonia, MI		137		761		239		147		990		1,137		263		1998		(m	)
33067 Industrial Road	Livonia, MI		160		887		305		171		1,181		1,352		301		1998		(m	)
1775 Bellingham	Troy, MI		344		1,902		297		367		2,176		2,543		502		1998		(m	)
1785 East Maple	Troy, MI		92		507		159		98		660		758		146		1998		(m	)
1807 East Maple	Troy, MI		321		1,775		359		342		2,113		2,455		479		1998		(m	)
980 Chicago	Troy, MI		206		1,141		176		220		1,303		1,523		297		1998		(m	)
1840 Enterprise Drive	Rochester Hills, MI		573		3,170		347		611		3,479		4,090		835		1998		(m	)
1885 Enterprise Drive	Rochester Hills, MI		209		1,158		134		223		1,278		1,501		305		1998		(m	)
1935-55 Enterprise Drive	Rochester Hills, MI		1,285		7,144		701		1,371		7,759		9,130		1,883		1998		(m	)
5500 Enterprise Court	Warren, MI		675		3,737		500		721		4,191		4,912		992		1998		(m	)
750 Chicago Road	Troy, MI		323		1,790		472		345		2,240		2,585		586		1998		(m	)
800 Chicago Road	Troy, MI		283		1,567		540		302		2,087		2,390		674		1998		(m	)
850 Chicago Road	Troy, MI		183		1,016		262		196		1,265		1,461		295		1998		(m	)
2805 S. Industrial Highway	Ann Arbor, MI		318		1,762		478		340		2,218		2,558		570		1998		(m	)
6833 Center Drive	Sterling Heights, MI		467		2,583		218		493		2,775		3,268		683		1998		(m	)
32201 North Avis Drive	Madison Heights, MI		345		1,911		476		349		2,383		2,732		776		1998		(m	)
1100 East Mandoline Road	Madison Heights, MI		888		4,915		1,262		897		6,168		7,066		1,590		1998		(m	)
30081 Stephenson Highway	Madison Heights, MI		271		1,499		399		274		1,895		2,169		485		1998		(m	)

S-9

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
1120 John A. Papalas Drive(e)	Lincold Park, MI		366		3,241		949		469		4,087		4,556		977		1998		(m	)
4872 S. Lapeer Road	Lake Orion Twsp, MI		1,342		5,441		2,200		1,412		7,571		8,983		2,448		1999		(m	)
1400 Allen Drive	Troy, MI		209		1,154		243		212		1,394		1,606		235		2000		(m	)
1408 Allen Drive	Troy, MI		151		834		171		153		1,003		1,156		271		2000		(m	)
1305 Stephenson Hwy	Troy, MI		345		1,907		231		350		2,133		2,483		366		2000		(m	)
32505 Industrial Drive	Madison Heights, MI		345		1,910		418		351		2,322		2,673		560		2000		(m	)
1799-1813 Northfield Drive(d)	Rochester Hills, MI		481		2,665		254		490		2,910		3,400		530		2000		(m	)
32200 N. Avis	Madison Heights, MI		503		3,367		1,225		503		4,592		5,095		261		2005		(m	)
100 Kay Industrial	Orion, MI		677		2,018		403		685		2,414		3,098		460		2005		(m	)
1849 West Maple Road	Troy, MI		1,688		2,790		30		1,700		2,808		4,508		302		2005		(m	)
42555 Merrill Road	Sterling Heights, MI		1,080		2,300		3,702		1,090		5,992		7,082		459		2006		(m	)
28435 Automation Blvd.	Wixom, MI		621				3,804		628		3,797		4,425		337		2004		(m	)
2441 N. Opdyke Road	Auburn Hills, MI		530		737		16		538		745		1,283		82		2006		(m	)
200 Northpointe Drive	Orion Township, MI		723		2,063		36		734		2,088		2,822		134		2006		(m	)
32500 Capitol Avenue	Livonia, MI		258		1,032		275		260		1,305		1,565		65		2005		(m	)
32650 Capitol Avenue	Livonia, MI		282		1,128		54		284		1,181		1,464		79		2005		(m	)
11800 Sears Drive	Livonia, MI		693		1,507		1,240		703		2,737		3,440		464		2005		(m	)
1099 Church Road	Troy, MI		702		1,332		45		721		1,358		2,079		274		2005		(m	)
Houston
2102-2314 Edwards Street	Houston, TX		348		1,973		1,436		382		3,375		3,757		731		1997		(m	)
3351 Rauch St	Houston, TX		272		1,541		203		278		1,738		2,016		425		1997		(m	)
3851 Yale St	Houston, TX		413		2,343		639		425		2,971		3,395		839		1997		(m	)
3337-3347 Rauch Street	Houston, TX		227		1,287		215		233		1,498		1,730		365		1997		(m	)
8505 N Loop East	Houston, TX		439		2,489		741		449		3,220		3,670		816		1997		(m	)
4749-4799 Eastpark Dr	Houston, TX		594		3,368		987		611		4,339		4,949		1,097		1997		(m	)
4851 Homestead Road	Houston, TX		491		2,782		874		504		3,642		4,147		892		1997		(m	)
3365-3385 Rauch Street	Houston, TX		284		1,611		517		290		2,122		2,412		439		1997		(m	)
5050 Campbell Road	Houston, TX		461		2,610		388		470		2,988		3,458		746		1997		(m	)
4300 Pine Timbers	Houston, TX		489		2,769		597		499		3,355		3,854		857		1997		(m	)
2500-2530 Fairway Park Drive	Houston, TX		766		4,342		753		792		5,069		5,861		1,310		1997		(m	)
6550 Longpointe	Houston, TX		362		2,050		549		370		2,591		2,961		664		1997		(m	)
1815 Turning Basin Dr	Houston, TX		487		2,761		581		531		3,298		3,829		821		1997		(m	)
1819 Turning Basin Dr	Houston, TX		231		1,308		571		251		1,858		2,109		500		1997		(m	)
1805 Turning Basin Drive	Houston, TX		564		3,197		718		616		3,863		4,478		961		1997		(m	)
9835A Genard Road	Houston, TX		1,505		8,333		3,011		1,581		11,268		12,849		2,413		1999		(m	)
9835B Genard Road	Houston, TX		245		1,357		463		256		1,809		2,065		348		1999		(m	)
8705 City Park Loop	Houston, TX		710		2,983		933		714		3,912		4,626		590		2003		(m	)
11505 State Highway 225	LaPorte City, TX		940		4,675		615		940		5,290		6,230		529		2005		(m	)
6955 Portwest Drive	Houston, TX		314		1,686		354		320		2,033		2,354		196		2005		(m	)
6925 Portwest Drive	Houston, TX		402		1,360		234		407		1,589		1,996		199		2005		(m	)
South by Southwest	Sugarland , TX		608		3,679		257		617		3,928		4,544		114		2007		(m	)
7230-7238 Wynnwood	Houston, TX		254		764		28		259		787		1,046		36		2007		(m	)
7240-7248 Wynnwood	Houston, TX		271		726		26		276		747		1,023		30		2007		(m	)

S-10

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
7250-7260 Wynnwood	Houston, TX		200		481		18			203		496		699		20		2007		(m	)
1500 E. Main	LaPorte City, TX		201		1,328		24			204		1,349		1,553		225		2005		(m	)
3300 Claymore Park Drive	Houston, TX		232		812		2			232		814		1,046		33		2007		(m	)
6400 Long Point	Houston, TX		188		898		1			188		899		1,088		60		2007		(m	)
12705 S Kirkwood Ste 100-150	Houston, TX		154		626		5			154		631		785		39		2007		(m	)
12705 S Kirkwood Ste 200-220	Houston, TX		404		1,698		52			412		1,742		2,154		123		2007		(m	)
8850 Jameel	Houston, TX		171		826		15			171		841		1,012		45		2007		(m	)
8800 Jameel	Houston, TX		163		798		—			163		798		961		59		2007		(m	)
8700 Jameel	Houston, TX		170		1,020		(4	)		170		1,016		1,186		35		2007		(m	)
8600 Jameel	Houston, TX		163		818		—			163		817		981		55		2007		(m	)
9362 Wallisville	Houston, TX		114		564		1			114		565		679		42		2007		(m	)
9366 Wallisville	Houston, TX		233		1,200		14			233		1,214		1,447		74		2007		(m	)
Indianapolis
7901 West 21st St.	Indianapolis, IN		1,048		6,027		435			1,048		6,462		7,510		1,922		1997		(m	)
1445 Brookville Way	Indianapolis, IN		459		2,603		802			476		3,389		3,865		1,100		1996		(m	)
1440 Brookville Way	Indianapolis, IN		665		3,770		1,087			685		4,838		5,523		1,473		1996		(m	)
1240 Brookville Way	Indianapolis, IN		247		1,402		349			258		1,741		1,999		530		1996		(m	)
1345 Brookville Way	Indianapolis, IN	(q)	586		3,321		904			601		4,209		4,810		1,327		1996		(m	)
1350 Brookville Way	Indianapolis, IN		205		1,161		271			212		1,425		1,636		424		1996		(m	)
1341 Sadlier Circle E Dr	Indianapolis, IN	(r)	131		743		313			136		1,050		1,187		379		1996		(m	)
1322-1438 Sadlier Circle E Dr	Indianapolis, IN	(r)	145		822		291			152		1,107		1,259		365		1996		(m	)
1327-1441 Sadlier Circle E Dr	Indianapolis, IN	(r)	218		1,234		403			225		1,630		1,854		481		1996		(m	)
1304 Sadlier Circle E Dr	Indianapolis, IN	(r)	71		405		153			75		554		629		198		1996		(m	)
1402 Sadlier Circle E Dr	Indianapolis, IN	(r)	165		934		392			171		1,320		1,491		453		1996		(m	)
1504 Sadlier Circle E Dr	Indianapolis, IN	(r)	219		1,238		289			226		1,520		1,745		415		1996		(m	)
1311 Sadlier Circle E Dr	Indianapolis, IN	(r)	54		304		106			57		406		463		120		1996		(m	)
1365 Sadlier Circle E Dr	Indianapolis, IN	(r)	121		688		289			126		972		1,098		279		1996		(m	)
1352-1354 Sadlier Circle E Dr	Indianapolis, IN	(r)	178		1,008		399			184		1,400		1,584		442		1996		(m	)
1335 Sadlier Circle E Dr	Indianapolis, IN	(r)	81		460		309			85		765		850		193		1996		(m	)
1327 Sadlier Circle E Dr	Indianapolis, IN	(r)	52		295		53			55		345		400		103		1996		(m	)
1425 Sadlier Circle E Dr	Indianapolis, IN	(r)	21		117		39			23		154		177		44		1996		(m	)
6951 E 30th St	Indianapolis, IN		256		1,449		220			265		1,659		1,924		538		1996		(m	)
6701 E 30th St	Indianapolis, IN		78		443		41			82		480		562		142		1996		(m	)
6737 E 30th St	Indianapolis, IN		385		2,181		295			398		2,462		2,860		779		1996		(m	)
1225 Brookville Way	Indianapolis, IN		60		—		458			68		450		518		113		1997		(m	)
6555 E 30th St	Indianapolis, IN		484		4,760		1,833			484		6,593		7,077		2,042		1996		(m	)
8402-8440 E 33rd St	Indianapolis, IN		222		1,260		593			230		1,845		2,075		540		1996		(m	)
8520-8630 E 33rd St	Indianapolis, IN		326		1,848		731			336		2,570		2,906		857		1996		(m	)
8710-8768 E 33rd St	Indianapolis, IN		175		993		370			187		1,350		1,537		377		1996		(m	)
3316-3346 N. Pagosa Court	Indianapolis, IN		325		1,842		583			335		2,415		2,750		794		1996		(m	)
6751 E 30th St	Indianapolis, IN		728		2,837		277			741		3,101		3,842		835		1997		(m	)
8525 E. 33rd Street	Indianapolis, IN		1,300		2,091		687			1,308		2,771		4,078		492		2003		(m	)
5705-97 Park Plaza Ct	Indianapolis, IN	(s)	600		2,194		792			609		2,977		3,586		797		2003		(m	)

S-11

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
9319-9341 Castlegate Drive	Indianapolis, IN		530		1,235		1,001			544		2,222		2,766		512		2003		(m	)
9332-9350 Castlegate Drive	Indianapolis, IN		420		646		662			429		1,299		1,728		391		2003		(m	)
1133 Northwest L Street	Richmond, IN	(t)	201		1,358		51			208		1,403		1,611		299		2006		(m	)
1380 Perry Road	Plainfield, IN		781		5,156		35			785		5,187		5,972		543		2005		(m	)
9210 East 146th Street	Noblesville, IN		66		684		818			66		1,502		1,568		596		1998		(m	)
Helmer Spec BTS — 1	Noblesville, IN		547		—		4,701			628		4,619		5,248		13		2007		(m	)
Genco BTS	Indianapolis, IN		886		—		6,819			1,037		6,668		7,705		—		2007		(m	)
Inland Empire
3411 N Perris Blvd	Riverside, CA		8,125		7,150		68			8,166		7,177		15,343		390		2007		(m	)
100 W Sinclair	Riverside, CA		6,042		4,298		44			6,072		4,313		10,384		180		2007		(m	)
Los Angeles
350-390 Manville St.	Compton, CA		2,300		3,768		103			2,313		3,857		6,171		558		2004		(m	)
1944 Vista Bella Way	Rancho Dominguez, CA		1,746		3,148		646			1,821		3,719		5,540		415		2005		(m	)
2000 Vista Bella Way	Rancho Dominguez, CA		817		1,673		294			852		1,932		2,784		211		2005		(m	)
2835 East Ana Street Drive	Rancho Dominguez, CA		1,682		2,750		134			1,770		2,796		4,566		360		2005		(m	)
665 N. Baldwin Park Blvd	City of Industry, CA		2,124		5,219		(135	)		2,139		5,069		7,208		284		2006		(m	)
27801 Avenue Scott	Santa Clarita, CA		2,890		7,020		469			2,902		7,476		10,379		353		2006		(m	)
2610 & 2660 Columbia Street	Torrance, CA		3,008		5,826		(71	)		3,031		5,732		8,763		223		2006		(m	)
433 Alaska Avenue	Torrance, CA		681		168		5			684		170		854		29		2006		(m	)
21730-21748 Marilla Street	Chatsworth, CA		2,585		3,210		90			2,608		3,277		5,885		130		2007		(m	)
8015 Paramount	Pico Riviera, CA		3,616		3,902		51			3,653		3,916		7,569		135		2007		(m	)
3365 E. Slauson	Los Angeles, CA		2,367		3,243		37			2,393		3,254		5,647		118		2007		(m	)
3015 E Ana & 18744 Reyes	Los Angeles, CA		19,678		9,321		655			20,140		9,514		29,654		677		2007		(m	)
19067 Reyes Ave	Rancho Dominguez, CA		9,281		3,920		107			9,373		3,936		13,308		104		2007		(m	)
1250 Rancho Conejo Blvd	Thousand Oaks, CA		1,435		779		8			1,440		782		2,222		15		2007		(m	)
1260 Rancho Conejo Blvd	Thousand Oaks, CA		1,353		722		9			1,358		726		2,084		13		2007		(m	)
1270 Rancho Conejo Blvd	Thousand Oaks, CA		1,224		716		7			1,229		719		1,947		17		2007		(m	)
1280 Rancho Conejo Blvd	Thousand Oaks, CA		2,043		3,408		19			2,050		3,420		5,470		57		2007		(m	)
1290 Rancho Conejo Blvd	Thousand Oaks, CA		1,754		2,949		17			1,760		2,959		4,720		49		2007		(m	)
4020 S. Compton Ave	Los Angeles, CA		3,800		7,330		71			3,825		7,376		11,201		326		2006		(m	)
500 N Nash St	El Segundo, CA		1,189		3,167		99			1,198		3,257		4,455		65		2007		(m	)
4790 Valley Blvd	Los Angeles, CA		960		3,840		33			966		3,866		4,833		26		2007		(m	)
Louisville
Penske BTS	Louisville, KY		2,074		—		9,639			2,079		9,634		11,713		172		2007		(m	)
Miami
4700 NW 15th Ave	Ft.Lauderdale, FL		908		1,883		57			912		1,936		2,848		94		2007		(m	)
4710 NW 15th Ave	Ft.Lauderdale, FL		830		2,722		54			834		2,772		3,606		109		2007		(m	)
4720 NW 15th Ave	Ft.Lauderdale, FL		937		2,455		72			942		2,523		3,464		141		2007		(m	)
4740 NW 15th Ave	Ft.Lauderdale, FL		1,107		3,111		70			1,112		3,176		4,288		198		2007		(m	)
4750 NW 15th Ave	Ft.Lauderdale, FL		947		3,079		82			951		3,157		4,108		122		2007		(m	)
4800 NW 15th Ave	Ft.Lauderdale, FL		1,092		3,308		140			1,097		3,443		4,540		141		2007		(m	)
Smurfit Container	Medley, FL		857		3,428		181			864		3,602		4,466		24		2007		(m	)

S-12

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
Milwaukee
6523 N Sydney Place	Glendale, WI		172		976		349		176		1,322		1,498		362		1995		(m	)
4560 N 124th Street	Wauwatosa, WI		118		667		85		129		741		870		196		1997		(m	)
4410-80 North 132nd Street	Butler, WI		355		—		3,967		359		3,963		4,322		721		1999		(m	)
5355 South Westridge Drive	New Berlin, WI		1,630		7,058		94		1,646		7,136		8,782		798		2004		(m	)
320-34 W. Vogel	Milwaukee, WI		506		3,199		73		508		3,270		3,778		581		2005		(m	)
4950 S. 6th Avenue	Milwaukee, WI		299		1,565		85		301		1,648		1,949		357		2005		(m	)
1711 Paramount Court	Waukesha, WI		308		1,762		19		311		1,778		2,089		199		2005		(m	)
W 140 N9059 Lilly Road	Iomonee Falls, WI		343		1,153		242		366		1,372		1,738		196		2005		(m	)
200 W. Vogel Ave., Bldg B	Milwaukee, WI		301		2,150		13		302		2,162		2,464		349		2005		(m	)
16600 West Glendale Avenue	New Berlin, WI		704		1,923		372		715		2,284		2,999		314		2006		(m	)
4921 S. 2nd Street	Milwaukee, WI		101		713		2		101		715		816		106		2005		(m	)
1500 Peebles Drive	Richland Center, WI		1,577		1,018		35		1,603		1,027		2,630		639		2005		(m	)
2905 S 160th Street	New Berlin, WI		261		672		18		265		686		951		23		2007		(m	)
2855 S 160th Street	New Berlin, WI		221		628		23		225		647		872		22		2007		(m	)
2485 Commerce Drive	New Berlin, WI		483		1,516		20		491		1,528		2,019		41		2007		(m	)
14518 Whittaker Way	New Berlin, WI		437		1,082		62		445		1,135		1,581		42		2007		(m	)
Minneapolis/St. Paul
6507-6545 Cecilia Circle	Bloomington, MN		357		1,320		1,257		386		2,548		2,934		1,541		1994		(m	)
6201 West 111th Street	Bloomington, MN	(u)	1,358		8,622		4,421		1,499		12,903		14,401		6,819		1994		(m	)
6403-6545 Cecilia Drive	Bloomington, MN		366		1,363		1,168		395		2,502		2,897		1,603		1994		(m	)
7251-7267 Washington Avenue	Edina, MN		129		382		710		182		1,038		1,221		792		1994		(m	)
7301-7325 Washington Avenue	Edina, MN		174		391		84		193		456		649		193		1994		(m	)
7101 Winnetka Avenue North	Brooklyn Park, MN		2,195		6,084		4,126		2,228		10,177		12,405		5,465		1994		(m	)
7600 Golden Triangle Drive	Eden Prairie, MN		566		1,394		1,894		615		3,240		3,854		1,668		1994		(m	)
9901 West 74th Street	Eden Prairie, MN		621		3,289		3,283		639		6,554		7,193		3,810		1994		(m	)
1030 Lone Oak Road	Eagan, MN		456		2,703		563		456		3,266		3,721		1,048		1994		(m	)
1060 Lone Oak Road	Eagan, MN		624		3,700		717		624		4,417		5,042		1,519		1994		(m	)
5400 Nathan Lane	Plymouth, MN		749		4,461		1,167		757		5,620		6,377		2,054		1994		(m	)
10120 W 76th Street	Eden Prairie, MN		315		1,804		1,025		315		2,828		3,144		1,257		1995		(m	)
7615 Golden Triangle	Eden Prairie, MN		268		1,532		785		268		2,316		2,584		716		1995		(m	)
7625 Golden Triangle	Eden Prairie, MN		415		2,375		1,032		415		3,407		3,822		1,117		1995		(m	)
12155 Nicollet Ave	Burnsville, MN		286		—		1,731		288		1,729		2,017		528		1995		(m	)
4100 Peavey Road	Chaska, MN		277		2,261		830		277		3,091		3,368		861		1996		(m	)
11300 Hamshire Ave South	Bloomington, MN		527		2,985		1,469		541		4,440		4,981		1,092		1996		(m	)
5205 Highway 169	Plymouth, MN		446		2,525		1,002		740		3,232		3,972		886		1996		(m	)
6451-6595 Citywest Parkway	Eden Prairie, MN		525		2,975		1,347		538		4,309		4,847		1,265		1996		(m	)
7100-7198 Shady Oak Road	Eden Prairie, MN		715		4,054		1,254		736		5,288		6,023		1,831		1996		(m	)
7500-7546 Washington Square	Eden Prairie, MN		229		1,300		776		235		2,071		2,306		585		1996		(m	)
7550-7558 Washington Square	Eden Prairie, MN		153		867		171		157		1,034		1,191		270		1996		(m	)
5240-5300 Valley Industrial Blvd S	Shakopee, MN		362		2,049		1,005		371		3,044		3,415		965		1996		(m	)
7102 Winnetka Ave. North	Brooklyn Park, MN		1,275		—		6,505		1,337		6,443		7,780		25		2007		(m	)

S-13

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
6477-6525 City West Parkway	Eden Prairie, MN		810		4,590		1,049			819		5,629		6,449		1,558		1997		(m	)
1157 Valley Park Drive	Shakopee, MN		760		—		6,192			888		6,064		6,952		1,247		1999		(m	)
500-530 Kasota Avenue SE	Minneapolis, MN		415		2,354		894			432		3,231		3,664		924		1998		(m	)
770-786 Kasota Avenue SE	Minneapolis, MN		333		1,888		510			347		2,383		2,730		561		1998		(m	)
800 Kasota Avenue SE	Minneapolis, MN		524		2,971		921			597		3,819		4,416		971		1998		(m	)
2530-2570 Kasota Avenue	St. Paul, MN		407		2,308		841			465		3,091		3,556		804		1998		(m	)
1280 Energy Park Drive	St. Paul, MN		700		2,779		23			705		2,797		3,502		387		2004		(m	)
9600 West 76th Street	Eden Prairie, MN		1,000		2,450		47			1,034		2,462		3,497		281		2004		(m	)
9700 West 76th Street	Eden Prairie, MN		1,000		2,709		145			1,038		2,815		3,854		295		2004		(m	)
5017 Boone Avenue North	New Hope, MN	(v)	1,000		1,599		58			1,009		1,648		2,657		407		2005		(m	)
2300 West Highway 13(I-35 Dist Ctr)	Burnsville, MN		2,517		6,069		604			2,524		6,665		9,190		2,072		2005		(m	)
1087 Park Place	Shakopee, MN		1,195		4,891		15			1,198		4,903		6,101		634		2005		(m	)
5391 12th Avenue SE	Shakopee, MN		1,392		8,149		185			1,395		8,331		9,726		943		2005		(m	)
4701 Valley Industrial Boulevard	Shakopee, MN		1,296		7,157		(81	)		1,299		7,073		8,372		886		2005		(m	)
Park 2000 III	Shakopee, MN		590		—		5,619			590		5,619		6,209		802		1998		(m	)
7600 69th Avenue	Greenfield, MN		1,500		8,328		1,808			1,510		10,126		11,636		1,310		2004		(m	)
316 Lake Hazeltine Drive	Chaska, MN		714		944		166			729		1,095		1,824		187		2006		(m	)
1225 Highway 169 North	Plymouth, MN		1,190		1,979		59			1,207		2,022		3,228		191		2006		(m	)
9200 10th Ave	Golden Valley, MN		892		2,306		(5	)		902		2,291		3,193		155		2007		(m	)
Nashville
3099 Barry Drive	Portland, TN		418		2,368		121			421		2,486		2,907		697		1996		(m	)
3150 Barry Drive	Portland, TN		941		5,333		520			981		5,813		6,794		1,605		1996		(m	)
5599 Highway 31 West	Portland, TN		564		3,196		131			571		3,320		3,891		919		1996		(m	)
1650 Elm Hill Pike	Nashville, TN		329		1,867		265			332		2,129		2,461		550		1997		(m	)
1931 Air Lane Drive	Nashville, TN		489		2,785		272			493		3,053		3,546		820		1997		(m	)
4640 Cummings Park	Nashville, TN		360		2,040		210			365		2,245		2,610		450		1999		(m	)
1740 River Hills Drive	Nashville, TN		848		4,383		572			888		4,915		5,803		954		2005		(m	)
Royal Park Business Center — 211 Ellery Ct	Nashville, TN		606		3,192		107			616		3,289		3,905		83		2007		(m	)
Northern New Jersey
14 World’s Fair Drive	Franklin, NJ		483		2,735		605			503		3,320		3,823		926		1997		(m	)
12 World’s Fair Drive	Franklin, NJ		572		3,240		538			593		3,756		4,349		1,038		1997		(m	)
22 World’s Fair Drive	Franklin, NJ		364		2,064		469			375		2,522		2,897		612		1997		(m	)
26 World’s Fair Drive	Franklin, NJ		361		2,048		357			377		2,388		2,766		635		1997		(m	)
24 World’s Fair Drive	Franklin, NJ		347		1,968		525			362		2,478		2,840		671		1997		(m	)
20 World’s Fair Drive Lot 13	Sumerset, NJ		9		—		2,549			691		1,867		2,558		342		1999		(m	)
45 Route 46	Pine Brook, NJ		969		5,491		811			978		6,293		7,271		1,242		2000		(m	)
43 Route 46	Pine Brook, NJ		474		2,686		387			479		3,069		3,547		686		2000		(m	)
39 Route 46	Pine Brook, NJ		260		1,471		223			262		1,691		1,953		339		2000		(m	)
26 Chapin Road	Pine Brook, NJ		956		5,415		583			965		5,988		6,953		1,135		2000		(m	)
30 Chapin Road	Pine Brook, NJ		960		5,440		770			969		6,201		7,170		1,226		2000		(m	)
20 Hook Mountain Road	Pine Brook, NJ		1,507		8,542		2,650			1,534		11,166		12,700		1,847		2000		(m	)
30 Hook Mountain Road	Pine Brook, NJ		389		2,206		368			396		2,567		2,963		509		2000		(m	)
55 Route 46	Pine Brook, NJ		396		2,244		239			403		2,476		2,879		486		2000		(m	)

S-14

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation					Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
16 Chapin Road	Pine Brook, NJ		885		5,015		375			901		5,375		6,275		1,049		2000		(m	)
20 Chapin Road	Pine Brook, NJ		1,134		6,426		300			1,154		6,706		7,860		1,068		2000		(m	)
Sayreville Lot 3	Sayreville, NJ		996		—		5,315			996		5,315		6,311		458		2003		(m	)
Sayreville Lot 4	Sayreville, NJ		944		—		4,749			944		4,749		5,693		713		2002		(m	)
400 Raritan Center Parkway	Edison, NJ		829		4,722		525			851		5,226		6,077		851		2001		(m	)
300 Columbus Circle	Edison, NJ		1,257		7,122		969			1,277		8,071		9,348		1,457		2001		(m	)
400 Apgar	Franklin Township, NJ		780		4,420		758			822		5,136		5,958		816		2002		(m	)
500 Apgar	Franklin Township, NJ		361		2,044		449			368		2,486		2,854		444		2002		(m	)
1 Pearl Ct	Allendale, NJ		623		3,528		1,305			649		4,806		5,455		688		2002		(m	)
2 Pearl Ct	Allendale, NJ		255		1,445		1,294			403		2,590		2,994		371		2002		(m	)
3 Pearl Ct	Allendale, NJ		440		2,491		259			458		2,731		3,189		354		2002		(m	)
5 Pearl Ct	Allendale, NJ		505		2,860		546			526		3,386		3,911		501		2002		(m	)
59 Route 17	Allendale, NJ		518		2,933		1,133			539		4,044		4,583		847		2002		(m	)
309-319 Pierce Street	Somerset, NJ		1,300		4,628		947			1,309		5,566		6,875		648		2004		(m	)
Philadelphia
3240 S.78th Street	Philadelphia, PA		515		1,245		71			540		1,291		1,831		135		2005		(m	)
Phoenix
1045 South Edward Drive	Tempe, AZ		390		2,160		86			394		2,242		2,636		495		1999		(m	)
46 N. 49th Ave	Phoenix, AZ		283		1,704		718			283		2,422		2,706		572		2002		(m	)
10220 S. 51st Street	Phoenix, AZ		400		1,493		184			406		1,671		2,077		245		2004		(m	)
50 South 56th Street	Chandler, AZ		1,200		3,333		(31	)		1,207		3,294		4,502		353		2004		(m	)
4701 W. Jefferson	Phoenix, AZ		926		2,195		628			929		2,820		3,749		515		2005		(m	)
7102 W. Roosevelt	Phoenix, AZ		1,613		6,451		984			1,620		7,428		9,048		418		2006		(m	)
4137 West Adams Street	Phoenix, AZ		990		2,661		146			1,033		2,764		3,797		148		2006		(m	)
245 W Lodge	Tempe, AZ		898		3,066		37			907		3,095		4,001		92		2007		(m	)
Salt Lake City
512 Lawndale Drive(i)	Salt Lake City, UT		2,705		15,749		2,924			2,705		18,672		21,377		5,382		1997		(m	)
1270 West 2320 South	West Valley, UT		138		784		203			143		983		1,126		268		1998		(m	)
1275 West 2240 South	West Valley, UT		395		2,241		473			408		2,702		3,109		755		1998		(m	)
1288 West 2240 South	West Valley, UT		119		672		147			123		816		938		254		1998		(m	)
2235 South 1300 West	West Valley, UT		198		1,120		259			204		1,373		1,577		427		1998		(m	)
1293 West 2200 South	West Valley, UT		158		896		69			163		960		1,124		231		1998		(m	)
1279 West 2200 South	West Valley, UT		198		1,120		47			204		1,161		1,365		289		1998		(m	)
1272 West 2240 South	West Valley, UT		336		1,905		247			347		2,141		2,488		514		1998		(m	)
1149 West 2240 South	West Valley, UT		217		1,232		99			225		1,324		1,549		331		1998		(m	)
1142 West 2320 South	West Valley, UT		217		1,232		88			225		1,313		1,538		337		1998		(m	)
1152 West 2240 South	West Valley, UT		2,067		—		3,549			2,114		3,503		5,617		657		2000		(m	)
369 Orange Street	Salt Lake City, UT		600		2,855		163			606		3,012		3,618		430		2003		(m	)
4625 West 1730 South	Salt Lake City, UT		903		4,005		20			907		4,021		4,928		215		2006		(m	)
1815-1957 South 4650 West	Salt Lake City, UT		1,707		10,873		170			1,713		11,037		12,750		510		2006		(m	)
2100 Alexander Street	West Valley, UT		373		1,675		(2	)		376		1,670		2,046		38		2007		(m	)
2064 Alexander Street	West Valley, UT		864		2,771		(9	)		869		2,758		3,626		76		2007		(m	)

S-15

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
Bard Access System -5425 Amelia Earhart	Salt Lake City, UT		615		2,461		43		628		2,491		3,119		8		2007		(m	)
San Diego
16275 Technology Drive	San Diego, CA		2,848		8,641		42		2,859		8,672		11,531		706		2005		(m	)
6305 El Camino Real	Carlsbad, CA		1,590		6,360		214		1,590		6,574		8,163		345		2006		(m	)
8572 Spectrum Lane	San Diego, CA		806		3,225		402		807		3,626		4,433		89		2007		(m	)
13100 Gregg St	Poway, CA		1,040		4,160		271		1,073		4,399		5,471		115		2007		(m	)
2325 Camino Vida Roble	Carlsbad, CA		1,441		1,239		42		1,446		1,276		2,722		105		2006		(m	)
2335 Camino Vida Roble	Carlsbad, CA		817		762		100		821		858		1,679		84		2006		(m	)
2345 Camino Vida Roble	Carlsbad, CA		562		456		28		565		481		1,046		51		2006		(m	)
2355 Camino Vida Roble	Carlsbad, CA		481		365		59		483		422		905		49		2006		(m	)
2365 Camino Vida Roble	Carlsbad, CA		1,098		630		9		1,102		634		1,737		86		2006		(m	)
2375 Camino Vida Roble	Carlsbad, CA		1,210		874		121		1,214		991		2,205		103		2006		(m	)
6451 El Camino Real	Carlsbad, CA		2,885		1,931		52		2,895		1,973		4,868		197		2006		(m	)
Southern New Jersey
4 Springdale Road(d)	Cherry Hill, NJ		332		1,853		1,291		332		3,144		3,476		733		1998		(m	)
8 Springdale Road	Cherry Hill, NJ		258		1,436		854		258		2,290		2,548		580		1998		(m	)
2050 Springdale Road	Cherry Hill, NJ		277		1,545		1,052		277		2,597		2,874		599		1998		(m	)
16 Springdale Road	Cherry Hill, NJ		240		1,336		134		240		1,471		1,710		350		1998		(m	)
5 Esterbrook Lane	Cherry Hill, NJ		240		1,336		236		240		1,572		1,812		368		1998		(m	)
2 Pin Oak Lane	Cherry Hill, NJ		314		1,757		810		314		2,567		2,881		658		1998		(m	)
28 Springdale Road	Cherry Hill, NJ		190		1,060		213		190		1,273		1,463		304		1998		(m	)
3 Esterbrook Lane	Cherry Hill, NJ		198		1,102		486		198		1,588		1,786		371		1998		(m	)
26 Springdale Road	Cherry Hill, NJ		226		1,257		589		226		1,846		2,072		455		1998		(m	)
1 Keystone Ave	Cherry Hill, NJ		218		1,223		963		218		2,186		2,404		515		1998		(m	)
21 Olnev Ave	Cherry Hill, NJ		68		380		75		68		455		523		106		1998		(m	)
19 Olnev Ave	Cherry Hill, NJ		200		1,119		1,130		200		2,249		2,449		483		1998		(m	)
2 Keystone Ave	Cherry Hill, NJ		214		1,194		551		214		1,746		1,959		471		1998		(m	)
18 Olnev Ave	Cherry Hill, NJ		247		1,382		515		247		1,896		2,143		418		1998		(m	)
2030 Springdale Rod	Cherry Hill, NJ		523		2,914		1,389		523		4,304		4,826		1,118		1998		(m	)
111 Whittendale Drive	Morrestown, NJ		522		2,916		130		522		3,046		3,568		636		2000		(m	)
9 Whittendale	Morrestown, NJ		337		1,911		108		343		2,013		2,356		335		2001		(m	)
7851 Airport	Pennsauken, NJ		160		508		382		163		888		1,050		210		2003		(m	)
103 Central	Mt. Laurel, NJ		610		1,847		1,542		619		3,380		3,999		855		2003		(m	)
7890 Airport Hwy/7015 Central	Pennsauken, NJ		300		989		1,062		425		1,926		2,351		714		2006		(m	)
999 Grand Avenue	Hammonton, NJ	(w)	969		8,793		713		979		9,495		10,475		1,541		2005		(m	)
600 Creek Road	Delanco, NJ		2,125		6,504		4		2,126		6,507		8,633		419		2007		(m	)
1070 Thomas Busch Memorial Hwy	Pennsauken, NJ		1,054		2,278		65		1,084		2,313		3,397		151		2007		(m	)
1601 Schlumberger Drive	Moorestown, NJ		560		2,240		272		608		2,464		3,072		61		2007		(m	)
St. Louis
10431-10449 Midwest Industrial Blvd	Olivette, MO		237		1,360		555		237		1,915		2,152		766		1994		(m	)
10751 Midwest Industrial Boulevard	Olivette, MO		193		1,119		368		194		1,487		1,681		589		1994		(m	)
6951 N Hanley(d)	Hazelwood, MO		405		2,295		1,382		419		3,663		4,082		998		1996		(m	)

S-16

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or		Gross Amount Carried
			(b)			Completion		At Close of Period 12/31/07						Accumulated
	Location	(a)	Initial Cost			and Valuation				Building and				Depreciation		Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision		Land		Improvements		Total		12/31/07		Constructed		Lives (Years)
	(Dollars in thousands)
1037 Warson — Bldg A	St. Louis, MO		246		1,359		623		251		1,977		2,228		260		2002		(m	)
1037 Warson — Bldg B	St. Louis, MO		380		2,103		1,730		388		3,825		4,212		487		2002		(m	)
1037 Warson — Bldg C	St. Louis, MO		303		1,680		1,224		310		2,897		3,207		447		2002		(m	)
1037 Warson — Bldg D	St. Louis, MO		353		1,952		766		360		2,711		3,071		341		2002		(m	)
6821-6857 Hazelwood Ave	Berkeley, MO		985		6,205		775		985		6,979		7,965		1,073		2003		(m	)
13701 Rider Trail North	Earth City, MO		800		2,099		653		804		2,748		3,552		545		2003		(m	)
1908-2000 Innerbelt(d)	Overland, MO		1,590		9,026		1,057		1,591		10,083		11,673		1,951		2004		(m	)
8449-95 Mid-County Industrial	Vinita Park, MO		520		1,590		222		520		1,812		2,332		384		2004		(m	)
84104-76 Mid County Industrial	Vinita Park, MO		540		2,109		132		540		2,241		2,781		440		2004		(m	)
2001 Innerbelt Business Center	Overland, MO		1,050		4,451		256		1,050		4,707		5,757		910		2004		(m	)
9060 Latty Avenue	Berkeley, MO		687		1,947		43		694		1,984		2,678		480		2006		(m	)
21-25 Gateway Commerce Center	Edwardsville, IL	(x)	1,874		31,958		371		1,928		32,275		34,203		1,230		2006		(m	)
Cenveno Building — 601 Cannonball	O’Fallon, MO		584		2,336		34		595		2,359		2,954		8		2007		(m	)
Tampa
5313 Johns Road	Tampa, FL		204		1,159		219		257		1,325		1,582		342		1997		(m	)
5525 Johns Road	Tampa, FL		192		1,086		435		200		1,513		1,713		357		1997		(m	)
5709 Johns Road	Tampa, FL		192		1,086		168		200		1,246		1,446		332		1997		(m	)
5711 Johns Road	Tampa, FL		243		1,376		183		255		1,546		1,801		388		1997		(m	)
5453 W Waters Avenue	Tampa, FL		71		402		138		82		529		611		142		1997		(m	)
5455 W Waters Avenue	Tampa, FL		307		1,742		387		326		2,111		2,436		537		1997		(m	)
5553 W Waters Avenue	Tampa, FL		307		1,742		267		326		1,990		2,316		517		1997		(m	)
5501 W Waters Avenue	Tampa, FL		154		871		133		142		1,015		1,157		290		1997		(m	)
5503 W Waters Avenue	Tampa, FL		71		402		41		66		449		514		118		1997		(m	)
5555 W Waters Avenue	Tampa, FL		213		1,206		143		221		1,340		1,562		369		1997		(m	)
5557 W Waters Avenue	Tampa, FL		59		335		47		62		379		442		100		1997		(m	)
5461 W Waters	Tampa, FL		261		—		1,406		265		1,402		1,667		297		1998		(m	)
5481 W. Waters Avenue	Tampa, FL		558		—		2,283		561		2,280		2,841		492		1999		(m	)
4515-4519 George Road	Tampa, FL		633		3,587		636		640		4,216		4,856		743		2001		(m	)
6089 Johns Road	Tampa, FL	(y)	180		987		104		186		1,086		1,271		166		2004		(m	)
6091 Johns Road	Tampa, FL	(y)	140		730		51		144		777		921		107		2004		(m	)
6103 Johns Road	Tampa, FL	(y)	220		1,160		75		226		1,230		1,455		165		2004		(m	)
6201 Johns Road	Tampa, FL	(y)	200		1,107		88		205		1,190		1,395		176		2004		(m	)
6203 Johns Road	Tampa, FL	(y)	300		1,460		105		311		1,555		1,865		265		2004		(m	)
6205 Johns Road	Tampa, FL	(y)	270		1,363		46		278		1,402		1,679		123		2004		(m	)
6101 Johns Road	Tampa, FL		210		833		179		216		1,006		1,222		147		2004		(m	)
4908 Tampa West Blvd	Tampa, FL		2,622		8,643		36		2,635		8,666		11,301		1,072		2005		(m	)
11701 Belcher Road South	Largo, FL		1,657		2,768		314		1,669		3,070		4,739		318		2006		(m	)
4900-4914 Creekside Drive(h)	Clearwater, FL		3,702		7,338		301		3,730		7,611		11,341		718		2006		(m	)
4908 Creekside Drive	Clearwater, FL		506		645		329		509		971		1,480		82		2006		(m	)
12345 Starkey Road	Largo, FL		898		2,078		292		905		2,363		3,268		168		2006		(m	)
Toronto
114 Packham Rd — Brooks Industries	Stratford, Ontario		1,000		3,526		55		1,012		3,569		4,581		281		2007		(m	)
135 Dundas Street	Cambridge Ontario, Canada		3,128		4,958		138		3,179		5,045		8,224		1,344		2005		(m	)

S-17

						(c)
						Costs
						Capitalized
						Subsequent to
						Acquisition or			Gross Amount Carried
			(b)			Completion			At Close of Period 12/31/07								Accumulated
	Location	(a)	Initial Cost			and Valuation						Building and					Depreciation			Year Acquired/		Depreciable
Building Address	(City/State)	Encumbrances	Land	Buildings		Provision			Land			Improvements			Total		12/31/07			Constructed		Lives (Years)
	(Dollars in thousands)
678 Erie Street	Stratford Ontario, Canada		786		557		78			829			592			1,421		459			2005		(m	)
777 Bayly Street West	Ajax Ontario, Canada		7,224		13,156		4,119	(z)		8,707			15,792			24,499		971			2006		(m	)
Other
3501 Maple Street	Abilene, TX		67		1,057		1,422			266			2,280			2,546		1,140			1994		(m	)
4200 West Harry Street(e)	Wichita, KS		193		2,224		1,777			532			3,662			4,194		2,162			1994		(m	)
5050 Kendrick Court	Grand Rapids, MI		1,721		11,433		7,230			1,721			18,663			20,383		5,829			1994		(m	)
5015 52nd Street SE	Grand Rapids, MI		234		1,321		141			234			1,462			1,696		544			1994		(m	)
Lake Point IV	Orlando, FL		909		4,613		129			920			4,731			5,651		498			2005		(m	)
6266 Hurt Road	Horn Lake, MS		427		—		3,270			427			3,271			3,697		459			2004		(m	)
6266 Hurt Road Building B	Horn Lake, MS		—		—		868			99			769			868		92			2004		(m	)
7601 NW 107th Terrace	Kansas City, MO		746		4,712		50			750			4,758			5,508		987			2005		(m	)
12626 Silicon Drive	San Antonio, TX		768		3,448		22			779			3,459			4,238		432			2005		(m	)
3100 Pinson Valley Parkway	Birmingham, AL		303		742		21			310			756			1,066		84			2005		(m	)
1021 W. First Street, Hwy 93	Sumner, IA		99		2,540		20			100			2,559			2,659		365			2005		(m	)
1245 N. Hearne Avenue	Shreveport, LA		99		1,263		33			102			1,293			1,395		169			2005		(m	)
2315 NW 21st Place	Portland, OR		301		1,247		39			309			1,278			1,587		110			2005		(m	)
10330 I Street	Omaha, NE		1,808		8,340		15			1,809			8,354			10,163		1,115			2006		(m	)
Kimberly Clark BTS	Johnson County, KS		—		—		17,518			25			17,492			17,518		57			2007		(m	)
Redevelopments / Developments / Developable Land (k)			98,110		270		64,295	(z)		103,592			59,091			162,683		527
			$571,387	$	1,796,962	$	513,831		$	590,870	(l)	$	2,291,318	(l)	$	2,882,188	$	439,312	(l)

S-18

NOTES:

(a)	See description of encumbrances in Note 6 to Notes to Consolidated Financial Statements.
(b)	Initial cost for each respective property is tangible purchase price allocated in accordance with SFAS No. 141.
(c)	Improvements are net of write-off of fully depreciated assets.
(d)	Comprised of two properties.
(e)	Comprised of three properties.
(f)	Comprised of four properties.
(g)	Comprised of five properties.
(h)	Comprised of eight properties.
(i)	Comprised of 28 properties.
(j)	Not Used.
(k)	These properties represent developable land and redevelopments that have not been placed in service.
(l)

							Gross Amount
	Amounts						Carried At
	Included			Amounts Within			Close of Period
	in Real Estate			Net Investment			December 31,
	Held for Sale			in Real Estate			2007
Land	$	6,096		$	584,774		$	590,870
Buildings & Improvements		33,136			2,258,182			2,291,318
Accumulated Depreciation		(2,800	)		(436,512	)		(439,312	)
Subtotal		36,432			2,406,444			2,442,876
Construction in Progress		—			70,311			70,311
Net Investment in Real Estate		36,432			2,476,755			2,513,187
Leasing Commissions, Net, Deferred Leasing Intangibles, Net and Deferred Rent Receivable, Net		1,443
Balance Sheet at December 31, 2007	$	37,875

(m) Depreciation is computed based upon the following estimated lives:

Buildings and Improvements	8 to 50 years
Tenant Improvements, Leasehold Improvements	Life of lease

(n)	This property collateralizes a $2.8 million mortgage loan which matures on May 1, 2016.
(o)	This property collateralizes a $14.7 million mortgage loan which matures on December 1, 2010.
(p)	This property collateralizes a $5.0 million mortgage loan which matures on December 1, 2019.
(q)	This property collateralizes a $1.4 million mortgage loan which matures on January 1, 2013.
(r)	These properties collateralize a $1.1 million mortgage loan which matures on September 1, 2009.
(s)	This property collateralizes a $2.4 million mortgage loan which matures on January 1, 2012.
(t)	This property collateralizes a $1.7 million mortgage loan which matures on June 1, 2014.
(u)	This property collateralizes a $5.1 million mortgage loan which matures on December 1, 2019.
(v)	This property collateralizes a $1.8 million mortgage loan which matures on September 30, 2024.
(w)	This property collateralizes a $6.4 million mortgage loan which matures on March 1, 2011.
(x)	This property collateralizes a $13.8 million mortgage loan and a $11.7 million mortgage loan which both mature on January 1, 2014.
(y)	These properties collateralize a $5.7 million mortgage loan which matures on July 1, 2009.
(z)	Includes foreign currency translation adjustments.

S-19

At December 31, 2007, the aggregate cost of land and buildings and equipment for federal income tax purpose was approximately $2.7 billion (excluding construction in progress.)

The changes in total real estate assets, including real estate held for sale, for the three years ended December 31, 2007 are as follows:

	2007			2006			2005
	(Dollars in thousands)
Balance, Beginning of Year	$	2,938,242		$	2,914,916		$	2,537,513
Acquisition of Real Estate Assets		405,633			511,479			627,021
Construction Costs and Improvements		220,571			199,550			183,245
Disposition of Real Estate Assets		(590,271	)		(672,099	)		(403,651	)
Write-off of Fully Depreciated Assets		(21,676	)		(15,604	)		(29,212	)
Balance, End of Year	$	2,952,499		$	2,938,242		$	2,914,916

The changes in accumulated depreciation, including accumulated depreciation for real estate held for sale, for the three years ended December 31, 2007 are as follows:

	2007			2006			2005
Balance, Beginning of Year	$	410,962		$	357,228		$	323,493
Depreciation for Year		105,758			107,352			86,587
Disposition of Assets		(55,732	)		(38,014	)		(24,088	)
Write-off of Fully Depreciated Assets		(21,676	)		(15,604	)		(28,764	)
Balance, End of Year	$	439,312		$	410,962		$	357,228

S-20

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FIRST INDUSTRIAL, L.P.

By:  FIRST INDUSTRIAL REALTY TRUST, INC.
as general partner

By:  /s/  Michael W. Brennan

Michael W. Brennan

President, Chief Executive Officer and Director

(Principal Executive Officer)

Date: February 25, 2008

By:  /s/  Michael J. Havala

Michael J. Havala

Chief Financial Officer

(Principal Financial Officer)

Date: February 25, 2008

By:  /s/  Scott A. Musil

Scott A. Musil

Chief Accounting Officer

(Principal Accounting Officer)

Date: February 25, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  Jay H. Shidler Jay H. Shidler	Chairman of the Board of Directors	February 25, 2008
/s/  Michael W. Brennan Michael W. Brennan	President, Chief Executive Officer and Director	February 25, 2008
/s/  John Brenninkmeijer John Brenninkmeijer	Director	February 25, 2008
/s/  Michael G. Damone Michael G. Damone	Director of Strategic Planning and Director	February 25, 2008

S-21

Signature	Title	Date
/s/  Kevin W. Lynch Kevin W. Lynch	Director	February 25, 2008
/s/  Robert D. Newman Robert D. Newman	Director	February 20, 2008
/s/  John E. Rau John E. Rau	Director	February 25, 2008
/s/  Robert J. Slater Robert J. Slater	Director	February 25, 2008
/s/  W. Edwin Tyler W. Edwin Tyler	Director	February 25, 2008
/s/  J. Steven Wilson J. Steven Wilson	Director	February 25, 2008

S-22

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-142470) and on Form S-8 (File No. 333-100630) of First Industrial, LP. of our report dated February 25, 2008 relating to the consolidated financial statements, financial statement schedule and the effectiveness of internal control over financial reporting of First Industrial, L.P., our report dated February 25, 2008 relating to the combined financial statements of the Other Real Estate Partnerships, and our report dated May 16, 2006, except with respect to our opinion on the consolidated statement of operations insofar as it relates to the effects of discontinued operations discussed in Note 5, as to which the date is February 25, 2008, relating to the consolidated financial statements of FirstCal Industrial, LLC, which appear in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
Chicago, Illinois

February 25, 2008

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Michael W. Brennan, certify that:

1.	I have reviewed this annual report on Form 10-K of First Industrial, L.P.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2008

/s/ Michael W. Brennan  

Michael W. Brennan 

President and Chief Executive Officer
First Industrial Realty Trust, Inc. 

114

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

I, Michael J. Havala, certify that:

1.	I have reviewed this annual report on Form 10-K of First Industrial, L.P.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2008

/s/ Michael J. Havala  

Michael J. Havala 

Chief Financial Officer
First Industrial Realty Trust, Inc. 

EX-32

Exhibit 32

CERTIFICATION
Accompanying Form 10-K Report
of First Industrial, L.P.
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Chapter 63, Title 18 U.S.C. §1350(a) and (b))

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. §1350(a) and (b)), each of the undersigned hereby certifies, to his knowledge, that the Annual Report on Form 10-K for the period ended December 31, 2007 of First Industrial, L.P. (the “Company”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 25, 2008	/s/ Michael W. Brennan
	Michael W. Brennan
	Chief Executive Officer (Principal Executive Officer) First Industrial Realty Trust, Inc.

Dated: February 25, 2008	/s/ Michael J. Havala
	Michael J. Havala
	Chief Financial Officer (Principal Financial Officer) First Industrial Realty Trust, Inc.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The information contained in this written statement shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference to such filing.